Affordable Content Models
Marguerite Stocker
by Marguerite Stocker, Monmouth University (bio)
Introduction
The mission statement of nearly every independent college bookstore includes a focus on students. Operating outside of the traditional, for-profit corporate structure allows these stores to take a customer-centered—in this case, student-centered— approach, whether through cost-competitive offerings or product availability. This chapter examines how the independent college bookstore can play a vital role in providing students affordable course material.
This chapter examines how the independent college bookstore can play a vital role in providing students affordable course material.
Until recently, college stores could be cost-competitive by selling old editions of textbooks, sourcing used books from wholesalers, and buying books back from students. But when publishers began revising editions more frequently, they eliminated the bookstore’s ability to leverage these cost-reducing work-arounds. According to the Bureau of Labor Statistics (2016), textbook prices rose more than three times the rate of inflation between January, 1977, and June, 2015—an increase of 1,041%. Publishers note many reasons for this increase (such as the rising cost of paper, royalties, and marketing costs), but none have resulted in improved content.
The Textbook Publishing Market Takes Shape
The textbook publishing market has experienced the same ebbs and flows as the overall publishing industry, notably those marked by mergers, acquisitions, and consolidations. The resulting market has become an oligopoly (Larivière, Haustein, & Mongeon, 2015), with a small number of companies controlling the supply and distribution of course materials.
Publishing houses started merging in the 1960s, with Random House’s purchase of Alfred A. Knopf in 1960 (Osnos, 2012). In 1975, Gulf+Western acquired Simon & Schuster (keeping the Simon & Schuster imprint), which, between 1984 and 1994, acquired more than 60 other publishing firms, including Prentice Hall and Macmillan (Simon & Schuster, 2018). With the addition of these educational, professional, and reference imprints, Simon & Schuster’s revenue grew from $200 million in 1983 to $830 million in 2017 (Publishers Weekly, 2018a).
As seen by looking at the five largest publishers, the mergers and acquisitions continuing into the 21st century have had significant impact on the publishing market:
- The largest publisher of course material, Simon & Schuster’s educational division (including Prentice Hall) was sold to Pearson PLC in 1998 (Pearson, 2018).
- McGraw Hill acquired Random House’s college division in 1998 for more than $200 million, and in the following year entered into a 50/50 joint venture with Macmillan, combining their elementary, secondary, and vocational education businesses. The company bought out Macmillan’s half for $161 million in 1993, and in the next year McGraw Hill’s three business segments (educational and professional publishing, financial services, and information and media services) brought in revenue of $2.8 billion (Bahsin, 2011). McGraw Hill acquired Tribune Education for $635 million in 2000, moving to challenge Pearson Education for the top spot in education publishing. In 2014, however, their revenue had fallen to $1.24 billion (Publishers Weekly, 2015).
- The third-largest publisher of educational material, Scholastic specializes in the K–12 market, and had a revenue of $1.74 billion in 2017 (Scholastic, 2017).
- Cengage, formerly Thomson Learning (owned by Wadsworth Publishing), was created from a restructuring of International Thomson Publishing. Thomson was sold for $7.75 billion in 2016 to a private equity consortium consisting of Apex Partners and OMERS Capital Partners, and the name was changed to Cengage Learning. Cengage subsequently acquired Houghton Mifflin College Division, National Geographic School Publishing, and Web Assign, among others. In 2017, Cengage’s revenue was $1.5 billion (Publishers Weekly, 2017).
- After selling its college division to Cengage in 2009, HM Harcourt restructured. In 2012, it purchased the reference and culinary portfolios of John Wiley & Sons, including Cliff Notes and Webster’s New World Dictionary. HMH had a 2017 revenue of $1.41 billion (Publishers Weekly 2018b).
New Textbook Marketing Strategies
The five publishers with a lock on the market (Quinn, 2014) are able to drive up prices—and ultimately, their profits— without fear of market competition. One of their primary strategies to undermine the used textbook market and increase prices is the frequent revision of existing textbooks. While the content of some subjects covered by traditional textbooks does change regularly, book updates—sometimes every two years—appear to outpace content updates. These new textbooks carry higher prices, and prevent students from leveraging the used textbook market. The California Public Interest Research Group (CALPIRG), which has taken on the publishing industry on behalf of students, claims that new editions for the most widely purchased textbooks on college campuses are published every three to four years and that they cost, on average, approximately 50 percent more than used copies of the previous edition (Zomar, 2007). According to CALPIRG, faculty have noted that new textbook editions are relevant and justified only half of the time (Fairchild, 2004). Publishers, however, continue to publish frequent updates, and no longer reprint older editions, forcing students to purchase the new material. After a short time, older editions become more difficult to find and bookstores are forced to buy the latest editions to satisfy demand.
The increase in textbook costs can also be attributed to “bundles”—textbooks offered along with supplementary materials and web-based tutorials. According to CALPIRG, the bundled version of a textbook can be more than twice the price of the stand-alone version (Fairchild, 2004). Publishers claim to have increased their investment in the development of supplementary material to meet the increased demands from instructors to enhance student learning (GAO, 2005). According to Exposing the Textbook Industry, however, just 50% of professors use all bundled components. One-third say that they could not assign a chosen book without the bundle or did not know if that option was available (Zomer, 2007).
The July 2005 GAO Report to Congressional Requestors found the following:
While publishers, retailers, and wholesalers all play a role in textbook pricing, the primary factor contributing to increases in the price of textbooks has been the increased investment publishers made in new products to enhance instruction and learning…. In particular, publishers point out the high cost associated with the development of technology applications that supplement traditional textbooks. The publishers have made these investments to meet changing needs of higher education, such as the increase in part-time faculty who require greater instructional support and supplements that will enhance student learning of the subject matter. While wholesalers, retailers and others do not question the quality of these materials, they have expressed concern that the publishers’ practice of packaging supplements with a textbook to sell as one unit limits the opportunity students have to purchase less expensive used books.
At Monmouth University, about 25% of courses adopt bundled material. Selectors do so with the expectation that individual faculty will use all parts of the bundle, but this is rarely the case. When surveyed during textbook buybacks on campus, student feedback indicates that less than 10% actually use all the components. This fact is most evident when students bring their components in still wrapped and unused.
Textbooks costs have risen at an incredible rate over the last 60 years, in part because of shorter revision cycles and the introduction of bundled textbooks.
Textbooks costs have risen at an incredible rate over the last 60 years, in part because of shorter revision cycles and the introduction of bundled textbooks. Understanding the publishing environment helps bookstore staff facilitate the best possible textbook options for students. It’s also important to know how course materials are chosen, so as to provide crucial information at key points in the process.
Faculty and the Textbook Selection Process
Book selection is the responsibility of professors, department chairs, or department committees. At Monmouth University, for example, texts are chosen by the department chair, and all faculty, including adjuncts, are required to use the chosen books.
Textbook selectors are often influenced by publisher representatives, who solicit virtually and in-person using new titles and new editions of existing textbooks. Representatives may highlight the latest in instructional support for the title, focus on the book’s supplementary material, or offer incentives, such as new computers for labs. Publishing representatives are less likely to promote textbooks based on affordability or cost-savings. According to Exposing the Textbook Industry, 77% of surveyed faculty said their sales representative did not provide price information. “Even when professors directly asked for the price during a sales meeting, only 38% reported that the sales representative would always disclose the price” (Zomer, 2007).
To best serve the campus community, it is important that independent college bookstores take on the responsibility of educating textbook selectors about affordability. Working with faculty on affordability issues, however, can be complex, as faculty opinions about the value of textbooks are highly varied. According to the 2016–2017 Faculty Watch Report of the National Association of College Stores (NACS), 25% of faculty surveyed do not require course material because it is “…not worth the expense to my students/materials are too expensive.” Faculty are also unsure what they can or should do to provide their students with more affordable textbook options, with 55% being unsure about the role they play in textbook To best serve the campus community, it is important that independent college bookstores take on the responsibility of educating textbook selectors about affordability.affordability, and more than 40% not viewing the issue as “a priority for their institution, themselves or the campus store” (NACS, 2017). At Monmouth University, student success and achievement are top institutional priorities. Meeting these priorities becomes a challenge when course materials are too expensive, causing unnecessary stress and often forcing students to take classes without the required material.
Finally, faculty often focus on content—quality, appropriateness for the level of the course, and so on—before considering the cost of the material. As noted by the GAO in its June 2013 Report to Congressional Committees:
“Faculty told us they typically prioritize selecting the most appropriate materials for their courses over pricing and format considerations. One faculty group explained that the quality and relevance of the material are the key factors in finding the best match for the course. Another group said they need to determine whether the material is at a level suitable for the students likely to enroll and comprehensive enough for the content they plan to cover. Only after they have identified the most appropriate course materials will faculty consider pricing and format options.”
A representative of a national campus retailer noted that faculty ask about cost-saving options like digital formats and textbook rentals only after identifying the materials that best help students master the necessary concepts. Bookstore staff, and others working with faculty on affordability issues, can use these surveys to better understand faculty behavior, and to design approaches to book selection that raise affordability issues earlier in the selection process.
The Bookstore Role in Affordability
To ensure that decisions are made in students’ best interests, it is imperative that independent college bookstores take part in conversations between publisher representatives and faculty. As noted by NACS, bookstores can function as academic resource centers, working with faculty to research course material options that satisfy instructor requirements while also reducing costs to students (NACS, 2018).
One way in which stores can provide faculty with cost-conscience solutions is to use third-party software. Verba, for example, provides affordability rankings that are based on publisher list price, the availability of used copies in the campus store, the availability of new and used copies in the marketplace, price, and rental percentages in the campus store and in the general marketplace. Faculty can be sure they are making the best choice for their students (Crook, 2017), and bookstores can review faculty choices and make alternate suggestions for low-scoring materials.
Bookstores can also review their own pricing schematics to determine the flexibility of their margins within the parameters of contributing back to their institutions and meeting budgets. Not being part of a larger cooperation, which sets standard margins, allows independent bookstores to be more flexible on a book-by-book basis. The margin measures the relationship between inventory cost and the price charged to customers. If a book costs the store $200, for example, the store may set its margin at 25%, resulting in a retail price of $250. For a book costing the store $20, the margin may be set at 28%, for a retail price of $25.60. This flexibility helps keep the higher-priced books from being astronomically expensive. When a bookstore takes the time to review the price of a newly adopted book, it can use strategic pricing to stay competitive in the marketplace and, at the same time, be cost-conscious for the student-consumor.
Independent college bookstores can help lower the costs of course materials by effectively communicating with faculty, partnering with third-party vendors to provide more transparency in pricing along with alternate forms of course material, and changing their margins based on the extended retail of a text.
Independent stores can also take advantage of marketplace partnerships. In mid-2016, for example, Nebraska Book Company, a company providing wholesale textbook distribution services to approximately 2,500 stores, partnered with Red Shelf, a distributor of digital learning materials, to offer integrated digital content to independent college stores through online ordering and point-of-sale systems. By partnering with more than 500 educational bookstores, Red Shelf can offer content at prices 60% lower than those of the printed text. Red Shelf has also partnered with many publishers to offer Inclusive Access (IA) material, also at a discounted rate. This digital material is made available on the first day of class to every student in a course; students are charged through direct student account invoicing or through the bookstore itself.
Independent college bookstores can help lower the costs of course materials by effectively communicating with faculty, partnering with third-party vendors to provide more transparency in pricing along with alternate forms of course material, and changing their margins based on the extended retail of a text. Bookstores can also work toward lower textbooks prices by forming new campus relationships.
Building Campus Relationships
Bookstores can leverage many opportunities to help lower the price of course materials. With each independent store able to reflect the image and culture of its campus, staff can, for instance, create bonds and build loyalty by involving students in the purchasing process. Soliciting—and paying attention to—student feedback can help a store become a more trusted partner in course material consideration. And each store can determine the threshold of pricing for its own institution, and modify its margins accordingly.
To ensure that lines of communication are open to all portions of the campus community, each independent bookstore can create an ad-hoc committee with representatives from the faculty, IT department, library, and student body. This committee can identify lower-cost alternatives such as custom books, books including only class-specific chapters, open source material, inclusive access materials, and new library lending options.
Because independent college bookstores have the flexibility to be active listeners, they can facilitate positive student engagement. A campus store might, for example, offer a meeting space within the store, where staff can meet regularly with student councils to discuss problems and generate ideas. This provides students more one-on-one interaction with store staff, builds relationships, and increases the commitment to buy locally. If students trust that the store is acting in their best interests, they are more inclined to support it, and to encourage support from their peers as well—ultimately benefiting both the institution and its students by keeping revenue in-house and tuition costs stable.
Independent college stores have the flexibility to change and/or extend their hours of operation to reflect student events and activities. When competing with online vendors, it’s crucial to have both an accessible brick-and-mortar store and a robust website, and to provide short turnaround time in order fulfillment along with easy delivery (with orders brought to dorm rooms, for example, or placed in locker units similar to those used by Amazon). With this flexible approach, bookstores can build more loyalty and better serve their students.
Additional Strategies
Independent stores need to stay on top of current trends in K–12 course materials, cloud computing, mobile learning, bring-your-own-device policies, and open content. Knowing, for example, about the materials that have been used by incoming students can help bookstore staff gauge student expectations and their attitudes toward course purchases.
When independent bookstores take advantage of their autonomy, they can employ approaches which reflect campus concerns, local economics, and current competitive trends. One such example is a store’s return policy. Independent stores can be flexible with policies which helps students deflect unnecessary charges if they purchase the wrong material. When independent bookstores take advantage of their autonomy, they can employ approaches which reflect campus concerns, local economics, and current competitive trends.Bookstores can also lower the cost of course materials by developing custom books in-house, securing copyright information, and using on-campus printing facilities.
Independent college stores should also rely on organizations created to support them, such as Indico and the Independent College Bookstore Association, both of which offer resources including benchmarking material, webinars, listservs, conferences, and one-on-one marketing and purchasing help.
Conclusion
Flexibility. Intuitiveness. Strategic response. Support. Collegiality. With an approach including these elements, the independent college bookstore can ensure the affordability of course materials despite consolidation in the textbook publishing market and the subsequent increase in textbook costs. Taking the time to communicate with faculty, students, publishers, third-party vendors, and peers, bookstores can fulfill their missions—serving students responsibly and offering the most cost-effective course materials available.
References
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Author Bio:
Marguerite Stocker has worked in the collegiate textbook industry for nineteen years. Seventeen of those years was at Brookdale Community College in Lincroft, New Jersey and most recently at Monmouth University in Long Branch, NJ.