Viewpoint: The Economic Case for Creative Commons Textbooks

Fred M. Beshears
Senior Strategist
University of California at Berkeley
fmb@berkeley.edu

Talk to virtually any student about the cost of textbooks and you will likely hear loud complaints about the expense associated with course texts. According to a recent General Accounting Office report:

"... the average estimated cost of books and supplies per first-time, full-time student for academic year 2003-2004 was $898 at 4-year public institutions, or about 26 percent of the cost of tuition and fees. At 2-year public institutions, where low-income students are more likely to pursue a degree program and tuition and fees are lower, the average estimated cost of books and supplies per first-time, full-time student was $886 in academic year 2003-2004, representing almost three-quarters of the cost of tuition and fees."

While there are explanations that attempt to justify textbook prices in the report, there are few suggestions to contain or reduce the cost to students.

Recently, however, proposals have been advanced that might significantly reduce the cost of textbooks benefiting students as well as faculty, colleges and universities. One significant proposal put forward by Ira Fuchs, Vice President for Research at the Mellon Foundation, called for the creation of Educore - an organization dedicated to the development of open source educational software. The Educore proposal envisions a consortium of 1,000 colleges and universities around the world where each member institution would be asked to contribute between $5,000 and $25,000 per year, based on size.

Inspired by Fuchs's vision, it is possible to conceive of a similar approach to acquire and distribute high-quality creative commons content that could be used in any of the following combinations: (a) as the basis of an online course, (b) as an electronic textbook, or (c) as a customized printed textbook for use in a traditional college course. We call this approach OpenTextbook.

OpenTextbook's business model would be simple: traditional colleges and universities would agree to pay membership dues to purchase content from one or more open universities, such as the British Open University (UKOU). OpenTextbook would not develop the content; it would purchase content in bulk. In this sense, OpenTextbook would be similar to consumer cooperatives and buying clubs that pool member resources to gain purchasing power in the market.

To get an idea of how much high quality content costs, the UKOU spends on average $3 million dollars (U.S.) per course on content development, and they have more than 200 undergraduate courses in their inventory, which comes to a total investment of $600 million. They also keep their content updated on a regular basis, which, among other things, means replacing each course from scratch after eight years. In other words, the UKOU currently spends around $75 million per year on content development for these courses.

If the OpenTextbook coalition distributed this cost evenly to each of its members, the annual membership would come to $75,000 a year per campus. For a school with an enrollment of 25,000 first-time, full-year students, this comes out to three dollars per student per year: a bargain compared to the current $898 per year cost of textbooks.

For its part, the UKOU may see a partnership with OpenTextbook to be in its long-term interest. For starters, the coalition would be covering a large percentage of the UKOU's current operating costs (around 40 percent). Of course, some in the UKOU may believe that they would be giving up a strategic asset by placing their content in the creative commons. However, if the UKOU chooses not to partner with the coalition, the coalition may find another partner with similar capabilities. In which case, the UKOU may not only lose the competitive advantage it has now with its proprietary content, but it would also miss out on the revenue stream offered by the coalition. On a more positive note, the goal of providing low cost (virtually free), high quality learning resources to the world would seem to align well with the overall mission of an open university.

In addition to saving money, OpenTextbook's objective would also be to give faculty the freedom to customize creative commons content, and use it as a substitute for mass-produced commercial textbooks. It is also possible for campuses to encourage instructors to use open textbook content by providing faculty stipends as well as paid student and staff support to help customize course content. Some schools might support these costs by establishing a course material customization fee that could be far less than the current cost of commercial textbooks.

To the extent faculty choose to substitute OpenTextbook content, the cost savings for students could be substantial. Even when allowing for the extra expense of customized content, course materials could be substantially less expensive than the traditional textbook model.

Unlike MIT's Open Courseware initiative, this approach focuses on content for the big introductory courses that account for a large percentage of student eyeballs and a substantial portion of the textbook market. To put this in perspective, at Berkeley approximately 120 courses represent nearly half of the undergraduate enrollment.

According to our discussions with faculty, we find that a fair number of those who teach large introductory courses would be willing and able to substitute open content for the commercial textbooks currently in use, especially if the university could support their need to customize the content.

Some argue that faculty might be resistant to losing the potential revenue from authoring textbooks. Our initial findings are that only a very small percentage of faculty actually write textbooks. We also find that of this number only a small percentage report that they make a significant amount of money from their textbooks. On the other hand, we find that faculty who select textbooks for large survey courses are interested in the money that would be generated from a course material customization fee.

For discussion purposes, here is an outline of how a residential university could establish a course material fee to pay for commercial textbooks and/or to pay to customize the OpenTextbook content.

1. Identify 100 target courses (e.g. 100 large courses that use textbooks and that map out well to the course material provided by the OpenTextbook consortium).

2. Do a study to determine how much undergraduates currently spend per year on average for these courses. Let's say students spend $500/year on average for these courses.

4. The institution establishes a course material fee for these courses, which is some percentage of the current textbook cost (e.g. a 100% fee would be $500/year for first-time, full-year students). Obviously, a lower percentage fee would save students money; a higher percentage would give the university more money to work with. Schools with different financial models and objectives could set their fees accordingly. For example, Ivy League schools may want to add value for their students, and for their students a 100% fee would be a small part of the overall cost of their education. On the other hand, community colleges may want to have a 0% fee to hold down costs for their students.

5. Students would not be required to purchase textbooks for the 100 courses covered by the fee.

6. Faculty are free to assign commercial textbooks for these courses, but if they do the cost will be covered with revenue from the course material fee.

7. If faculty use OpenTextbook content, then the money that would otherwise be spent on textbooks could go towards customizing the OpenTextbook content (e.g. it could go for faculty stipends, student support, and paid staff support, etc.).

8. Some schools may also want to establish a policy where the materials developed with the fee would also go into the creative commons. If schools do this, then the content developers back at the Open University would be able to select from the locally developed materials to upgrade the course materials they create/manage on an on going basis.

OpenTextbook has yet to take hold as a formal consortium. Rather, we are in an exploratory phase, introducing the concept to stimulate discussion of a number of different but interrelated cost savings issues, each representing a different lever that policy makers could move separately or together. Some schools, for example, may want to treat the open textbook content simply as a library resource. Others may want to provide faculty with financial incentives and resources to customize the coalition's content. Also, any specific policy proposal would need to address licensing issues governing how said customized content would be owned. And, finally, different means of distribution (electronic vs. print) would entail different costs that would have to be addressed. The main point, however, is that a creative commons textbook initiative may not only save students money, it could also give faculty more freedom to customize the content of their courses.

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