You may have heard over the past few years that the price of textbooks for college continues to increase rapidly at the same time that digital printing and new classroom techniques should be bringing prices down. Despite protests, the handful of textbook publishers seems to have been able to retain its pricing power. They have cleverly forced through updates that kill the used book market, and are forcing add-ins like digital workbooks and problem-solving sets that go unused. But while the market atrophies and government sits on the sidelines, today's student is taking matters into her own hands - by embracing Internet piracy.
It's pretty clear that the textbook market is an inefficient one. First, there are few competitors in the market - each classroom must use a single edition, and the marketplace has consolidated. Second, schools and professors directly benefit from the high prices. At best, they don't feel students' pain, so fail to drive lower prices. Even worse, they make more money when prices go up and the used book market is quashed. Students have no choice other than quitting school or refusing to take a necessary class. Some push the pain off to parents or long-term loans - which further minimizes the true market impact.
Protests against rising textbook prices are gaining at schools across the country. An organization called Make Textbooks Affordable unites several state school student organizations to lobby congress and push the debate. But Alex Beam in the Boston Globe praises students that are doing to textbooks what kids did to the music industry with Napster years ago. He summarizes the benefit of this illegal challenge to textbook publishers:
"A young Northeastern University student named Shawn Fanning wrung billions of dollars of excess profits from the record companies when he invented Napster...But Steve Jobs found the right price point for music at iTunes. Between the pirates and the publishers, we'll find our way to the right price point for textbooks, too."
I am certainly not a fan of copyright violations and the act of taking money out of the mouths of those who create intellectual property. But at times when the market is not working efficiently, when it does not contain enough challenge to drive improvement, dramatic actions will occur. As in this case, the court of public opinion will get ahead of our legal system and politicians, and people will "take up arms" against repression.
Like the record industry, which is finally innovating and adjusting to listeners' anger over price increases, album formats and usage controls, the textbook industry had better improve the value equation for students quickly, or a surge in illegal sharing will upend its entire business model.