[Irtalk] The Changing Textbook Industry | Entrepreneur the Arts
hilton.gibson at gmail.com
Tue Jan 21 13:02:06 SAST 2014
According to the Bureau of Labor Statistics, the price of textbooks has
risen more than 800% over the past 30 years, a rate faster than medical
services (575%), new home prices (325%), and the consumer price index
(250%). The average college student spends more than $900 a year on
textbooks. Not surprisingly, textbook publishers have been highly
profitable. In 2012, McGraw-Hill’s profit margin was 25%; Wiley’s was 15%;
and Pearson’s was 10%. Moreover, the profit margin of firms in the
publishing sector increased on average by 2.5% between 2003 and 2012.
The Internet, however, has begun to disrupt this market. First, the
Internet has facilitated the purchase and rental of used textbooks.
Although publishers have long had to compete with the sale of used
textbooks at on-campus bookstores, online platforms such as Amazon and
Half.com (owned by eBay) enable the selling of books between students at
different institutions. This is particularly helpful when one institution
has adopted a new edition of a textbook, while another institution is still
using an older edition.
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