Publishers Fight Back Against Schoolbook Piracy
In his final years, Apple founder Steve Jobs set his sights on the "digital destruction" of the $10 billion textbook market, promising to do for course materials what iTunes had done for music. With the high price of textbooks, Jobs knew students were ripe for the picking.
His ideal customer might have been Cameron Brown, an affable college junior studying to become a physical education teacher. Equipped with an iPad, smart phone, MP3 player, and laptop, the 24-year-old is already a practiced pirate.
"Textbooks are way too expensive," he says, huddled among friends in front of Brooklyn's St. Francis College. Everyone nods in agreement. "But if you're willing to put in the effort, you can find free PDFs of books posted online. I know it's illegal, but times are hard."
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Textbook piracy is on the rise, spurred by the expense of course materials and the popularity of computer tablets and e-readers. Some in the publishing industry have likened the proliferation of book-sharing sites to the launch of Napster a decade ago. But learning from the missteps of the music industry, textbook publishers have been quick to embrace the new technology.
Academic publishing remains lucrative, generating more revenue than consumer trade presses. The world's largest publisher, Pearson, owns such high-profile assets as Penguin books and the Financial Times, but education accounts for 80 percent of its operating profit. In the U.S., prices for new college textbooks have increased 8.5 percent over the past year, five times the overall rate of inflation. The National Association of College Stores puts the average price of a new textbook at $62 and the average student's total book tab at an annual $655; last year, a typical student at a public university shelled out nearly twice that for textbooks and related supplies, says the College Board.
Yet the textbook business is already facing Internet-era challenges. Publishers have lost market share to online used-book vendors, including powerful wholesalers like Amazon and Barnes & Noble. Many resellers rent textbooks, too. Free search engines, such as eBay's half.com, can now locate the cheapest editions from vendors around the globe. As a result, students now spend about 7 percent less on printed textbooks than in 2009, according to NACS.
Then there are the pirates. Publishers claim online piracy contributes to higher prices by undercutting profitability and re-directing their resources to monitoring and enforcement. But you won't find many people shedding tears on campuses. Even professors routinely distribute copyrighted materials without permission, assisted by online course-management systems like Blackboard and university document services, which will copy (and sometimes bind) selections. Teachers claim fair use protection because they're not using a substantial amount of each book, but in 2008, the Association of American Publishers sued Georgia State University for "systematically" enabling the practice. Ultimately, publishers didn't get a lot of sympathy in court, either. A judge rejected the publishers' demands last May as "burdensome and expensive"—and, in a sharp rebuke, ruled they should pay the school's legal fees. (The publishers have appealed.)
Until recently, the industry's war on piracy has been focused on shutting down the numerous websites devoted to the illegal trading of textbooks. No one went after the users of BitTorrent, the peer-to-peer file-sharing software employed by sites like the Pirate Bay to offer free copies of everything from movies and music to games and software.
That changed last year, when John Wiley and Sons, one of the largest textbook publishers, began to sue dozens of BitTorrent users in New York, charging them with illegally sharing copies of books from Wiley's popular "For Dummies" series. (Defendants were identified via their IP addresses.) This summer, a judge ordered one defendant to pay $7,000 for sharing a copy of WordPress All-in-One for Dummies.
Ernesto van der Sar, editor of the news site torrentfreak.com, wonders what took publishers so long to go after BitTorrent users, when film companies alone have sued more than 200,000 people in the U.S. since 2010 for sharing copyrighted works online.
"They probably didn't realize it was a problem for them until recently," van der Sar says. "It's very easy to share books. A PDF is a few megabytes—people can even e-mail it. I'm not totally convinced [Wiley] wants to take it so far. [File sharing] will be hard to stop. They probably want to set a few examples and hope not many people start these textbook-oriented sites."
When it comes to textbooks, pirates like to swashbuckle, flying the flag of Robin Hood to bring free content to the masses in attacking what they see as monopolistic profiteers in cahoots with universities.
One of the largest of these sites, Library Pirate, boasted 1,700 textbooks, searchable by subject. It even encouraged students to pool their resources to send gift certificates for e-book rentals to the site, which would then strip the rented copies of their publisher's security codes. To avoid capture, Library Pirate set up shop in the Ukraine and later moved to Montenegro. "Our mission is simple," read a statement on the site. "To revolutionize the digital e-textbook industry and change it permanently."
Library Pirate shut down a couple of months ago, notes van der Sar. "Publishers are protective of their content, so they send a lot of take-down messages, and hosting companies respond. It's hard to keep a site online if you don't know what you're doing."
Although some pirates talk a good game, most are simply in it for the money, says Andi Sporkin, spokesperson for the Association of American Publishers. "There are people who truly believe that all information should be free, but these sites are not being created out of goodwill and faith in humanity. They are created as profit centers." Sporkin says that one of the biggest book-downloading sites, library.nu, which was hosted in the Ukraine but registered on the Pacific coral island of Niue, brought in annual advertising revenues of around $11 million.
Van der Sar is skeptical about that revenue estimate. He says large file-hosting sites can make a lot of money, "even in the tens of millions of dollars," but they also offer a full menu of media, including pirated copies of movies, music, and TV shows. The dedicated book sites are much smaller. "They certainly don't make millions off ads—they can pay the server bill, and one or two people can live from it," he says. "There are many sites without any ads at all—they just want to make the content available. Some have been set up by students who are tired of paying for textbooks with new editions each year."
A Voice Web search easily located illegal textbook-sharing sites of all sizes, as well as sites that lead users to pirated books posted elsewhere. "The publishing industry can get these big sites down, but then there are hundreds of others," van der Sar says. "They might not be as big, but it's very hard, if not impossible, to get content offline."
Van der Sar is a psychologist in the Netherlands, and one of his study areas is behavioral: "Why are so many people sharing when they know it's not legal?" Last month, Portugal decided not to prosecute 2,000 users of file-sharing sites, he notes, because their use was personal, not commercial.
"In the U.S., millions of people are file sharing, and I don't think many are hesitating because they know they can get in trouble," says van der Sar. "They still download because the Internet seems so anonymous. It is not, of course. But pedestrians walk against the light all the time because they know they can get away with it."
With such widespread disregard for the law, publishers have had to consider responses beyond litigation. The Association of American Publishers recently launched a Solutions for Student Success website and PR campaign to convince students that textbook prices, especially those for e-books, are actually cheap when compared to what they spend on movies, gasoline, and mobile phones. Industry insiders now advocate a more forward-thinking approach—harnessing the power of technology and the Internet to alter products. Yet some student advocates and used-book sellers fear the publishers are trying to strengthen their hold on the market.
Back in 2007, seven major publishers helped develop coursesmart.com, which offers rentals of e-textbooks at up to a 60 percent discount off the list price. Critics say prices are still too high: CourseSmart rents the widely used Biology, Eighth Edition (Pearson) for $83.99, which it compares favorably to a regular list price of $215.80, but access to the book expires after 360 days (many e-rentals last for just 180 days). A used printed copy, meanwhile, can be found for as little as $20.22 on the search engine campusbooks.com.
Students also complain about the constant release of new editions, saying publishers only update books to keep prices high and make used copies obsolete. The Association of American Publishers says new editions typically come out every four years, but even that seems absurd to Jeff Cohen, CEO of CampusBooks—"as if calculus has changed a lot in the last 20 years." Still, Cohen says, professors are afraid to buck the trend: "Nobody wants an out-of-date textbook." In 2008, Congress required publishers to show schools what substantive changes have been made to new editions and to provide the copyright dates of three previous editions. It also mandated the unbundling of supplemental materials from textbooks, so these pieces could be purchased (or not) separately.
Publishers have responded to these challenges by offering various methods to lower costs: selling separate chapters from textbooks, printing black-and-white versions, working with individual professors to put together customized textbooks for specific courses, and developing dedicated e-learning materials that promise not only lower costs but higher academic success rates as well. Sophisticated digital products can even alter quiz questions depending on student answers, in effect acting as electronic tutors.
But textbooks are chosen by faculty, not administrators, and many balk at the high-tech products in the name of the academic freedom to teach how they want. In time, however, pressures to lower costs and increase class sizes could leave instructors "absolutely no option but to go to technology," says Bruce Hildebrand, executive director for higher education at the Association of American Publishers.
"All these people are arguing over the price of printed textbooks, but the industry is heading in a different direction," Hildebrand says. "The whole thrust in this sector is to go digital."
E-books account for just 6 percent of all textbook sales, but that's double the figure from a year ago. Book distributor MBS Direct expects digital products to claim half the market by 2020. U.S. Education Secretary Arne Duncan is a big believer, predicting printed textbooks will soon be "obsolete."
Publishers are rooting for the change. Digital course materials are easier to update than printed textbooks, and the proprietary interactive technology will make these versions more difficult to pirate or resell. Traditionally, new textbooks are sold to only about half the students in a class. Under the new model, every student will pay for an access code.
No pirate can change that, says Hildebrand. "It's just where the world is going."
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