Amazon’s plan plan to tackle student textbooks has met with plenty of skepticism. Is tackling college students a successful strategy? I did some digging back in my old files to see whether or not the Kindle would have made sense when I was in college not so long ago. I kept fairly good records of how much money I spent each semester in college. Here’s what I spent in one year:
$378.83 total spent on textbooks, $187.05 recouped (49%)
Total cost: $191.78
$322.64 spent on textbooks, $130.68 recouped (40.5%)
Total cost: $191.96
While each semester’s textbooks typically would run $600–800 in list price, price-sensitive students buy as much as they can on the secondary market of used books. I made extensive use of the used books market, so I was usually able to obtain most of my textbooks at a substantially lower price. Afterward, I was able to recoup about half the costs by selling them back. I would have made more, but we had nasty little things called bulkpacks which had little or no resale value. They were photocopied articles prepared by the campus print shop which had royalties burned into the price. Each 5-page Harvard Business School case study would run you ~$12, and the next semester the pack would arbitrarily change and thus become unsellable. For textbooks, publishers would also would republish the same book but shuffle page numbers and chapters around in the latest edition so the numbers wouldn’t match.
Students would get around textbook prices in a variety of ways:
- Buying used copies of the latest edition on Amazon, Half.com, school classifieds, university bookstore
- Buying international editions on the cheap (printed on cheap paper, but usually 50% off)
- Photocopying bulkpacks
- Purchasing out of date versions of textbooks and matching up the page numbers of chapters
- Sharing the same textbook with a friend
Students making negative $40k per year are extremely price sensitive and every penny counts. Small costs are typically more significant. An example of this is a book on my records that I bought for $4.95 and sold for $4.75 later on — today the effort to list, sell and ship a book for five bucks probably wouldn’t be worth it anymore. It all comes back to prices — students have virtually unlimited time, and with my eight bucks an hour work study job I would rather spend my hard-earned cash on Starbucks rather than a new textbook that I’m only using for a few months.
Even on the low end estimating books to be $600 each semester at full price, I was able to pay only 1/3rd of this by the time the semester was over and I had sold back all my books. In order for the Kindle to be create value for college students, Amazon can’t simply make DRM textbooks cheaper by 20–30% and then sit back and rest on their laurels. To really make an impact with digital distribution, it’s not merely a matter of cost but also enabling a secondary market for textbooks to be sold, shared and traded. That said, I could see some this play out poorly for students if publishers were able to create exclusive DRM distribution deals with college campuses, and make the decision moot by making the audience even more captive than it already is.
Alternatively, I’m personally most excited for a subscription service to emerge through the Kindle, enabling a Netflix for books or ways for colleges to bundle the cost of textbooks into tuition in exchange for free and open access to textbook content. We already have this model in place for accessing big databases/services like EBSco, Factiva, Forrester, etc so why not textbooks?