Insourcing

This NYT story on the reimportation of cheap college textbooks from India misses the entire, delicious point: Americans line up as huge fans of globalization when the money saved goes to them rather than their employers (thanks, WGIIA).

Over the last few years, many American students… have been buying American textbooks printed in India, as word has spread of the larger savings available… The textbooks are printed legally in India under copyright arrangements worked out over the last decade by American and British publishers. Americans are huge fans of globalization — when they’re making the moneyUsing tax breaks and cheap labor, Indian companies publish the books in black-and-white, low-quality paperback editions, and sell them for as little as 10 percent of the cost of the same book in the United States. But under the licensing agreement, the books may be sold only on the Indian subcontinent and in surrounding countries…

There are no penalties for students who import books for their own use, under a 1998 Supreme Court decision that ruled that manufacturers who sell goods more cheaply overseas than in the United States have no protection against having their products sold back to the American market. [Link]

The other interesting point here is the same problem intellectual property publishers have been facing for decades: differential pricing is not sustainable in an efficient market. You can’t sell Microsoft Windows for 10% the cost in India because Americans will import the lower-price version. And you can’t sell it at full cost and expect decent sales in a developing country, only the rich will buy. All you can do is segment the market with a lower-featured edition.

And that’s exactly what these textbook publishers have done. The problem is, students are satisfied with the lower-quality editions because hardly anyone buys textbooks for pleasure, especially not at $150 a pop.

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26 thoughts on “Insourcing

  1. as a broke college student, does anyone have the links to these Indian sites where i can buy text books from? also Universities make massive profits from text book sales, they often markup the price by 40% or more, also many school’s print University Specific Editons of texts which students can only purchase from the bookstore.

  2. Yup. gotta agree with Parikshit. Been doing that forever. Why do you think the FOB’s bags weigh so much when she arrives in the US? Spices? :)

  3. On a more serious note, I’m glad that the NYT actually pointed out that the real issue is that textbook prices are so inflated here.

  4. manish,

    Americans are huge fans of globalization — when they’re making the money

    a truer statement was never said. good post this one.

    =)

  5. Yup. gotta agree with Parikshit. Been doing that forever. Why do you think the FOB’s bags weigh so much when she arrives in the US? Spices? :)

    Talcum powder ;)

  6. On a more serious note, I’m glad that the NYT actually pointed out that the real issue is that textbook prices are so inflated here.

    I don’t necessarily agree. The publisher who does the book first has to pay for proofreading, copyediting, fact-checking, author’s expenses, research costs, advances, illustrations, maps, and every thing else that goes into a textbook. It HAS to be accurate, far more so than a regular book….If illustration 2A.11 was in the wrong place in a medical text, locating the pancreas in the chest cavilty, would you really be ok with your future-doctor memorizing that?

    It costs less in India because the Indian publisher buys the rights from the US publisher, and usually the entire typeset or camara-ready pages, for a fraction of what it costs the US publisher to create it. Add to that cheaper printing, cheaper paper, cheaper labor, and cheaper quality (e.g. black and white photos, 2 color instead of full, etc.) and you’ve got indian publishers still making a healthy profit…

  7. Since in the free market economy cheap price rules the market, the only thing to be done by US publishers is either to lower their price of books in USA or stop printing books in USA and transfer their entire operations to third world countries like India and then export from India.

  8. Is it time to start singing paeans to free markets everywhere? Irrespective of how much time it might take to proofread a textbook, it is still overpriced at $150. Especially ones that are in their 7th edition and 11th reprint and only have more colors in them that the 6th edition version.

  9. Irrespective of how much time it might take to proofread a textbook, it is still overpriced at $150. Especially ones that are in their 7th edition and 11th reprint and only have more colors in them that the 6th edition version.

    touche ;)

  10. Sure, Americans are fans of outsourcing if they’re make the money. Ditto with the desis. However, will us desis still be as big fans of outsourcing once the work migrates to even cheaper countries? I know outsourcing of services is a garangatuan market but some of the low end stuff will start moving to other countries. And you know what, the Indian media will start being the prophet of doom saying, “the boom is over and the sky is gonna fall” or some bullshit and suddenly everywhere you will start reading that outsourcing is not good for the desh.

  11. And you know what, the Indian media will start being the prophet of doom saying, “the boom is over and the sky is gonna fall” or some bullshit and suddenly everywhere you will start reading that outsourcing is not good for the desh.

    It is already happening, i.e. the work being moved to cheaper countries. However, media hasnt caught on to it. there are many such “prophets of doom” among my IT friends in India. They predict in a few years lots of outsourcing work will move to places like phillipines, thailand etc. BUT it is in sheer numbers that India’s strength lies. Nowhere else can a huge corporation get large numbers of qualified workers onto outsourced work at a moment’s notice… unless China succeeds in doing something about that.

  12. When i first got here, i had 3 huge suitcases ( British Airways special student allowance – extra suitcase :D ). One was full of pots, pans, pressure cooker and other kitchen essentials. One was full of clothes. The other was exclusively for textbooks – over 35 covering every course i ever would take :D I later calculated that i had saved over 4000 $$ :D

  13. screw Mc-Graw hill

    There always has been Tata-McGraw Hill, just like EEE.

    Almost every publishing house has always had an India division that is also feeder to markets in Thailand, etc.

  14. There always has been Tata-McGraw Hill, just like EEE.

    Yes, I remember. But in grad school sometimes I had to buy the real McGraw Hill book. They are expensive !!! Thats when I missed those EEE books the most. :-)

  15. I don’t necessarily agree. The publisher who does the book first has to pay for proofreading, copyediting, fact-checking, author’s expenses, research costs, advances, illustrations, maps, and every thing else that goes into a textbook.

    Easily solvable – outsource this shit to India :)

  16. @cicatrix,

    having seen the writer’s side of textbook a little, i have to disagree with you. the proof reading that goes on is largely non-technical, burden of accuracy almost completely rests with the author of the book, and in fact these days most technical authors have access to such high quality typesetting software that the manuscript is in near publishable form when it comes to the publisher.

    proofreading and editing are not easy i agree with you—the editors authors work with are incredibly good and do put in lot of work. but they are largely underpaid, there is no way their salaries contribute to the text cost. often first time authors make very little money too, it is the publishing house that gets most of the proceedings. they tend to be pretty nasty about copyright enforcement, so much so that many authors get shortchanged when it comes to their own work. re: popular text authors, it is not as if royalties to them takes up a big fraction of the cost either. for a 100$ book, my guess is that hardly any author gets more than a dollar.

    a factor that could be the reason for high costs is that very few people buy them. but i really doubt it, since the price is high even for books that almost all libraries would buy.

  17. @cicatrix..

    just to clarify, we are talking college/grad school texts here.

    i have no clue abt high school ones, maybe the publisher is responsible for accuracy and stuff there.

  18. i think that if india keeps this up, we will become the world power and rule the world! muahahahha!

  19. This all sounds like a dream come true. Does anyone know of any great textbook sites or sources for buying textbooks?