No one except for authors, publishers, and booksellers believes that college textbooks are reasonably priced. I have been involved with a number of projects over the years to reduce the cost of textbooks, most of which focused on open educational resources (OER), which may be the topic of a future post. The more promising approach, however, may be what is being termed “inclusive access,” a terrible phrase because it brings in a whiff of a political agenda for what is essentially a matter of business. In inclusive access, publishers work directly with institutions to come up with discounted digital versions of core texts. The institutions then license the books on behalf of the students, sometimes collecting money from the students, sometimes not. We are going to be seeing more of this, though the ultimate form of the model is not yet clear. But happen it will, as there are too many incentives for it to fail to move forward.
So how does this work? In the traditional model — which has been a phenomenally effective contributor to the development of a highly educated population — authors, usually college instructors, write books for specialized publishers that focus on the college sector. The publishers field a sales force, which may be quite large (providing a rationale for industry consolidation, as scale is a big factor in college publishing); that sales force heads out to campuses around the country, calling on instructors in their offices. New texts are talked up; samples (print and digital) are provided. The instructor then decides which book or books to use and tells students to go out to buy them. The students go to their local campus bookstore or look to other venues (Amazon is perhaps 15% of the textbook market), including sources of used books and, yes, pirate sites. Some students do without textbooks entirely. Note that for authors and publishers, used and pirated books, and of course the absence of any book at all, provides no income. Bookstores, however, may profit from the sale of used books.
I have previously explained on the Kitchen why college textbooks are so expensive. To sum up that argument: textbooks are expensive because the person mandating their use (the instructor) is not the same person who has to pay for them (the student). Instructors want their students to have the best books, the most comprehensive books, the ones with the best supplemental resources; they also want books that make their lives as teachers easy. These things naturally drive up the costs, even when students use only a small part of the total package. If instructors had to pay for the books themselves, it would reshape the entire industry.
Inclusive access is a reshaping tool, though of a different kind. In such an arrangement, institutions make certain commitments, and publishers respond with heavily discounted pricing. One form this takes is for the university to license a publishers’ texts and then make them available to the students; the students pay for access through a fee. The commitments the university makes are critical; they can include a willingness to work with digital copies (with paid print-on-demand as an option) and a license that covers every student in the class (eliminating the used book and piracy markets). If these deals are well-negotiated by the publishers, the income to the publishers with this model could exceed that from the traditional model, even as the price to the students is a mere fraction of what a traditional print volume purchased at the college bookstore would cost.
How can this be? Let’s assume an instructor requires that students use a specific book on organic chemistry. At the college bookstore the students discover that the print version costs $200. But that sum does not go back to the publisher; the publisher is likely to receive something in the area of $120 as the bookseller exacts a margin of approximately 40%. In inclusive access, on the other hand, the $80 markup that the bookstore took goes away, with no loss to the publisher.
Other costs then begin to drop out. The cost of printing disappears for digital editions (a big number for hefty college textbooks), as does the cost of print desk copies. Returns, where bookstores send back unsold copies to publishers, are an artifact of print; with inclusive access there are no returns and hence no returns cost. Nor is there a cost for warehousing and shipping.
But the biggest gain is in the number of copies licensed. Let’s say our hypothetical class has 30 students. The publishers would love to sell copies to all 30 students, but about one-third will buy used books and approximately 8 more will get pirated copies or do without entirely. So the publisher may only sell 12 copies to a class of 30 kids. With inclusive access, on the other hand, institutions commit to purchasing licenses for the entire class, so the publisher gets 30 sales from 30 prospects. That means that the revenue per copy can drop without cutting into publishers’ profits.
There are winners and losers with inclusive access. The biggest losers are bookstores, which are cut out of the supply chain. Other losers are anyone who traditionally touched a print book, including truckers and warehouse personnel. The winners are students (lower prices) and publishers, which have eliminated the used book and pirate market in one swoop, even as all the costs of managing print have evaporated.
If inclusive access is such a great idea, why don’t we just snap our fingers and make it happen? Unsurprisingly, there are some forces and issues that have to be taken into account:
Booksellers. Many college bookstores are operated by commercial third parties, which sign contracts with the university administration granting the bookstore the exclusive right to sell books on campus. An inclusive access program may be regarded as a competing bookstore and hence a violation of that contract. Before we accuse the bookstore owners of greed, let’s remind ourselves that if we operated that bookstore, we would have demanded the very same exclusive rights.
Universities. The on-campus bookstore typically pays a percentage of its income to the university as part of the rent. Inclusive access would cut into the bookstore’s revenues, and thus lower the university’s income. Note the conflict the university is in: on one hand it wants to lower student costs (or claim to), on the other it wants to profit from students. This gets at a fundamental distraction in the “cheap textbook” movement: the real cost to students is outrageously high tuition, but it’s easier to target publishers than to reduce bloated university overhead.
The state government. For public institutions the sale of textbooks may be a significant source of sales tax revenue. Inclusive access would do away with that sales tax, since most universities are not-for-profit and pay no sales taxes. So here we have another conflict: the state wants to help students even as it profits from them.
The affordances of digital editions. This is not a matter of anyone’s economic interests but rather an issue that applies to many academic and professional books. With inclusive access all the books (except for students who exercise the expensive print-on-demand option) are digital, but college textbooks typically have complex page formatting, which makes for an unsatisfactory reading and studying situation when the books are moved to digital media. This is unfortunate; I would have thought that we would have had multiple display and formatting options by now, but it appears that Amazon’s virtual monopoly on ebooks has put a damper on competition and innovation. Most core college textbooks today are sold in print, and there is a reason for that. Is it a good idea to force students into digital editions when we haven’t figured out how best to display text, table, charts, and graphs?
Academic freedom. As I have talked with people working with OER and inclusive access, I have not been made comfortable with their view of the place of academic freedom, which in this case means the right of instructors to choose the texts for a class. An OER advocate once said to me that “calculus is calculus.” Oh, is it really? If a university has arrangements with three publishers for deeply discounted calculus texts, but an instructor wants to use a fourth, should that be permitted? (I would say yes.) But even if it is permitted, how will the instructor who adopts a $175 calculus textbook feel about having $40 digital textbooks available from the inclusive access service? Does that not put pressure on the instructor? Could inclusive access initiate a race to the bottom? I hope not, but I wish more advocates of inexpensive textbooks would take a stand to support the faculty.
Despite these obstacles, inclusive access is likely to make great strides in the coming years. And after we have lowered the cost of textbooks, perhaps we can move on to other aspects of the high cost of higher education.