Shelling out big bucks at the campus bookstore is a college tradition that students can count on each semester. Textbook prices have risen steadily over the past two decades to the point where the average student now pays $900 a year, an expense that typically isn't covered by financial aid. But come September, publishing upstart Flat World Knowledge will offer a much more appealing price point: its books will be free.
Yes, free. The firm, based in Nyack, N.Y., launched a pilot project Monday to supply four business and economics textbooks online at no charge to several hundred undergraduates on at least 15 campuses nationwide. By giving away content through the Web, Flat World aims to upend the $5.5 billion textbook industry. "Nobody's satisfied with the status quo. Students, faculty, authors their feelings all range from ambivalent to extremely unhappy," says Flat World founder Eric Frank, a former executive at Prentice Hall, the nation's largest textbook publisher. "Why not try something different?"
Flat World's offerings won't differ much from a typical textbook in content. All have been authored by established academics and peer-reviewed before publication. It's the distribution method via the Internet that is a radical change. Video and audio clips are embedded in most texts, often adding timely examples from real-life practitioners. Plus, the texts are produced on an open-source platform, meaning they can be updated easily and professors can customize each textbook to match a particular lesson plan. Those are major advantages over paper editions, says Dana Lanham, an advertising professor at University of North Carolina in Charlotte. "Being online lets the content be so dynamic," says Lanham, who will teach some 70 students using Flat World texts this fall. "Usually textbooks are out of date as soon as you print them."
If all goes well this semester, Flat World hopes to offer its books to all academic institutions starting next January and eventually expand its titles across several disciplines. But it still faces a long road to success. There is, for one, its business model. Founder Frank and his partner, Jeff Shelstad, another Prentice Hall alum, say the company plans to forgo advertising on the site and instead make money by selling supplemental materials like study guides, podcasts and paper copies printed on demand for about $35, or about a third of the cost of a traditional textbook.
But some are skeptical. James Koch, former president of both the University of Montana and Old Dominion University, in Norfolk, Va., warns that despite the savings in production costs compared with traditional textbooks, Flat World will likely have smaller margins and thus the start-up could struggle to attract more authors. "I just don't see how they will be able to offer equal compensation," says Koch, who has studied the textbook industry extensively. "Their utopian approach is based on the hope that real economics don't apply."
University administrators may offer resistance too. The majority of campus bookstores, which are usually very profitable, are owned by schools themselves. "Why would a school president want to give up that nice little revenue stream?" Koch asks. But colleges may soon have little choice; at least 34 states have proposed or passed legislation to control textbook costs, and in February, the House passed a similar measure, which is now awaiting Senate approval.
For now, students themselves are becoming savvier consumers. As the industry moves toward more frequent editions of textbooks as well as ones that are tailor-made for different colleges tactics Koch and other critics say is designed to suppress a large-scale market for used textbooks many undergraduates are searching e-commerce and social-networking sites like Facebook for schoolmates who may be looking to sell the books they just finished using. And some try to save money by muddling through without any textbooks. For these cash-strapped students, says Nicole Allen, a consumer advocate at the U.S. Public Interest Research Group, Flat World's launch is a godsend: "It's a great sign that the market is finally changing."