Online Shopping Sends Textbook Prices Falling

Summary

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Podcast Summary: WSJ Your Money Briefing

Episode: Online Shopping Sends Textbook Prices Falling
Date: December 27, 2017
Host: Charlie Turner
Guest: Sarah Chaney, Wall Street Journal Washington Reporter

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Episode Overview

This episode examines the welcome trend of falling college textbook prices, a first after years of relentless increases. Host Charlie Turner speaks with reporter Sarah Chaney about how the rise in online comparison shopping is reshaping the textbook market, pushing publishers to innovate and offer students more affordable options.

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Key Discussion Points & Insights

The Falling Trend in Textbook Prices

• Sharp Reversal:

  • For decades, textbook prices climbed rapidly.
  • Recently, the trend has reversed:
    • “Prices for educational books and supplies… have fallen on an annual basis for three consecutive months.” (Sarah Chaney, 00:56)
    • The Labor Department reported a 1.6% annual decline in September—the fastest rate of decrease for the category since tracking began in 1967.
    • College textbooks make up about 90% of the “educational books and supplies” data tracked (01:34).

• Why Prices Are Dropping:

  • Online comparison shopping puts pressure on publishers.
  • Students increasingly discover low-cost options online, driving competition and price cuts.
  • Example: Macmillan Learning cut average print textbook prices by 20–25% in the 18 months ending October, largely due to “students demanding more affordable books and materials” (Sarah Chaney, 02:48).

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Online Options for Students

• Marketplace Expansion:

  • Students rarely start at the campus bookstore anymore.
  • Major sites include:
    • Amazon
    • eBay
    • textbooks.com
    • Barnes & Noble (offering rentals)

• Free & Innovative Resources:

  • “OpenStax… offers free downloadable copies of a lot of different introductory textbooks. So it’s essentially at no cost for students.” (Sarah Chaney, 04:08)

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How Publishers Are Responding

• Adapting to Digital Demand:
  • Growing share of ebooks and digital content in the textbook market:
    • “Ebooks are accounting for a growing share of the consumer price index data for educational books. So that’s likely influencing the overall price data.” (Sarah Chaney, 04:32)
  • Alternative formats:
    • Loose-leaf binders (cheaper than hardcovers)
    • Interactive digital books with diagnostic quizzes
    • Courses bundled and sold to professors, enabling group price negotiations that often lower per-student costs (04:44).

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The College Bookstore’s Uncertain Future

• Despite price drops and new digital options, it’s unclear if students will return to campus bookstores.

• Publishers must keep innovating and possibly cut prices further.

• Expert Assessment:

  • The drop in prices is more likely due to the increasing prevalence of cheaper digital alternatives than just print price reductions:
    • “Experts and economists I spoke with said it’s most likely the latter.” (Sarah Chaney, 05:15)

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Notable Quotes & Memorable Moments

• On the trend reversal:

  • “But in recent months, we’ve actually seen the reverse occur… prices for educational books and supplies… have fallen on an annual basis for three consecutive months.”
    — Sarah Chaney (00:56)

• On student shopping habits:

  • “I think one student that you quoted in the story said, ‘Well, I’m never going to a bookstore again,’ because I think she could… find pretty much anything she wanted online for a lot cheaper price.”
    — Charlie Turner (03:29)

• On open-source textbooks:

  • “There’s a site called OpenStax which offers free downloadable copies of a lot of different introductory textbooks. So it’s essentially at no cost for students.”
    — Sarah Chaney (04:08)

• On publisher innovation:

  • “Publishers are offering loose-leaf binders… interactive digital books and courses… so professors can negotiate the prices to be lower per student.”
    — Sarah Chaney (04:44)

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Noteworthy Timestamps

• 00:23 — Episode intro and main theme introduction
• 00:56 — Sarah Chaney explains the unique drop in textbook prices
• 02:15 — Discussion of publishers lowering print textbook prices
• 03:40 — Key online sites and free resources for textbooks
• 04:21 — Overview of publisher adaptation and digital options
• 05:15 — Experts’ views on digital options driving the price decline

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Tone & Language

• Conversational, fast-paced, and practical
• Focused on concise, actionable financial information with real-life student perspectives and expert context

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Summary Takeaway

A combination of increased online shopping and digital innovation is finally making college textbooks more affordable for students. This marks a major shift in the market, benefiting students and forcing publishers to adapt their business models. As digital options become more commonplace and major sellers compete online, students now have more power—and more choices—than ever before when it comes to buying their textbooks.

Transcript

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[Money Matters Announcer]

this is yous Money Matters from the Wall Street Journal.

[Charlie Turner]

Welcome to youo Money Matters. I'm Charlie Turner in New York. It may be relatively small comfort to those wrestling with the ever rising costs of colle, but for college students and their parents, it's still good news. Textbook prices are falling, and the reason is the same reason for just about any other product, a surge in online comparison shopping. Joining us is Wall Street Journal Washington reporter Sarah Chaney. Sarah, prices for textbooks have gotten prohibitively expensive, but now students can find the exact same textbook online for a much lower price, can't they?

[Sarah Chaney]

Yes. Yeah, they actually can. And it's a pretty interesting trend because for so many years textbook prices were rising at a really rapid clip. But in recent months, we've actually seen the reverse occur. So prices for educational books and supplies, which is how the Labor Department classifies textbooks, have fallen on an annual basis for three consecutive months. This actually started with a 1.6% annual decline in September, which was the fastest rate of decrease for the category of goods going back to 1967, which was when the Labor Department started tracking this data. And in October and November, prices also fell. And it's important to note that we're primarily talking about college textbooks here. College textbooks account for about 90% of the goods in the educational books and supplies group. It also includes books for elementary and high school classes as well as encyclopedias.

[Charlie Turner]

It seems to me this is resulting in two things. Students can obviously find the same textbook online at a much lower price, and it's also forced publishers to lower their prices on these textbooks.

[Sarah Chaney]

Yes, that's pretty much accurate. So the old model in which hardcover textbooks are sold in college bookstores is really being appended as a number of different competitive pressures, mainly in the online realm as well as students demand for more affordable books propel traditional publishers to offer a lot of different cheaper options for students. So these lower priced digital options are coming through in the consumer price data for textbooks. And in some cases, like you said, we're actually seeing publishers lower prices for print textbooks. So for example, Macmillan Learning, which is a textbook provider and online learning company, said it has reduced its average print textbook prices by somewhere between 20 and 25%. And the 18 months ended in October. And this was in part due to students demanding more affordable books and materials.

[Charlie Turner]

I'm speaking with the Wall Street Journal's Sarah Chaney, and you're listening to youo Money Matters from the Wall Street Journal. Thanks for listening everyone. Sarah, I think one student that you quoted in the story said, well, I'm never going to a bookstore again because I think she could ob find pretty much anything she wanted online for a lot cheaper price. What are some of the sites that students are scouring?

[Sarah Chaney]

Sure, there's obviously Amazon and that's a huge force. That's a site that a lot of students are going to first before they even check the campus bookstore prices, et cetera. You also have eBay and textbooks.com and then you also have Barnes and Noble, for instance, offering rentals of textbooks. And so those are just some of the options we're seeing. And then what's really interesting, I think is there's a site called OpenStax which offers free downloadable copies of a lot of different introductory textbooks. So it's essentially at no cost for students.

[Charlie Turner]

And you write that publishers are also responding in other ways, offering alternative formats, including ebooks and interactive digital books with diagnostic quizzes.

[Sarah Chaney]

These are also other cheaper options. And ebooks are accounting for a growing share of the consumer price index data for educational books. So that's likely influencing the overall price data there. And publishers are offering loose leaf binders which are cheaper, and these interactive digital books and courses that publishers are selling in volume to professors so professors can negotiate the prices to be lower per student.

[Charlie Turner]

I wonder if this is enough to bring students back to the bookstore, but I guess that remains to be seen. Publishers would have to continue to drop their prices, right?

[Sarah Chaney]

It's hard to kind of say exactly how much of the fall in textbook prices is due to publishers lowering print textbook prices versus publishers offering these cheaper digital options. The experts and economist I spoke with said it's most likely the latter.

[Charlie Turner]

Wall Street Journal Washington reporter Sarah Chaney. Sarah, thanks a lot for joining us.

[Sarah Chaney]

Yeah, thanks so much for your time.

[Charlie Turner]

And that's your Money matters. Thanks for listening. I'm Charlie Turner with the Wall Street Journal.

[Money Matters Announcer]

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