Chegg, the web startup centered around renting college textbooks to students, received a nice write-up in the New York Times this weekend as a company making money in the midst of a down economy. They do so by correcting gross inefficiencies in the textbook business.
The textbook business is one of the few aspects of the print market where the idea of renting books could work at all in a business sense. Textbook publishers disincentivized purchase paths that would actually add profits to their pocketbooks by their insane pricing schemes.
The bulk of the cost of a book is in it’s printing. Paper isn’t cheap these days, and thick, heavy text books use a lot of it, and generally use full color.
On the other hand, ‘printing’ a book for a Kindle or other eBook reader has relatively no cost, yet textbook publishers charge right around the same price for the virtual copies of their books. If they were to offer substantial discounts for eReader copies of their books, their profit margins would be incredible.
Instead, in yet another example of Heritage Media stupidity, they shy away from the new format and contribute to upstarts like Chegg undercutting their business in the same way that Craigslist contributed greatly to the downfall of the newspaper business.
Still, whenever I see in the headline “Rent Books,” or “Netflix for Books” I always think of this comic from Johnny Wander:
