Re: Response to Janellyn Kleiner

["Joseph Esposito" <espositoj@gmail.com>]

Concede the field?  No.  But it is no longer a growth industry. 
The used book market (mostly in bricks and mortar, not online) is 
about a third of the business now.  This has put enormous 
pressure on the textbook publishers.  Note that this does not 
apply in equal measure to the publishers of books used in 
colleges that are not, strictly speaking, textbooks, such as 
paperback editions of classic literature;  Random House and 
Penguin are being troubled by used books somewhat, but nothing in 
comparison to the texts from Pearson and McGraw.

In order to compete in texts now, it is necessary to be huge; 
current estimates are that the top six textbook publishers 
comprise about 85% of the new book market.  (Most observers put 
the new textbook market at around $4.5 billion.  Google, in 
comparison, is all of 8 years old and has revenue of around $7 
billion.) The furor over textbook prices is a puzzler to me.  I 
doubt I am the only one who has heard a representative of an 
institution whose undergraduate tuition is just shy of $40,000 a 
year complain about the $800 average costs for books.

What you are likely to see is the publishing industry migrating 
to ebooks as a means to suppress the used book market.  So the 
new biology text that a student purchases for $120 new or $85 
used will morph into an ebook for $75.  This strategy is not 
likely to get much pick-up in other segments of the industry.

Joe Esposito

On 7/12/06, Margaret Landesman <margaret.landesman@utah.edu> wrote:
>
> Joe,
>
> Re. textbooks: "Its future is behind it." Please explain.
>
> It is my distinct impression that the big textbook publishers are
> dismayed about the very high percentage of dollars spent on their
> publications which goes into the now marvelously efficient
> peer-to-peer and other online used markets.  But I hadn't noticed
> any willingness to concede the field.  Not the electronic one
> anyway.
>
> Margaret Landesman
> Utah
>
> PS - NYT Monday July 3, p. C1 - "In Canada, the Torch is Passed
> on a Quiet but Profitable Legacy" - interesting story
>
> -----Original Message-----
> [mailto:owner-liblicense-l@lists.yale.edu] On Behalf Of Joseph J.
> Esposito
> Sent: Tuesday, July 11, 2006 7:05 PM
> To: liblicense-l@lists.yale.edu
> Subject: Response to Janellyn Kleiner
>
>>I'd just like some answers that may blow holes in my current
>>opinion that scholarly publishing is the most profitable venture
>>going in the world of publishing.
>
> JE:  Well, it all depends on what you mean by publishing.
> Scholarly monograph publishing mostly operates at a deficit.
> Many, probably, most research journals lose money.  College
> textbook publishing is still highly profitable, but its future is
> behind it.  School publishing is profitable for the big guys
> (only 4 left).  Trade publishing is unspeakable from a business
> point of view.  But you probably mean STM journals.  This is a
> highly profitable niche, but its success is relative to the
> otherwise truly dismal performance of other publishing segments.
> If you are looking for money, go into energy or real estate. Only
> a fool would invest in publishing nowadays.
>
> Joe Esposito