An Amusing Take on Pearson and Non Fungible Tokens for Textbooks

August 19, 2022

I read “Absolutely Terrible Textbook Publishing Giant Pearson Wants To Make Everything Even Worse With NFTs.” The write up states:

There’s an oligopoly of just five giant publishers, and they long ago learned that they are in the best market ever: the buyers of their textbooks (the students) have no choice and are forced to buy the books if their professors assign them — and more such books will get sold every semester that the professor requires it. Therefore, textbook prices are insane by any imaginable standard.

I think the viewpoint is one widely held. However, why not consider the issue from the point of view of the oligopolies themselves.

First, creating textbooks is an expensive, time consuming business. Once one of these textbooks is adopted widely, then that book becomes the goose that lays golden revenue eggs semester in an semester out. A professional involved with the turgid and generally crazy economics textbook was known as “Sammy” where the professional worked. This person told me that “Sammy” was in double digit editions and would continue on this path of persistent revisions to keep that money coming in. Losing the Sammy thing, the publisher’s textbook division could plunge into red ink quite rapidly. Therefore, the oligopolists want to hang on to their winners, keep others like professors who will write a book and make it available under Creative Commons or some similar nonsense, and make old editions useless to students in class now. I thought that was useful information when I learned it a decade ago. I have no reason to believe that the insight remains valid today.

Second, some countries won’t buy or authorize use of US textbooks unless those books are in the languages identified by the country as acceptable. Canada, for instance, once required that Ukrainian be used in textbooks in one province because a majority of students spoke that language. Of course, the textbooks had to be available in French and English too. Translating nearly incomprehensible gibberish about economic, political science, or organic chemistry is expensive. Don’t forget the workbooks, the online tutorials, and other collateral required to land the “adoption”.

Third, professional publishers are not well known as businesses. One doesn’t learn how to build a monopoly on legal, accounting, or government regulatory information in business school. One learns the art and craft of taking essentially jargon filled content and converting it into something that a person skilled in a field can use to justify high fees. This “learning” occurs when a person studying law gets to buy textbooks. A tiny percentage of lawyers accept work at a professional publishing house and can practice the art of monopoly.

Each of these three factors is expensive — creating books, getting adopted and conforming to buyer rules, and hiring people and letting them learn how to be professional publishers.

I remember a meeting at Cornell University years ago. The topic of publishing papers in an online journal or a peer reviewed journal would be acceptable for those on a tenure track. The answer was [a] writing a widely adopted textbook was important, [b] publishing in a peer reviewed journal owned by a professional publishing outfit was very helpful, and [c] doing anything without the blessing of the professional publishers was stupid. Today it may be different.

But high prices mean quality. Why shouldn’t certifiers of the best and brightest charge a lot of money? Professional publishers will point out that that is the way oligopolistic certifiers work. Don’t like it? Don’t go to school. Besides NFTs are hip, and professional publishers want to be with it.

Stephen E Arnold, August 19, 2022

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