Apple tries to break textbook monopoly with cheap e-books

[Panzersharkcat]

From Bloomberg

When students in my online course in intermediate microeconomic theory head for the bookstores they will feel the pain of the marketplace.

The required text for the course, Jeffrey Perloff’s sixth edition of “Microeconomics,” will lighten their wallets by a hefty $206.67 retail. Or $147.52 from Amazon. The book is a 20- chapter behemoth that tips the scales at over three pounds, more than the weight of two iPads. The best deal for the students is to buy a used copy in a local bookstore and resell it at the end of the course. That option will end up costing a student about $50 -- one-fourth of the publisher’s suggested retail price. It’s the choice of about 75 percent of my students.

Why didn’t most of the students choose the electronic version of the text? When publishers began producing e-texts they sold them for about one-half the suggested retail price of a new paper version. But students have shown a stiff resistance to buying them, mostly because they are 65-plus percent more expensive ($82.99 versus about $50 for the Perloff book) than the used paper option.

Current e-texts are also a markedly inferior product. They are static PDF knockoffs of vertically oriented print pages. That means they don’t display well on most computer screens, and they resist printing an easy-to-read copy by inexplicably downsizing the fonts for home printing.

Put this together with the 180-day licensing period and it’s no surprise that fewer than 15 percent of students choose e-texts. (About half the students in my intermediate microeconomics course are or will become economics majors. The material in the text needs to be available for reference in future courses in the major, and possibly in graduate school.)
Digital Delays

So far the mainstream publishing companies have shown an inability or unwillingness to produce electronic versions of K- 12 or university-level textbooks that break the link with a corresponding print mode. That might be an understandable concession to navigating the book in a classroom for students operating with different versions, but it has had the important side effect of retarding the production of stand-alone texts that would exist only in digital form, and with no paper counterpart whatsoever.

E-texts that started as a way to kill, or at least maim, the market in used paper texts actually retarded the development of new digital texts with innovative features such as audio, video and animated content under the control of the reader. Over the past five years I have sat in my office many times with publishers’ sales reps who completely understood that their clay-footed bosses were wedded to the mentality of print.

It is not an uncommon story in economics to find industries with monopoly or oligopoly power using that power to slow or prevent innovation. In most cases the innovation is only delayed.

Students and parents who are outraged by the high prices of textbooks should be cheering monopoly-breaking innovations in this hidebound market.

Last week Apple introduced new software and marketing platforms that should, within a few years, totally reshape the old ways of producing and distributing learning content. The software is called iBooks Author, and the marketing plan consists of an iBooks Store to sell e-texts for the iPad and a new version of iTunes U for delivering content directly to students.
Inefficient Navigation

I have created a large body of content for my students on my own, but viewing videos and other media in traditional course management systems means following internal links that open videos in separate windows, interrupting the smooth flow of logic and making efficient navigation impossible. We see the possible alternatives to this every time we see an iPod commercial or view news content on an iPad. We know that current paper and electronic texts are static. All of this is about to change.

Consider first the software part of Apple’s (AAPL) package, because this is where a revolution would probably take place. What is lacking in traditional e-texts is the seamless integration of text and other media -- both video and audio -- and the flow and manipulation of content that the iPad and its imitators provide. But that’s only part of it. The old iPad apps, as well as the newsreaders we saw in the commercials, depended on a staff of professionals who produce the digital copy that consumers eventually download.

The revolution is that ordinary users -- on the order of folks who can create a PowerPoint slide deck -- can now produce copy that will run on the iPad. This is revolutionary. It will unleash the creative powers of thousands of authors and artists, to say nothing of us mere mortals. Just as important, it will spawn imitators. Expect to see a Google (GOOG) app that will allow users to create content for Android devices.

IBooks Author allows the creation of smoothly flowing iPad “pages” of content in a mashup of text, videos, illustrations and animations that can be manipulated by the students to suit their learning needs. The software is free to everyone. Teachers can use it to produce their own content for students, customized to course objectives, but allowing the pedagogy to exploit the free-flowing navigation of an iPad. In a demonstration at Apple’s news conference, we saw that an author could drag and drop an existing Word file into iBooks Author for distribution on the iPad.

These new texts -- a term that undervalues their potential importance -- can be the basis for a new art form. The crime novel of the future will include not only text but also videos and interactive illustrations. With iBooks Author, Apple is hoping to do what TechSmith and Camtasia Studio did for the production of videos for instruction: Put easy-to-use but powerful creative tools in the hands of ordinary people.

Camtasia Studio, by putting the tools for video creation and editing in to the hands of anyone with a computer, is now the world leader in screen-capture software. We’ll see if Apple can do the same for digital books.
Potential Barriers

What are the barriers to the best-case scenario playing out for Apple? Foremost, of course, is that the plan for schools and colleges would require a near universal ownership of iPads. Colleges have achieved universal computer ownership for students, but in most cases there is no requirement for a specific brand.

Why would the major publishing companies agree to collaborate with Apple? Why would they consent to a maximum price per copy of $14.99 for K-12 texts and give Apple 30 percent of the gross? I suspect that when Apple came to them they knew the jig was up.

On the bright side, textbook authors not affiliated with the mainstream publishing companies may see the remaining 70 percent payout from publishing in the iBook Store as a handsome payoff. It is true that the publishing companies can provide marketing advantages in textbook markets, but these should be valued conservatively. A principal benefit from the iBook Store is that it is a very efficient way for prospective buyers to scan the offerings of not just one publisher, but of many.

What I would like to see is a vast increase in the quantity and diversity of instructional content in all fields. The traditional publishing companies will be hard pressed in such an open-content world to maintain their current pricing models, and they will also be forced to compete with innovative authors who now will have drastically reduced entry barriers into the market for learning materials. Easy entry into a market sounds the death knell of monopoly, as any student of intermediate microeconomics can tell you.

(Byron W. Brown is a professor of economics at Michigan State University. His position includes university-wide duties helping faculty use instructional technology effectively. The opinions expressed here are his own.)

I'm a bit iffy as to whether this belongs here or N&P.

[Ryan Thunder]

Foremost, of course, is that the plan for schools and colleges would require a near universal ownership of iPads.

Oh, god, not more of this shit.

[Thanas]

No way do I want more apples in my uni.

[Panzersharkcat]

Here's hoping for imitators of this to spawn because I care little for Apple products.

[xthetenth]

An iPad would be cheap compared to what I've spent on textbooks over four years. I'd just want the choice of something I'd actually want on its own merits when I'm done. I don't see much reason why a PC couldn't display such content, and one of those isn't an unnecessary intrusion into my usage model.

Fun fact: my iPhone tried to autocorrect pc.
Other fun fact: my next phone will not be an apple.

[Terralthra]

This article doesn't mention the absolutely fucked-up EULA of iBooks Author. A PC can't display these etexts because Apple has no intention of letting PCs display them:

Apple’s iBooks Author EULA Claims Publishing Rights to Any Works Written with It

Hiding dirty little gotchas inside of long, legalese agreements is nothing new. Companies have been doing it for ages. They’re starting to push the envelope more and more, however. Sony has used license agreements to prevent users from taking part in a class-action lawsuit (They’re being sued now). Not bad enough? Now it seems like Apple’s EULA for its iBooks Author publishing platform actually calls dibs on exclusive publishing rights to what you write with it, like if Photoshop laid claim to images you created with it. Needless to say, this severely affects your ability to sell your own work.

Basically, Apple says that anything created with the software, a “Work,” is subject to a few rules. First off, if you want to give it away for free, that’s fine, go ahead. If you want to sell it though, you have to sell it through Apple. What’s more, you very well may have to enter into an additional written agreement before you can start selling. What’s more, Apple reserves the right not to distribute your Work at all, for any — or no — reason, meaning that if you wrote something with iBooks Author and Apple doesn’t want to sell it, you’re out of luck. Also, when you agree to the EULA, you’re agreeing to accept “lost business opportunities or lost profits” as a result of use. Yeah.

Now before you get too worked up, there’s something here that bears emphasis. Apple is not claiming any right to your words, they’re claiming right to the Work. If you rewrite those words elsewhere, they’re still yours. If you export the Work, it’s theirs. This means that you can take your book elsewhere if you just export the plain text, but at the cost of formatting, which could be a lot of work on a whole book. Still, better than nothing. And iBooks Author doesn’t even seem to publish in the industry standard .epub format anyways, so there’d be issues with taking your exported work elsewhere.

As far as I can tell, this is the first instance of an EULA restricting the output of a program. Granted, EULA’s will tell you that you can’t use a program to make a certain kind of thing, but they never tell you what you can and can’t do with the things you’ve made. Fortunately, all this has come out before most anyone would have a chance to write any books, and things will probably be a little clearer if and when Apple gets involved in the conversation. For now, if you want to be absolutely sure you can do whatever you want with the words you write, stick with your usual platforms.

The offending language from the EULA:

B. Distribution of your Work. As a condition of this License and provided you are in compliance with its terms, your Work may be distributed as follows:
(i) if your Work is provided for free (at no charge), you may distribute the Work by any available means;
(ii) if your Work is provided for a fee (including as part of any subscription-based product or service), you may only distribute the Work through Apple and such distribution is subject to the following limitations and conditions: (a) you will be required to enter into a separate written agreement with Apple (or an Apple affiliate or subsidiary) before any commercial distribution of your Work may take place; and (b) Apple may determine for any reason and in its sole discretion not to select your Work for distribution.
Apple will not be responsible for any costs, expenses, damages, losses (including without limitation lost business opportunities or lost profits) or other liabilities you may incur as a result of your use of this Apple Software, including without limitation the fact that your Work may not be selected for distribution by Apple.

[weemadando]

I thought the big story there would be "who wants to put all the time and effort into generating an eTextbook when you don't even maintain ownership of it?" rather than "it no work on PC!"

I'm sure calibre will format swap it just fine after a few updates.

[Terralthra]

I thought the big story there would be "who wants to put all the time and effort into generating an eTextbook when you don't even maintain ownership of it?" rather than "it no work on PC!"

I'm sure calibre will format swap it just fine after a few updates.

Both of those are valid complaints about the EULA, but on your Calibre point. If Apple protects the iBooks with DRM, creating or using a software program to format swap it and bypass the DRM is a violation of the DMCA.

[Stark]

That's why calibre doesn't support breaking DRM... just third-party plugins that do.

The idea of Thanas stalking a campus, enraged by all the technology in the hands of students, is fucking hilarious. PUT THAT TABLET DOWN THIS INSTANT! DETENTION FOR YOU!

[Skgoa]

A couple of nitpicks: 1) Despite Apple's marketing department, this is nothing special. So now they offer authorship tools for their eBook store... Amazon did that and now has a de facto monopoly on self-published books. *yawn* 2) iTunesU is the best eLearning repository/distribution channel I have seen thus far. I don't know what I would do without a Mac. If someone would compete with Apple in this market, all that whining about people being forced to buy Macs could finally end.

[aieeegrunt]

I've got an engineering degree (Bachelor Applied Science) from a Canadian University. An iPad + ebooks instead of regular textbooks would have paid for itself within a single semester. Some semesters I was spending more on textbooks than I was on tuition if you can believe that shit (granted this was the early 90's). Provided that the format was useable and not some horrible PDF scan I would have taken that deal in a heartbeat

[TronPaul]

This sounds exactly like Apple: Find a monopoly, replace it with their own. I have no love for Apple's walled garden approach. I would love having a cheaper alternative to textbooks if I could use them on any device or operating system I want to. I prefer to use Windows and Linux, will these iBooks support those systems? With Apple at the helm, that's a long shot. Plus the textbook makers and the professors who collect royalties love the high prices of textbooks. Are they in a position to be strong armed by Apple?

I was worried about buying textbooks when I started college, but I've found places where I can rent for much cheaper than even buying the books used. Then there's the fact that I can borrow textbooks from friends and professors require books they never use in the course. This strongly reminds me of the stupid iClickers that we need to have in certain classes because they're more "sustainable" and cheaper than paper. For who, the school? I had to pay $40 dollars to buy one for one class. How much more sustainable are they than recycling paper anyway?

[Molyneux]

If Apple protects the iBooks with DRM, creating or using a software program to format swap it and bypass the DRM is a violation of the DMCA.

Yet another reason why whoever voted for the DMCA should be lit on fire.
How the fuck does the federal government think it has the authority to regulate the writing of legitimate software?

[Questor]

No way do I want more apples in my uni.

That's the only place they're going. This model is 100% incompatible with public education.

Exactly how many private school students does Apple think there are?

[Questor]

How much more sustainable are they than recycling paper anyway?

Scantrons are stupidly expensive. When I was last taking classes, they were $.50 a sheet, and you had to buy ten at a time.

One professor I had used them every class meeting, too.

[TronPaul]

How much more sustainable are they than recycling paper anyway?

Scantrons are stupidly expensive. When I was last taking classes, they were $.50 a sheet, and you had to buy ten at a time.

One professor I had used them every class meeting, too.

That's with Scantrons, a regular piece of paper is very cheap, you could even make the students use their own. And if you're worried about printing off quiz questions, well you're already using the projector for the stupid iClickers, why not use it for that. And the faster grading iClickers/scantrons provide, that's what TA's are for.

[Questor]

No way do I want more apples in my uni.

That's the only place they're going. This model is 100% incompatible with public education.

Exactly how many private school students does Apple think there are?

The above statement only refers to the area where I work - while I would assume that public corruption rules and textbook lifetimes are broadly similar across the US, I cannot speak beyond that.

[Questor]

How much more sustainable are they than recycling paper anyway?

Scantrons are stupidly expensive. When I was last taking classes, they were $.50 a sheet, and you had to buy ten at a time.

One professor I had used them every class meeting, too.

That's with Scantrons, a regular piece of paper is very cheap, you could even make the students use their own. And if you're worried about printing off quiz questions, well you're already using the projector for the stupid iClickers, why not use it for that. And the faster grading iClickers/scantrons provide, that's what TA's are for.

The only place I've ever seen clickers used is as scantron replacements. Scantrons/clickers/online assessment purportedly offer advantages over plain paper grading - for example when you are doing statistical analysis on hundreds of students answers and trying to evaluate a test and students at the same time. Even with TAs, doing this type of analysis on 400 plain paper tests is EXTREMELY time consuming. I'm assuming that if they are going for an electronic solution, they had the problem.

BTW, if you're getting clickers for $40, you're getting a huge discount through the university.

[TronPaul]

The only place I've ever seen clickers used is as scantron replacements. Scantrons/clickers/online assessment purportedly offer advantages over plain paper grading - for example when you are doing statistical analysis on hundreds of students answers and trying to evaluate a test and students at the same time. Even with TAs, doing this type of analysis on 400 plain paper tests is EXTREMELY time consuming. I'm assuming that if they are going for an electronic solution, they had the problem.

BTW, if you're getting clickers for $40, you're getting a huge discount through the university.

I don't see clickers as replacements to tests. A test should be a long form, it should take a majority or all of a class to take. You should be able to skip from question to question. Clickers (from what I've seen of them) can not do either. It seems they are used for quizzes (10-15 questions) more than actual tests, and only at low course levels (below two or three hundred).

I can see the statistical analysis that clickers might offer, but I sincerely doubt that this information would be used by a professor on quiz questions. I can't see the benefits of the clickers outweighing the costs.

[Questor]

BTW, if you're getting clickers for $40, you're getting a huge discount through the university.

I don't see clickers as replacements to tests. A test should be a long form, it should take a majority or all of a class to take. You should be able to skip from question to question. Clickers (from what I've seen of them) can not do either. It seems they are used for quizzes (10-15 questions) more than actual tests, and only at low course levels (below two or three hundred).

I can see the statistical analysis that clickers might offer, but I sincerely doubt that this information would be used by a professor on quiz questions. I can't see the benefits of the clickers outweighing the costs.

My encounters with them in higher-ed are nil, as they became available after I got done, but where I work, the statistical analysis aspect is huge, and depending on the model of clicker, you can usually do at short answer (one word to about two sentences), and have them either graded automatically or set up on a computer to grade in a more efficient way.

Of course, the clickers have been passed by "plain-paper scanning" of tests, that offer all the advantages of clickers for data, and also all the advantages of traditional tests for free form responses. Quizes are starting to move to the same model.

Price-wise, it blows away everything.

The next frontier is to leverage a one-to-one model and use all online adaptive assessments to get around some of the granularity problems with the traditional test model. This is a long way away though.

EDIT: The analysis is actually supposed to be of more use to teachers from quizzes than tests, because it is used to determine exactly where weaknesses in understanding appear.

DISCLAIMER: Questor is an IT guy and not a teacher.