The Daily Pennsylvanian :: Truth about textbooks | Buying used may contribute to high costs

In a textbook industry strained by persistent debates over rising prices, many students' cure for high costs may also be a cause.

The used book market is booming, but publishers say it is draining their profits and driving up prices.

Cash-strapped students, who spend about $900 on books each year, want lower bills while publishers want to maintain profit in a changing marketplace - a tug-of-war that represents one of many challenges in an industry that is frustrating all stakeholders.

The used textbook market intensified in response to book prices that nearly tripled between 1986 and 2004, rising at twice the rate of inflation, according to a 2005 Government Accountability Office report that sparked national debate on the industry's trajectory and practices.

College publishing operations have expanded since the 1960s because higher student enrollment created a wider market, said Albert Greco, a Fordham University Graduate School of Business professor who studies publishing.

The 1980s and 1990s saw aggressive competition among companies for market share that resulted in price-inflating tactics, such as increasing sales representatives and bundling supplemental materials like CD-ROMs and practice tests, said Eric Frank, whose Internet start-up Flat World Knowledge offers free, open textbooks.

Over the past few decades, "the cost of textbooks crossed the line of what textbooks actually are," Frank said.

The Internet offered an outlet for strained students, jumpstarting the used book market by providing easier ways for students to buy and sell books. It also enabled growing trends in illegally downloading copies of books and buying them overseas at fractions of the U.S. cost.

Greco said a growing share of total textbook spending - about one of every three dollars - goes to used books. They take in $2 billion a year at college bookstores, plus $300 to $500 million online and an incalculable amount through peer-to-peer exchanges.

The market continues to intensify because increased student participation puts more used books in circulation, Greco added.

More Penn students are selling their books back to Penn Bookstore thanks to a 2004 expansion of used book operations and increased awareness of its buy-back program, Business Services spokeswoman Barbara Lea-Kruger said.

Penn Book Center co-owner Mark Row said his store also found success when it entered the used book trade last year.

And BetterThanTheBookstore.com, a used book marketplace started by two Penn students in 2005, found such positive response that it is expanding to Drexel and Temple this fall, co-founder Heather Gorn said.

Greco said it is hard to quantify the used book market's growth without concrete figures, but he estimates it expands by $50 to $100 million each year - "at least as fast" as the new book market, which is growing by 3.5 percent per year and pushing $5 billion in net revenue for 2008.

Those numbers are a threat to publishers and authors, who do not profit when books are resold. They must generate return on investments from fewer copies sold, which raises costs for students, said Stephen Hochheiser, spokesman for Cengage Learning, a major publisher.

The result is a "vicious cycle" that makes textbook production less financially appealing while increasing burdens on students, said Richard Hull, executive director of the Text and Academic Authors Association.

The used book market does face challenges - supplies of used copies are often limited and difficult to find - but while stakeholders search for long-term solutions, it is many students' most feasible option.

And as Greco noted when he found the $170 marketing textbook he teaches with for $34.95 online, "The savings are staggering."

Comments (7)

The prices in the bookstore for new AND used books are not competitive. The bookstore is run by Barnes & Noble. Barnes & Noble.com, however, sells NEW books on line for prices below what they charge in the bookstore for USED books. Moreover, for purchases of $50 or more there is no shipping cost. Books are typically delivered in 3 days. You also can get a 10% discount on these already lower on line prices if you are a Barnes & Noble Club member. Last week I ordered a new textbook on BN.com for $88 (before the BN Club discount.) The price of the book used in the bookstore was $106. I don't even remember price of the book new in the bookstore. The bookstore's sales will continue to decline as long as the price differential is significant. The only reason to purchase from the bookstore is instant gratification.

It seems like a vicious cycle leading to ever rising textbook prices. * Frequent changes of textbooks due to evolution of subject matter, changed emphasis, curriculum changes and competition for better pedagogy. * 1000s of professors for SAME subject at 1000s of colleges writing textbooks to survive (tenure) as much as to earn royalties. Just think if you study from 4 credits * 8 semester or 32 textbooks in 4 years, how many were written or co-authered by UPenn professors? 10%, 20% or more? * Publishers actively contract with professors to produce NEW books often multiple similar books on eg "Corporate Finance". It seems there is huge rush to have lots of choices for core subjects. While the top textbook may be used at 100s out of 2000 colleges, there may be 50 very similar books used only at 1-2 colleges only. * Similarly publishers/reps fiercely market 'free' evaluation texts to professors and 'control' them to require ALL students buy this particular textbook. * If they were reasonably priced, wouldn't students want to keep them instead of buying at $150 to sell at $50? As books get more expensive, more used books are sold, causing fewer books to be sold. * It is funny that while newspapers are going online/Web2, textbooks are getting more monopolistic. What can be done? (a) I think professors should not FORCE textbooks on students. (b) US Universities especially in state community colleges should follow the practice e.g. in IIT libraries, literally 10s of copies of textbooks (for 50 students in say Elect.Engg) would be kept in the library and the SAME books would be used year after year. Policies to allow 1 day access or reference only access reduced burden on students. (c) Professors should list the BEST books with clear concepts or advanced description. Often these are the books THEY use to create lectures and to frame tests from. However, due to either Lowest common denominator OR publisher pressure, these books are 'kept' from the students. Any comments or other suggestions?

Cengage publishing 1.4 Billion dollars in revenue. http://www.cengage.com/investor/pdf/Third%20Quarter%20Report%20-%20March%2031,%202008.pdf

Easter Illinois University in Illinois has textbook rental. The fee is a fixed amount per hour registered. It is a great deal for parents. If you need the book for future reference, you have time to purchase the book during the semester. I never asked if my daughter could buy the book that she rented. I expect the answer is "Yes."

Bullshit on the part of the publishers. A reduction in the demand for new textbooks due to the substitutability of used ones CANNOT in any way increase the cost of new textbooks. Publishers can raise prices all they want, and that'll just cause students to turn even more to used books. It's a simple leftward shift of the demand curve. The gig is up for publishers and this is a pathetic last ditch effort on their part.

[QUOTE id="054f7023-def9-4256-9d87-b05e870e7185"]Bullshit on the part of the publishers. A reduction in the demand for new textbooks due to the substitutability of used ones CANNOT in any way increase the cost of new textbooks. Publishers can raise prices all they want, and that'll just cause students to turn even more to used books. It's a simple leftward shift of the demand curve. The gig is up for publishers and this is a pathetic last ditch effort on their part.[/QUOTE] You are correct in a static environment. The publishers, however, are increasing the frequency of new additions in order to combat the use of used texts. This increases their costs so they in turn increase prices. Until Profs become cost conscious and really evaluate the benefits of the new addition on a cost/benefit basis the publishers will continue these practices.

The only people used textbooks are hurting is the publishers who have been gouging students for years. If they wish to stay profitable they need to streamline their operations, not raise their prices.

There are generally enough used textbooks to go around for every student that wants to save money. If most students can buy a $170 textbook for $35 online or at the bookstore, then used textbooks are NOT raising prices for students.

Rather than streamlining, publishers are coming up with more devious ways to force students to buy new like LYING to professors and telling them that custom books or "alternate format" books will save them money. When all it really does is make it difficult to find used so that ALL students will have to buy new each semester.

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