Tensions between college booksellers and publishers about textbook prices reached new highs last week in an unusual venue, the New York Times.
In a front-page October 21 Times story about how more and more students have discovered they can buy textbooks online abroad for much less than in the U.S., Laura Nakoneczny, spokesperson for the National Association of College Stores, was quoted as saying, "We think it's frightening, and it's wrong, that the same American textbooks our stores buy here for $100 can be shipped in from some other country for $50. It represents price-gouging of the American public generally and college students in particular."
In an October 23 letter in response to the article, AAP president and CEO Pat Schroeder seemed to blame stores for high prices, saying that students pay a textbook price set by the bookseller "that includes a 'mark-up' that may well exceed the 25% to 30% acknowledged by bookstores." She also said that "one way to deal with rising bookstore prices and avoid student dismay over the sale of discounted editions in overseas markets would be to give students the option of purchasing their textbooks directly from the publishers online."
College booksellers, who usually take the brunt of student outrage about text prices and do not relish competing with publishers for student purchases, reacted with dismay.
NACS sent its own letter to the Times last week in which the association said the average store margin on textbooks is 22%. The letter also claims that since 1998 the price of textbooks to retailers have risen 35.1% while the Producer Price Index has risen 5.4%. NACS concluded by noting that "the issue of overseas textbooks is not about college bookstores. Regardless of where students buy textbooks in the U.S., even when purchased directly from publishers online, the prices are higher than those found overseas."
Suzy Staubach of the UConn Co-op, Storrs, Conn., said, "I always thought of ourselves as publishers' partners, not as competitors." She noted that while college stores set prices for texts, most of which are sold on a net basis to stores, the stores' usual margin is "not that high. Most people actually mark up 20%, not 25%— 30%."
Max Roberts, president of Barnes & Noble College Bookstores, said, "Someone needs to raise the flag over the unconscionable price increases leveled on the student marketplace for the last 20 years." Claiming that the prices of college textbooks have risen much faster than most other products, Roberts added, "The obvious conclusion is that publishers have wielded their monopoly power and have created an unfair burden on college students everywhere."
For its part, AAP members agreed that after publishers "were called price gougers on the front page of the New York Times, a response was needed," spokesperson Judy Platt told PW. She noted that college texts are very expensive to produce and that selling textbooks overseas helps to lower the costs for books both at home and abroad. Publishers have also argued that they often price texts lower abroad to take into account markets with weak economies and piracy problems. Platt said that prices for all kinds of products vary in the U.S. and in international markets, adding that if American publishers didn't sell texts overseas legitimately, "the piracy problem would be worse than it is."
The price of textbooks is not a new issue, but Platt believes that the issue has gained a higher profile because of the higher overall cost of college.
Platt said publishers are still interested in working with college bookstores "to get textbooks into the hands of students as efficiently as possible." Despite Schroeder's suggestion that publishers sell texts directly to students, she said "there certainly is a place for retailers" in selling books to students. But if publishers and retailers are to work together, she added, "the discussion needs to be civil."
In a conference call with analysts about McGraw-Hill's third-quarter results, company chairman Terry McGraw said the Times article "took an issue out of context of the totality of the value proposition that you are trying to provide to students." In defending the different prices, he said, "We have no problem in terms of being able to price to local markets." He said there are a number of ways to meet the market demand in different countries and that price is one of them.
The issue of text sales abroad has been simmering for some time. Late last year, NACS sent letters to eight publishers, suggesting, among other things, that the policy of selling the same text at price differentials here and abroad when publishers know or should know some of them will be sold in the U.S. might violate the Robinson-Patman Act and urging that publishers take steps to stop the sales of overseas editions of their texts in the U.S. The publishers' response came in the form of a letter from Schroeder saying that members couldn't address specific factual allegations, but that the association did not believe there were any Robinson-Patman Act violations.
