[IP] Re: whether prices are excessive.

[David Farber <dave@farber.net>]

________________________________________
From: Tilghman Lesher [tilghman@mail.jeffandtilghman.com]
Sent: Tuesday, July 08, 2008 10:22 AM
To: David Farber
Subject: Re: [IP] whether prices are excessive.

Dave-

From my experience in the book industry, the dividing lines for textbooks
are completely out of line with the general book industry.  I worked for one
of the major booksellers in the country, and at least for us, most books were
obtained from the wholesaler at 50% off the retail cost.  This was not the
case for textbooks.  Textbooks were obtained from the wholesaler at only 10%
off the retail cost.  You'll see a ton of general books on the market
discounted at different rates, all under that 50% mark which constitutes the
profit margin for the bookseller, but textbooks are never discounted at all.

On Tuesday 08 July 2008 06:57:18 David Farber wrote:
> ________________________________________
> From: Mary Shaw [mary.shaw@gmail.com]
> Sent: Monday, July 07, 2008 10:06 PM
> To: Sunil Garg; David Farber
> Subject: Re: [IP] The real meaning of the Act of 'Civil Disobedience'
>
> Not that I take Wikipedia as definitive, but in the university model the
> professor can usually choose the textbook from among competing texts for
> the same course.
>
> The underlying question is whether prices are excessive.
>
> Here's a quick overview of where the price of a book goes. This is for
> regional guidebooks, which I understand pretty well.  I don't know how
> closely it corresponds to textbooks, but it's probably a good first cut.
>
> Divide the retail price of a book into six roughly equal segments -- 15-20%
> per segment. Two parts (40%) goes to the retailer for rent, salaries,
> stocking books, etc One part (15%) goes to the wholesaler for warehousing,
> distribution, etc One part goes to the publisher for editing, business risk
> (fronting the money), marketing One part goes to the printer for putting
> ink on paper and binding the volume One part goes to the author.
> For a $60 textbook, that's about $10/part.
>
> The retail markup seems to be in line with general retail practice. A
> low-visibility cost to the publisher is fronting the money to edit and
> print a text that doesn't compete well in the market. A few years ago I
> paid my printer $3-4/copy for 250-300 pages softbound, so $10-15 per copy
> for a large textbook doesn't seem out of line. For textbooks, author
> royalties used to go 10-15%, higher as volume goes up, so that's about
> right. As I noted earlier, it doesn't pay the author very much per hour.
>
> Note that the author does get a cut of the income.  This isn't like the
> music industry, where a common complaint is that the performer isn't
> getting any of the income.
>
> So which of these parts is exorbitantly expensive?
>
> As for frequently-changing editions, it's gratuitous to suggest that
> they're changed solely to force students to buy new books. Particularly in
> computer science, the material changes.  For some large freshman courses,
> university-specific editions are sometimes printed to keep the size and
> cost of the book down by including only the chapters required for the
> course.
>
> One way to get the cost of textbooks down would be to sidestep the
> retailer.  For example, a student could sign up at course registration time
> to get the books automatically, and a distributor could make up
> individualized text packages and ship them in bulk to a university
> dispensary. Given the lead time, it seems like this could take a third off
> the top of the price.
>
> Another possibility to explore would be sets of monographs rather than
> monolithic textbooks.  That, however, has integration problems of various
> kinds.
>
> Mary Shaw
>
>
> On Mon, Jul 7, 2008 at 8:47 PM, Sunil Garg
> <sunil@sunilgarg.com<mailto:sunil@sunilgarg.com>> wrote: According to
> Wikipedia, "Monopolies are thus characterized by a lack of economic
> competition for the good or service that they provide and a lack of viable
> substitute goods."
>
> For the vast majority of courses,
>
>  *   students are prescribed a particular textbook,
>  *   that book is published by a single publisher, and
>  *   frequently changing editions eliminate most of the pricing competition
> with used books
>
> ...thus characterizing a monopoly, even if a single company doesn't control
> the entire industry.
>
> -Sunil
>
>
> On Mon, Jul 7, 2008 at 5:24 PM, David Farber
> <dave@farber.net<mailto:dave@farber.net>> wrote:
>
> ________________________________________
> From: Mary Shaw [mary.shaw@gmail.com<mailto:mary.shaw@gmail.com>]
> Sent: Monday, July 07, 2008 7:42 PM
> To: David Farber
> Subject: Re: [IP] Chron of Higher Ed: Founder of Textbook-Download Site
> Says Offering Free Copyrighted Textbooks Is Act of 'Civil Disobedience'
>
> The undergraduate who is running this site clearly needs to study the basis
> for civil disobedience more carefully.  First, civil disobedience is not
> committed anonymously, but publicly and with full expectation of suffering
> the penalties.  Second, its purpose is to protest injustice, not prices.
>
> Also, though there has been concentration in the textbook industry over the
> last decade or so, I don't think it is yet a monopoly.
>
> Mary

--
Tilghman



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