The DOJ E-Book Suit May Speed E-Books to the Classroom

Comment | Print | RSS

• Login to Rate

Had those textbooks been available in electronic format, I would have gladly paid the full printed price to get them.

Everyone in the tablet and e-book market is looking at textbooks. From industry executives to publishers and from parents to educators, everyone is aware that textbooks are the next big market for e-books.

Despite the fact that e-readers are not suitable for education, the potential advantages of delivering textbooks in electronic format makes everyone anxious to explore the possibilities and cash of this lucrative market.

But the recent DOJ suit against Apple and some publishers for fixing the price of e-books might deter more textbook publishers from converting their titles to electronic format.

In many countries, especially in Europe, prices for textbooks in mandatory education are regulated within a price bracket for every subject, and retailers can only discount them to a maximum percentage. Many shops stock certain textbooks with the hope to sell them at full price and make a profit.

Also in Europe, predatory pricing is forbidden, and prosecuted. No one can sell below purchase price except in extraordinary circumstances or going-out-of-business sales. But that is not the case in the US, where Amazon is famous for slashing prices of e-books to convert the market to e-books and promote their Kindle devices.

The big e-book retailers such as Amazon, B&N, and Apple are expecting textbooks to be their next big source of revenue, the new panacea of the e-book market. But the possibility of destroying their current business model and margins in the hands of Amazon and other e-retailers scares textbook publishers.

If Apple and the publishers named by the DOJ settle the lawsuit with the government –- and everyone agrees that they should -- then the gates are open for Amazon and other discount online stores to price e-books as low as they want. And based on the previous experience of the New York publishers with Amazon, textbook publishers fear that the online giants will try to destroy the printed market of textbooks as well. This is raising the alarm in the industry for the same reasons.

If Amazon starts slashing prices of e-textbooks, then peoples' perception of the textbook price will change forever. No one will pay a premium price for the printed version.

Independent bookstores will be hurt most. Many bookstores rely on textbooks as their main source of revenue in the back-to-school season. If they lose that revenue, many will go out of business.

Textbook publishers are looking at the e-book market with envy and hate. They would be happy with the “agency model” Apple pioneered with the e-book publishers, but if the DOJ wins the case then that model is over.

On the other hand, consumers are happy. Parents can see their textbook expenses (sometimes several thousand dollars) being reduced to Amazon levels. Teachers are puzzled! A few years ago they didn’t want Internet in the classrooms, now they can’t live without it. But e-books are a radical change in the way they conduct classes and they will resist that for the moment.

There is no doubt in the industry that e-textbooks will finally make it to the classroom. The question is when and how.