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Textbooks Are Free, but They Carry Ads

September 05, 2006|Justin Pope | From the Associated Press

Textbook prices are soaring into the hundreds, but in some courses this fall, students won't pay a dime. The catch: Their textbooks will have ads for companies including FedEx Kinko's and Pura Vida Coffee.

Selling ad space keeps newspapers, magazines, websites and television either cheap or free for users. But so far, the model hasn't caught on with college textbooks.

Now, a small Minnesota start-up is trying to shake up the status quo in the $6-billion college textbook industry.

Freeload Press Inc. will offer more than 100 titles this fall -- mostly for business courses -- completely free. After filling out a five-minute survey, students can download the text of the book, which can be stored on a hard drive and printed.

The model faces big obstacles. Freeload doesn't have a roster of well-known authors across a range of subjects, and it lacks the editorial and marketing muscle of the "Big Three" textbook publishers: Thomson Learning, Pearson Education and McGraw-Hill Education.

St. Paul, Minn.-based Freeload's numbers are modest so far: 25,000 users have registered and 50,000 books have been downloaded.

The company said it was rapidly adding titles and would have 250,000 textbooks and study aids in circulation by next year. It also has signed agreements with three small publishers and is in negotiations with others.

What Freeload has going for it is its arrival at a time when textbook publishers are under pressure to moderate prices. A recent government study found that prices had risen at twice the rate of inflation since 1986.

Publishers answer criticism by saying that textbooks are expensive to produce and that they are clobbered by the expanding secondary market for resales in bookstores and online.

The industry is exploring ways to use technology to cut distribution costs and prices. A Canadian subsidiary of McGraw-Hill rolled out an ad-based model but dropped it last year.

Tom Doran, Freeload's chief executive, said McGraw-Hill's experiment failed because it didn't use the ad revenue to reduce prices enough to get students' attention.

As to objections that textbooks shouldn't have ads, Doran said ads already appeared in academic journals. He said Freeload's ads would not be distracting; they would be placed only at natural breaks in the material and wouldn't push products such as alcohol or tobacco.

Schools with other concerns could customize their ads; for instance, Brigham Young University, founded by Mormons, could nix ads for caffeine products.

Ultimately, whether Freeload changes the industry or fades away will probably depend on its ability to attract popular textbook authors.

Fordham University professors Frank Werner and James Stoner had each written several finance textbooks for traditional publishers, but after their latest was dropped by one company, they took it to Freeload.

The professors assigned the Freeload book to their class last year and said it was a hit with students.

"To ask them to go to the bookstore and spend $150 is pretty wasteful," Werner said.

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