The Global Text Project looks interesting — primarily grad-student written. It’s not clear how it’s a sustainable model for textbook revision (an important consideration), and the editorial process isn’t clear from the website, but I certainly wish them well!

If textbooks were made available in non-resellable eBook format, they could be sold much cheaper–with much higher total profit because not only wouldn’t there be used sales, there also wouldn’t be the need to spend all of the costs involved in creating the unnecessary “updated” editions.

Students might complain about not being able to resell their textbooks, but the total cost to students could easily be lower.

One problem–colleges are not exactly hotbeds of respect for copyright. Making textbooks non-resellable would be tough. While I’m not a fan of DRM in general, I really don’t think there’s an alternative in the college textbook market. (Sure advertiser-supported texts might work for a few intro classes that generate huge volumes, but realistically that’s about it).

I don’t publish textbooks so I don’t have an iron in this fire, but I figured I’d share my thoughts.

Rob Preece
Publisher, http://www.BooksForABuck.com

Remove the printing costs, marketing costs, freight, and admin costs from the dollar, -81.3 cents.

An unrealistic figure I agree – but the difference now is huge, plus the author’s royalty is 11.7% and not the inflated 15%.

The trick here is not the dollar break down, as books are not sold in one dollar sections, but the per item cost. Here in Australia text books sell for around the $45 dollar mark (a guess, the average would be higher) and now think in terms of capital investment. $14.62 is the cost of printing. Plucking another figure from the air, let us assume 50,000 copies being a print run – $731,250.

Before any marketing, royalty payment and already some administrative costs (if we including editing, layout, and plates) three quarters of a million dollars must be spent.

Obviously for any of this to work every volume must be sold. The profit for for this spending is $51,187.50, easily dissolved by underselling the stock – of the 50,000 the non selling of between 3500-4000 books, let us say a miscalculation of 10% just about wipes out profits altogether (trusting the figures and using rough and ready calculations) and possibly starts to bite into capital funds.

But as this is all per dollar, assuming every cost is assessed on a per item basis and before the books are sold, $775,000 has been spent on marketing! Insurance against underselling.

Putting the per book costs, marketing distributing, freight together with printing – means to bring out a book (sans the retail cut and royalties) The capital risks go up and up – capital spent before a book is sold (50,000 print run) is $2,950,000 – nearly three million dollars risked to provide about $50,000 (rounded) profits if everything goes all right.

Now look at it from a different perspective – the price required to render about $50,000 profit, the $263,250 royalties that this generates (rounded to $250,000 and hence absorbing creation costs etc), for 50,000 items. Instead of $45 the ebook would be sold before retail at just $6.29.

There is no dead stock, no need for a sales force therefore, after the first thousand sold most of the costs would be covered. Capital risk is now calculated in a few thousand dollars. Add to this a 30% retail cut and the buying price sits around $8.71.
Now that is the challenge of the new technology, though none of figures should be used for anything but a rough and ready guide.

I would pose the question in purely capitalistic terms. Does anyone in their right mind risk nearly $3,000,000 to gain $50,000 when they could invest $3,000 and gain the same $50,000?

Of course nothing is that simple, ebook readers would have to already in use, but here is an interesting scenario.

Let us assume some really big textbook publisher, who does not produce 50,000 textbooks, but ten time as many – ½ million books, and does not produce a single book but 50 different texts. Using the same figures. Now add in one other element some perfectly usable eink device, purchased in a 500,000 lot, maybe a few years down the track and costing just $50 per item.
Instead of the student spending $45 per book, they spend $60 for the eink device, then pay for each etextbook at just $10 each, assuming only four are needed $100 spent for the student (lots and lots of rounding). Four textbooks cost $180 that doesn’t change much (it is something of a constant), but eink readers are not a constant, their price will fall, big orders could make them plummet – all very speculative, but not I think unreasonable speculations.

I doubt any textbook publisher would make the plunge, but never mind that. My figures are excessively shaky, but that hardly matters, they are only meant to emphasize the magnitude of capital risk involved and that in the final instance determines all.

The switch will come from paper to “e”, when is a hanging question, but why is clear – because the capital involved in “e” production is almost negligible, the risks of it being eaten away by lack of sales lessened likewise. Let us look at simplified percentages and let them sink in for a while (I am not proposing this division).

Publisher’s profit 30%
Retail Profit 30%
Author’s Royalties 30%
Publisher’s cost 10% (massively inflated, but never mind)
500,000 items sold at just $1.

Author, retailer sector, publisher each get $150,000.

And that is spending a massive $50,000 to produce an ebook, and make it available on a site. Silly figures really, but maybe worth a little contemplation.