REINVENTING THE TEXTBOOK INDUSTRY

If ever an industry were deserving of digital destruction, it would be the $10 billion textbook market. A handful of companies sell almost all primary, secondary, and higher-education textbooks. At the college and university level, where 19 million students spent $4.5 billion in 2010 on texts they virtually had to buy, many schools own bookstores and get a cut of the sales.
The rationale for pricing can be opaque: Paul Krugman’s economics textbook is $166 at Barnes & Noble (BKS) in the U.S., less than half that at Blackwell’s in the U.K. The federal government helps to underwrite annual textbook price increases by baking their cost into financial-aid calculations. No wonder textbook prices rose 186 percent in the U.S. from 1986 to 2004. That’s slightly more than 6 percent a year, vs. an overall inflation rate of 3 percent.
Enter Apple (AAPL), the Great Disruptor, which recently announced with great fanfare that its iBooks 2 and iBooks Author software would “reinvent” textbooks by offering richer, interactive texts at a more affordable price. More importantly, new software tools will democratize textbook creation by allowing users to easily combine video, music, and text, and to create new course materials.
We don’t yet know Apple’s plans for entering the college textbook market, much less its potential pricing framework. The K-12 textbooks Apple is offering through partnerships with big producers such as Pearson (PSON:LN), McGraw-Hill (MHP), and Houghton Mifflin Harcourt Publishing seem like a multimedia bargain at $14.99.
But that price doesn’t really offer big savings to strapped school systems: It covers just one student for one course year, not the three to five years that you would get out of a $65 ink-and-paper version. For college students to save money buying digital textbooks, the pricing would have to reflect both the fractional cost of the device they would need to buy and the money they can get back by selling the textbook to another student—something they can’t do with e-textbooks.
Apple seems less intent on disrupting the textbook cartel than on joining it. Its iBooks 2 format is truly functional only on Apple machines. Anyone who wants to sell a textbook made with Author must go through Apple and give it a 30 percent cut. The proprietary restrictions Apple has put in place add another wrinkle: Your tax dollars fatten Apple’s bottom line. In 2008, almost half of all full-time, full-year undergraduates got some kind of federal aid, roughly $100 billion. If a professor wants to assign a text accessible only on $500 iPads—well, you get the point.
There’s one straightforward way to help students realize the full cost benefits of digital texts. The Education Dept. could require that digital texts at institutions receiving federal financing be platform-neutral, readable on any device a student chooses. Another promising approach would be to push the spread of Open Educational Resources: texts and curriculum materials that will be accessible to all, free, under a Creative Commons license. The state of Utah just announced that it will develop and support open textbooks for the study of secondary languages, arts, science, and mathematics; earlier pilot programs provided the state’s high school science students with texts at $5 a book, compared with an average cost of $80 for a typical text. Education, after all, begins with open books.
THE GOP’S BEST HOPE ON IMMIGRATION
In a Republican primary notable for its bleak attacks, one event offered a ray of hope. Speaking to a Hispanic group in Miami, Florida Senator Marco Rubio took a tentative step toward reclaiming his party’s pro-immigrant legacy.
Harsh anti-immigrant rhetoric has been a mainstay of this year’s Republican campaign, with Mitt Romney and Newt Gingrich proposing immigration policies that variously combine punitive fantasy (Romney’s mass “self-deportation”) with Rube Goldberg governance (Gingrich’s jerry-rigged “citizens’ review” panels to determine which illegal grandparents get to stay and which get the boot).
It’s worth recalling that in 2006 a Republican-controlled Senate supported immigration reform that included a path to citizenship for millions of illegal immigrants. Although that bill failed to pass the Republican House, Republican President George W. Bush supported it, saying the U.S. could be “a lawful society and a welcoming society at the same time.”
Rubio’s positions on illegal immigrants have largely echoed party orthodoxy, but he deviated from the script when he said the U.S. must “figure out a way to accommodate” young illegal immigrants who “want to serve in the military or are high academic achievers.” What Rubio was referring to, however obliquely, was the Dream Act, legislation that would provide a path to citizenship for illegal immigrants who attend college or volunteer for the armed forces. Republicans have largely refused to back such legislation in Congress. The party’s Presidential candidates have denounced it.
Rubio’s link to the moderate immigration policies of Bush and Republicans past is significant—if the senator wants it to be. Rubio has endorsed no one for President, but Romney and Gingrich are both quick to praise him. With their party facing a lopsided electoral disadvantage among Hispanic voters, Republicans need Rubio, a son of Cuban immigrants, more than he needs them.
Illegal immigration is not an easy issue. The prospect of comprehensive reform, encompassing a viable guest-worker program, a path to citizenship for illegal residents, expanded access to visas, and a new regime to hold employers accountable, has never seemed more distant. If anyone can single-handedly alter that calculus, it’s Rubio. A public endorsement of the Dream Act would be a good place for him to start.

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