November 24, 2005

O'Reilly Textbooks

To help me figure out what kind of job I am looking for and how I should go about getting a job at those places, I made a list of all the companies that I regularly use at least one of their products. After a while, I took a break to do some homework and reluctantly drew out my textbook and class notes. It hit me, right then and there, that one of the products I spend the most on every year is textbooks! I then knew my mission of the day, discover all that I could on why textbooks (the books assigned by educational instructors) were taking all of my money.

Throughout my research I focused on the set of textbooks I knew the most about, Computer Science and Information Technology. Traditionally I have not been very satisfied with my textbook offering in computer classes due to the book's outrageous price per amount of useful information it contains. Its no doubt, difficult to write any type of book let alone one that is supposed to fill the big three qualifications: Easy to learn on your own with, easy to instruct with and makes a good reference. When I came to this realization I took a moment to think about how this could be accomplished. O'Reilly, the famed information technology book publisher, has accomplished these goals by keeping the books separate. The cookbooks are separate from the quick reference guides which are separate from the "Learning..." series. This no doubt gives the consumer greater choice on what they are after, and certainly gives O'Reilly a chance to pad their bottom line. But by separating this information into different books O'Reilly has limited their potential take advantage of the textbook market. And, as a result, of all of the O'Reilly books I have purchased, none have been for a college course.

O'Reilly has, recently, come to the rescue however. They have interested their new service (still in beta) Safari U. Safari U aims to be the academia arm of O'Reilly, but through different means than simply just textbook publication. This new system, is used by both professors and students. Professors, are able to use selections from books on the Safari Bookshelf (the online copies of books from a variety of publishers) to construct the textbook for their class. The professor can also add their own information, like word, powerpoint, or pdf files into the book to supplement the material. The price of the book is determined by the amount of pages in it (Each page is $0.16, so a 200 page book is $32).

Another Safari U feature is that, for a subscription fee, students can utilize an online syllabus and course information that the professor has created. The syllabus is created initially through the chapters in the book, but the professor can customize that with his or her own information. Finally, the most collaborative feature of Safari U is the Learning Objective Center. O'Reilly's hypothesis is that since many courses are very similar between universities, instructors should be able to share their course information, such as custom book ideas or presentation slides, with other instructors to create better textbooks and help educate students.

I digress, despite O'Reilly's new system textbooks currently still suck and as evident in the United States Government Accountability Office report on College Textbooks, the price of textbooks has risen 186% as opposed to 72% of overall price inflation. The GAO report attributes this to publishers adding electronic enhancements to the textbook such as CD-ROMS, course websites and teaching tools such as presentation slides. While publishers claim these aid student learning and help instructors teach, distribution centers (such as university bookstores) have reported that these items just make the books tougher to sell because of the higher cost and difficulty in selling them used. Most students aim to get their books purchased used because they are traditionally priced at 75% of the new book price, as opposed to 125% of a new copy (regular retail price + 25% markup by the bookstore). A bookstore charging a market to make a profit is nothing new, but since textbooks are regularly priced higher than most other books, the price quickly gets out of control.

Lets look at an example from one Ben Bernanke, President Bush's nominee for Federal Reserve chairman and one time Princeton Professor. His co-authored book Principles of Economics is $100.75 for the hardcover, $116.56 for the DVD edition, and $40.75 for the study guide. I would regard those prices as typical of college textbooks (my economics textbook for this semester was $104.95 new. However, at the same retailer, Benanke's 392 page Inflation Targeting: Lessons from the International Experience is $37.95. Now, surely Mr. Bernanke would be the first to point out that the demand for his textbook is significantly higher than that of his book on Inflation Targeting (which I imagine requires a fair amount of knowledge and interest in economics just to get through). The problem with this statement is not that the demand isn't higher for the textbook (it is) but that students are forced into purchasing this book because it is assigned by the instructor. When an instructor selects a book, the student is normally not given a choice between several books, but between the same book new or used. Since the used books are kept in short supply, most students are not able to take advantage of that cost savings and are required to purchase the book new.

One of the other large complaints against publishers has been the frequency at which new editions are being published. Textbooks are updated on average about once every 3 years, but booksellers have noticed recently that textbooks are being updated more frequently. As the GAO report states, one of the things driving up costs is the introduction of new technology such as CD-ROMS, teach aids or companion websites. Its common practice for many publishers to push out new editions of their textbooks with an attached disk or website key. However, when the instructor tells the student that they need to have the latest edition, they may or may not know that the previous edition includes all of the same material except that it lacks the CD. In some programs, such as mathematics or some sciences, a book updated that frequently is not needed. It just causes students to pay more money, when in fact the information in the book did not need updated at all (In my statistics class, I used a book from the 1970s!). While in the information technology field it may be important to keep books up to date, I'm not sure i requires a new release of the book. A simple web page listing some important changes and some augmented material would do fine for most part (there really hasn't been that much need to change the beginning C programming books, has their?). Finally, when books are updated, it is much more difficult for students to sell back books, if book sellers are informed that a new edition is coming out soon.

The internet has helped students out a lot, as it gives students the means to trade used books. While sites like EBay and Amazon Marketplace give places for students to trade books, the vast quantity of retailers on the internet give students another option of where to purchase their books. Most schools only have one or two bookstores around campus, so the fiercely competitive ecommerce sites offer students a much needed option. This past semester I ordered a book over Amazon Marketplace and it came from the same city that I go to school in (I got it significantly cheeper than the new book price and their were no used copies available at the bookstore).

So, I started with the quest to find out why my books were so expensive which was explained well the GAO report, learned about the new O'Reilly offering, and got to offer some of my complaints about the textbook publishing industry, I guess I could have been a little less verbose about it. Did it help me figure out where I want a job, I dunno. I am graduating in April, so I guess I really need to update my resume.

Posted by gasiorek at November 24, 2005 06:43 PM | TrackBack
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