The Viability of the $30 Casebook: Intellectual Property, Voluntary Payment, Open Distribution, and Author Incentives

• Publication year: 2014
• Citation: Vol. 22 No. 1

The Viability of the $30 Casebook: Intellectual Property, Voluntary Payment, Open Distribution, and Author Incentives

Lydia Pallas Loren

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Loren: The Viability of the $30 Casebook

THE VIABILITY OF THE $30 CASEBOOK: INTELLECTUAL PROPERTY, VOLUNTARY PAYMENT, OPEN DISTRIBUTION, AND AUTHOR INCENTIVES

Lydia Pallas Loren^*

TABLE OF CONTENTS

I. INTRODUCTION.............................................................................................73

II. THE TRADITIONAL CASEBOOK PUBLISHING MODEL...........................74

A. DEAD TREES AND MARKETS.................................................................75
B. THE CHANGING NATURE OF LAW STUDENTS: DIGITAL NATIVES, RAISED WITH THE TEMPTATIONS OF PIRACY..................78
C. TRADITIONAL CASEBOOK PUBLISHERS' "EMBRACE" OF DIGITAL TECHNOLOGY.........................................................................80

III. SEMAPHORE PRESS: AN ALTERNATIVE PUBLISHING MODEL..............83

A. BASICS OF THE MODEL..........................................................................83
B. DO STUDENTS PAY?................................................................................85
C. WHY ARE STUDENTS PAYING?..............................................................87

1. $30 is a Fair Price..............................................................................88
2. Students Don't Realize that they Can Pay Less, or Nothing at All......................................................................................................89
3. Students Want to Contribute to the Success of An Alternative, Lower Cost Model...............................................................................90

IV. THE FUTURE VIABILITY OF THE MODEL.................................................93

A. THE MODEL "WORKS"...........................................................................93
B. CHALLENGES TO THE MODEL..............................................................93

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1. Student Awareness of Payment Rates...................................................93
2. Expanding Topic Breadth....................................................................93
3. Changing Prices...................................................................................94
4. Open Source Alternatives.....................................................................94
5. Publishing High Quality Texts............................................................96

V. CONCLUSION..................................................................................................98

APPENDIX.....................................................................................................................99

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I. Introduction

The utilitarian-based rationale for providing protection for intellectual property posits that without legal rights to exclude copying, the limited ability to recoup investment in the creation of an intellectual property asset, such as a new book or an invention, will result in a sub-optimal level of investment in the creation of new intellectual property assets. The constitutional grant of authority to Congress to adopt our patent and copyright laws is based on this rationale¹ and, it appears, that system has served us well for over 200 years. Digital technology, however, has significantly reduced the ability of copyright owners to effectively control the reproduction of their copyrighted works. This reduction has led some copyright owners to seek greater legal protections, higher available penalties, and increased criminal sanctions for infringement. At the same time, some copyright owners have experimented with other mechanisms to recoup investment and turn a profit. This Article concerns one of those experiments, exploring the traditional casebook publishing market and reporting on the experiences with voluntary payment of a new digital casebook publisher: Semaphore Press.

In the fall of 2013, the sixth edition of the popular casebook, Contracts & Related Obligations by Robert Summer and Robert Hillman, sold for a list price of $211.² It is not uncommon for a new hardbound copy of today's law school casebooks to exceed $200.³ And, each year, the prices inch ever higher. Why hasn't the reality of widespread digital technology brought down prices for casebooks? Is there a different way for students to obtain their required reading materials for their law school classes that will help to reduce the crushing debt that obtaining a J.D. currently entails?⁴ While tuition is the driving force behind the cost of obtaining a legal education, the cost of books can add significantly to the debt a student takes on. If a student is enrolled in just four classes every

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semester for six semesters with an average cost of materials of $200 per course (some will be less, but some courses will require statutory or other supplements, offsetting the lower-cost books), almost $5,000 will be required to purchase the assigned reading.

Part II of this Article explores various dynamics in the traditional publishing market that have led to the current prices for casebooks. The current and next generation of law students are being raised digital, inducing changes in the way that content is distributed to students. Slowly the traditional casebook publishers are employing digital distribution models. Those current digital distribution models, described in Part II, still result in access prices close to $200 per student per course.

Part III of this Article describes the experiences of Semaphore Press, a publisher of law school casebooks that offers a very different approach to pricing and distribution. Semaphore Press offers digital copies of required textbooks for law school classes at a suggested price of $30. In addition, a student can pay less (or more) than the suggested price, or even download a copy of a required casebook for free. Semaphore Press's commitment, embodied in this design, is that, whatever else happens, the student obtains access the course materials. Is this a viable model? Will students pay for their books or will they freeride? As detailed in Part III, the answer is clear: The model is viable; overwhelmingly students pay for their books. In fact, approximately 83% of students enrolled in courses in which a Semaphore Press book was assigned paid for the book. Part III also details the amounts of their payments and explores why students may be paying for digital books that they know they can obtain for free. What this might say about the future of law school educational publishing and the viability of the $30 casebook is the subject of Part IV.

II. The Traditional Casebook Publishing Model

The experience with a $30 casebook must be put in its appropriate context. That context includes hardbound casebook prices that now routinely exceed $200, not including any statutory or case update supplement. That context also includes a lack of buyer control over the purchasing decision. The professor selects the book, but for the most part does not face the cost of her choice. In fact, professors often are not even aware of the price of any particular book they are considering for adoption.⁵ This lack of price sensitivity means that publishers set the price of textbooks with little direct input from their actual

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purchasers: students. In general, students can't comparison shop for cheaper alternatives.⁶ They must buy the assigned books chosen by the professors.⁷

A. DEAD TREES AND MARKETS

A lot of resources go into the business of casebook publishing. First, of course, are the efforts of the authors. They plan the organizational content of the book, select and edit the cases included, and write the additional content contained in the book. On the publishers' end, editors must be employed to seek out and select which books to publish. Additional editors are needed to review the written material, format the text, prepare the indexes, and complete the layout. In the print world, the books then have to be printed and bound. The published casebooks then have to be marketed to professors for potential adoption. That marketing includes not only mass mailings advertising individual titles, as well as complete catalogs, but also providing free "review copies" to hundreds of professors. Additionally, publishers pay sales representatives to visit professors at their schools and sponsor lavish sales booths at law professor conferences, complete with prizes offered to professors who take the time to visit their booths.⁸ Finally, once adopted as required texts at various law schools, the books need to be shipped to bookstores and customers across the country. All told, this operation costs quite a bit, and one can begin to understand what might lead to prices exceeding $200.⁹

Additionally, the vibrant used book market, made lawful by the "first sale doctrine" in copyright law,¹⁰ prods publishers to try to obtain in the sale of a single book a profit that takes account of three or four different students using

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that same physical book over several years. Even those review copies that are sent to professors for free (some of which are stamped with "Review Copy Not To Be Resold") are often sold into the used book market.¹¹ Bruce Hildebrand, executive director of higher education at the Association of American Publishers, recently asserted that "[t]he single greatest contributor to the price of a textbook is a used textbook."¹² When a publisher prices a book, it is factoring in the competition and lost sales opportunities that the resold books embody.

Competition normally drives prices down. The consolidation in the publishing industry is well known, leading to less competitive pressure on prices.¹³ For assigned textbooks, one cannot easily substitute a different book, but competition also includes competition with "used" versions of the same product.¹⁴ However, competition from the used book market in the traditional textbook publishing...