How to price yourself out of business

Let me start by saying, “I love books!” I love to read them. I maintain a large collection of them. I mark them up while I am studying them. I prefer learning by reading books to learning from audio presentations or a video. I am a “hands on” learner.

Oh – and I spent most of my career working in publishing. So I understand the cost structure to produce, market and publish a book.

So, this article from American Public Media on the price of college textbooks caught my eye – “Textbook costs getting hard to cover.”  

“One big and growing chunk of that tab is textbooks. The typical undergraduate book bill is $900 a year and growing. So today, a group of college professors went public with a call for low-priced and free texts online. Congress is trying to ease the book burden too.”

OK – what price isn’t rising these days? Tuition costs are skyrocketing so why shouldn’t textbooks prices do the same? Should congress get involved in this? No, no, no!

Who – or what – is to blame for this? Here is one former publishing executives explanation – blame the “used textbook” market:

“Erik Frank is a former executive at Prentice Hall, the nation’s biggest publisher in the $5.5 billion textbook market. He says prices started skyrocketing after the used book market moved to the Internet. College bookstores started scooping up books and redistributing them nationally.

Erik Frank: And so you started to see an increase in the supply of used books, so that starts to cut into publisher profits. And so what do publishers do? Well, as publicly traded companies needing to sustain a quarterly bottom line, they react defensively and they increase prices.

And publishers come out with ever more expensive new editions every two to three years to try to kill the used book market.”

Can you say “Napster?” Did book publishers fail to learn anything from the surge in “digital piracy” that continues to plague the recorded music industry? Obviously, the answer is “No.” The insular mind of the publisher says, “Unit sales are decreasing because students are purchasing used text books. So let’s make up the lost revenue by bring out a new, higher priced edition. That will show them who is the boss!”

Record music executives hid their collective heads in the sand rather than face up to the “digital piract” isse. They hoped that this threat would go away. Instead, sales of Audio CDs went away – for good!

There are many other factors that help to contribute to the rising costs of college textbooks:

  • multi-color pages printed on high gloss paper
  • Multimedia PowerPoint slides, etc.
  • Lecture notes, exam questions, etc.

Read the article for more background on the topic. It is also available as an MP3 file or as a Podcast. And that brings me to the point: It is valuable to include all of these “extra enhancements.” They help students to learn. But… why go to the (high) cost of publishing them with the book? Think about producing them to be accessible via the Internet.

Students demand information that they can access – when they want it and in the form that best matches their lifestyle. Pod-casts, download-able files and interactivity are just a few of the ways that publishers – and professors – can provide this information.

Why are so many “old media” executives stuck in the past? Why do they desperately struggle to maintain a broken business model? Why do they refuse to adapt to change?

Perhaps they admire the thought process of the U.S. Post Office. “Our revenue is decreasing because most customers are using e-mail. So, let’s raise the rate we charge to mail each letter to make up for this loss.”

Go figure!



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  1. Fascinating blog entry, Danny. I have three textbooks of my own on the market and I have developed online learning centers and CD-ROMS to go along with several textbooks published by McGraw-Hill. Sometimes the publishers go to great time and expense to publish digital assets only to have those assets ignored by the professors. Some faculty use digital assets but even those that do, also rely on printed texts for the core of their teaching because books are convenient and students never ask for tech support on how to use a book. All of this is changing and will change as more digitally literate faculty take over the larger classes. The irony is that I find textbooks to often be the most practical of tools when teaching web site development.



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