'Name Your Price' Textbooks Hit The Web
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Of the many economic riddles the Web has posed to traditional businesses, few are more challenging than the free vs. paid conundrum.
Now, a marketing professor from Columbia Business School is testing out a mix of free and paid where it's bound to meet with a chilly reception: college textbooks.
Starting today, Noel Capon will offer his textbook, "Managing Marketing in the 21st Century," as a free download on his Web site. Hard copies of the book will continue to sell for $45.
Following in the footsteps of musical acts Radiohead and Nine Inch Nails, who let their fans pay what they wanted for their music online, Capon will ask the students who opt for the free download to pay what they think is fair midway through the semester. Capon will donate half the proceeds to college scholarship charities.
Capon describes himself as frustrated with the publishing system, and a professor sympathetic to students struggling with textbook prices that he calls exorbitant.
"What's going on in this business is that [cost is] becoming a major social issue," he told InternetNews.com. "It never really concerned me before. But it got to me the last few years. They're in the $100 to $150 range, and that's just out of sight."
Capon's current book, brought out by Wessex Inc., a boutique imprint that he finances, is not his first. He published a previous marketing text through Prentice Hall, but he said the sales representatives have heavy incentives to promote the books of the established, incumbent authors that it was next to impossible for his book to gain any traction.
"Long story short, Prentice Hall didn't put any effort into this book," he said. (InternetNews.com was not able to reach Prentice Hall for comment.)
Following his split with Prentice Hall, Capon set to work on the current book. Until today, he has been offering an electronic version of it for $25 dollars, but he said that about three quarters of his students have opted for the $45 hard copy. Lowering the price from $25 to free will certainly adjust that ratio, but Capon still expects a majority of the students will opt for the traditional format, for the same reason that e-book readers have struggled to gain market share.
"There are some people who like reading online, but some people like reading a book and marking it up," he said.
He's not expecting to make much money from the voluntary contributions. Looking at the Radiohead and Nine Inch Nails experiments, he said the "lesson is most people don't want to pay. They're happy to take it for free."
But even giving the book away, there's still money to made from the peripherals. Capon will continue to sell supplementary materials to the text, such as study guides and electronic flash cards.
He likens the business model to the British airline Ryanair, which has been experimenting with ultra-low fares in the hopes of making money from in-flight sales of food and beverage. It's also similar to Hewlett-Packard's (NYSE: HP) long-time strategy of taking a loss on printers but netting a healthy margin on cartridges.
For Capon, it's also a way of broadening the reach of his book in a way that he was unable to achieve through a major publishing house. Aside from the novelty of his approach, he expects the sheer economics of the situation will compel other instructors to consider his book versus a text that will set students back in excess of $100.
"The idea to now offer a free option means that people around the world will have to look at it," he said. "Any professor that has concern for the financial welfare of their students would have to take a look at my book."
He's not alone in his concern. Last month, Congress passed the College Opportunity and Affordability Act, which included language requiring publishers to notify professors about the costs of textbooks before committing to a purchase order.
As to the extent that his experiment will reshape the publishing industry, Capon is pragmatic.
"The problem of course is the textbook publishers is they have a structure in place, and it might be very difficult to go to a new model," he explained. "It's very, very tough for participants in a mature industry to make those changes if a new model comes along."
But if nothing else, it will give him a hands-on case study that he can incorporate into his next marketing book.