Tarzan Economics: It’s a jungle out there…

There have been an increasing number of posts recently about the availability (or lack of) textbooks in Kindle or similar e-book format. Here’s a post that appeared this week on the Amazon customer forum:

I emailed Pearson, one of the largest publisher of textbooks in the world, asking why most of their books were not yet available for the kindle; this was their response:

David, thanks for your inquiry about whether we offer eBooks. As a matter of fact, Pearson was one of the early leaders among publishers to offer our textbooks in digital format, beginning in 2004. Today we have more than 1,000 titles available through Course Smart (www.coursesmart.com), which is online site where all of the leading publishers are offering their digital textbooks for sale. Students can save up to 50 percent off the price of the hardback edition of the textbook, and, as you note, there’s no heavy book to haul around, nor do you need to worry about selling it back at the end of the term. The ebooks have all of the content of the hardcover edition, with the same pagination, but allow you the ability to search the text using key words, highlight passages and make notes electronically. All you need is web access. Be sure to check out the site and see how it works.

Regarding the Kindle, some of our professional and technology books are available this way, but most textbooks are not, as the Kindle does not support text that is heavy with illustrations, which many textbooks are. But we’re monitoring developments closely.

David Hakensen
Pearson Education
Corporate Communications

A visit to the Coursesmart site confirms that indeed there is a wide selection of titles available for download to a PC. What the corporate spinmeister omitted from his response to the inquiry is that in spite of coughing up roughly half the cost of a new hardcover edition, you don’t actually own the book. It operates more like a subscription, and your right to use it expires in six months. That’s right, it evaporates, kind of like the morning dew under a warm sun. And if you hoped to stretch your textbook budget a little further by sharing your e-book with a classmate, forget it. That’s a violation of the Terms of Use. Also, better make sure it’s the right book for you, because you can’t get a refund of your subscription fee after two weeks, or if you’ve viewed more than 20% of the pages (See Terms of Service).

But if you’re a textbook publisher, you probably think you’ve found the Holy Grail. No printing, warehousing or shipping costs, no worries about second-hand texts putting downward pressure on your monopolistic prices, and you still get half of the MSRP! It’s “innovative” thinking like this that makes me think that it was the publishing industry that originally coined the term “DRM”, but that it’s really code for “Dated, Regressive Manipulation”. Their collective response to the challenge posed by the digital age has been to use the technology to protect their margins at all costs.

Don Tapscott puts it well in his book “Wikinomics”:

Publishers can’t reasonably adopt open approaches that would cannibalize existing revenues without a viable means to shore up their ailing income streams. Jim Griffin, the managing director of One House LLC calls it “Tarzan economics”. “We cling to the vine that holds us off the jungle floor, and we can’t let go of the one until we’ve got the next vine firmly in our hand”. The problem is that media incumbents are moving too slowly. They’re getting mired in the thick underbrush of thorny contractual agreements and outdated and costly infrastructures. The economic model is based on a business model suited for the era of analog publishing, not for a world of user-driven creation and distribution.

For an example of thinking outside the digital fortress built by the textbook publishers, have a look at the following post:

FlatWorld Knowledge – the publisher I’ve been waiting for?

David Wiley is part of a startup called FlatWorld Knowledge. Their aim is to release digital textbooks free of charge, with students paying for the print copy if they want. What is more interesting though is the way they take the notion of the text book and make it more of a social object. So the educator can edit the book for their class, the student can interact with other students around it, and people can sell related services and content. In fact, when you view their little cartoons it makes you realise just how limited the traditional text book model is in education. Why didn’t we do this years ago?

http://nogoodreason.typepad.co.uk/no_good_reason/2008/04/flatworld-knowl.html

The Tarzans of the publishing industry may cling to any vine that keeps them aloft, but in their quest for the next branch to grab onto, they are ignoring the three forces that are completely altering the landscape they’ve existed in for centuries: Open-Source, Creative Commons Licensing, and, most importantly, Free. (Chris Anderson: Free: Why $0.00 is the Future Of Business, Wired, March 2008) (http://www.wired.com/techbiz/it/magazine/16-03/ff_free)

Simply compare the state of a couple of other industries in the pre- and post-digital world: Kodak is a shell of the company it once was when film was the dominant photographic medium. And look at what happened to the telephone companies when long distance rates declined from a dollar a minute to zero. There will be the inevitable protectionist efforts, through vigorous enforcement of copyright law, and vain attempts to protect their content, but the outcome will be the same: new entrants, (like Flatworld Knowledge) unburdened by legacy cost structures, generating sustainable revenue from content that is free or close to it.

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