College Fraternities vs. the Textbook Industry

This site's rather odd but they have some interesting material. http://www.lewrockwell.com/

"If you were an executive with a large book publishing company, and you were in charge of the college textbook division, how would you deal with this multi-phase problem?

(1) The bid/ask arbitrage opportunity: College students must pay 10 to 15 cents per page to buy new textbooks that cost a penny a page to print and deliver. College bookstores receive a mere 10% to 15% discount. This is the most captive market in publishing. It is the ultimate cash cow, and has been since 1946. Cash cows are tempting to milk.

(2) The technological revolution: A scanner costs $70. A copy of Adobe Acrobat Pro costs $450, but about $250 in a campus bookstore. With these two products, you can make a clear digital copy of any book: a PDF file.

(3) The World Wide Web: A document can be posted on-line, anywhere on earth, and can be accessed in seconds from anywhere on earth. Server space is cheap. For example, I have almost 100 books on-line, which costs me $5/month (www.freebooks.com). I could have 500 or 1,000 books on-line for that price. My server is in Germany, I think: www.1and1.com. All it takes for a search engine to find a searchable PDF file is an HTML link to the file. This can be posted anywhere on the site.

(4) The division of labor: A fraternity member could scan in a textbook in about 8 hours, depending on the speed of the scanner. Recently initiated members could be required to do this as part of initiation week. There are lots of campuses and lots of fraternities. They are bound by oaths of silence.

...

There are about 15 million full-time college students in the United States. They would no longer be a captive audience. How long would it take for word to get out? There would be blog sites monitoring the appearance of new sites, updated sites, moved sites, and the latest textbooks.

As a book-publishing executive, what could you do to stop this?

If companies are not forthright with investors about a practical counter-strategy, investors should conclude that the stocks of these firms are likely candidates for shorting.

There would be one great winner. Hewlett-Packard's toner cartridge division would become even more profitable.

CONCLUSION

The copyright laws are not going to survive in their present form. Neither is the publishing industry.


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