“Free” Textbooks? Not really.

A particular instance of the general statement that there is no such thing as a free lunch is “There is no such thing as a free textbook.”

This line of thinking was provoked by an article titled “Ads Coming to Textbooks” (thanks to Rohit Malik) which reports that a publisher, Freeload Press, is trying to break into the $6 billion annual US textbook market by offering free PDF downloads of books which have embedded ads.

Ads supported free textbooks make sense only in specific instances and these do not include the particular instance of Indian education.

Ads may reduce the price of a “book” (hardcopy or softcopy) to zero but the cost of production and distribution does not disappear — that cost is paid for by firms through advertising spending. But firms don’t spend on advertizing out of altruism; they do so because they expect the target audience of their ads to buy their products, and through increased sales expect to recoup more than the costs of advertising. So if a population has very low spending ability, firms will not spend on advertising aimed at them. Therefore the belief that “free” textbooks can be made available to very poor students based on ad revenues is patently false.

It is an unfortunate fact of this material world that we live in that nothing can be produced without incurring some costs. These costs have to be ultimately paid for–if not by you, then by someone else, if not now, then some other time. No user of the Internet is unaware of hundreds of free services. We use free search engines daily, for instance. If you were to follow the money, you realise for example, that Google hands out freebies because advertisers expect that the consumers of freebies will spend enough on non-freebies at the checkout counters to make it all worthwhile.

So here is word of advice (free, of course, and therefore worth every penny you pay): if your business model depends on providing free services based on advertising revenues, take a reality check to find out if your users have the ability to pay for the goodies that potential advertisers peddle. Don’t expect BMW to sponser ads on a channel which reaches people who can barely afford a bicycle.

Author: Atanu Dey

Economist.

12 thoughts on ““Free” Textbooks? Not really.”

  1. There are innumerable products that are aimed at the bottom of the pyramid that can take advantage of this medium, also there can be an element of cross subsidy as the textbooks are standardized and can be made available ‘free’ to middle and upper class students as well. For instance if i sold a Re.1 shampoo or soap i could well use this medium to advertise. The bigger issue is the efficacy of allowing advertising that targets youngsters and the standards for the same. Obviously ITC will be more than willing to advertise for tobacco products in the name of social service if allowed to. Point is do i want a tobacco ad in my 5 year old’s social science text book ? BTW i smoke but do i want my daughter to ?

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  4. On looking at the problem from a slightly different angle, it is the content that needs to be disseminated. The printed text book is only a medium or carrier. The key here is a medium that has the lowest energy cost in getting the content to the end user. Lower energy of manufacture and use are the important costs of the system.
    Seems to me that a print on demand kind of solution that marries digital content reproduction with local paper manufacturing and printing can be a possible solution. I suspect that the ‘book miles’ that are added on to the cost because of centralized printing and transportation are a sunstantial portion of the cost. The way i see it, if the facility to print and distribute the textbooks on locally available materials using digital content can be put in place a lot of the costs and the wastage associated with textbooks can be avoided and cost brought down to a few rupees. I am of course assuming that the content will be paid for and made available on Government infrastructure.

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  5. While you argue that advertising in school textbooks might not be viable in India, you have forgotten the effects that it can have on the child reading the book.

    Is it ethical to bombard children with ads at every possible opportunity, specially given that children are particularly vulnerable to influence. Won’t it force the parents to buy their children things that they wouldn’t otherwise buy? Is that a good thing?

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  6. I disagree with you. Some companies might want to place ads as an investment for future sales when the kiddies grow up.

    In fact, a lot of investment in India and China is based on the hopes that five years down the line, people who can afford 30$ products today, will be able to afford premium 200$ products then and it will be advantageous to have brand recall, distribution networks, a reputation of being reliable and end user familiarity with earlier gen products, at that time.

    I dont see why companies will not invest in this kind of advertizing on text books.

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  7. It is true that there is nothing as a free lunch.

    In a democratic country like India, where the inequalities are sharply rising, the
    progressive taxation implemented should bring funds to the coffers of the government.

    Moreover, if textbook are given to the private players, the probablility of the prices reducing are less. The state should enter into public private partnerships.
    It is hard to find good text books that cost less these days. At least the books which are needed for educational purposes should be priced less.

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  8. Dear Atanu,

    I get an impression that NRI participation dominates the discussions on your posts. Their comments are valuable. What bothers me is the relative lack of participation by those in India. I do not know if you have any analysis of your readership (or commenting subset of it) and it matches my above guess. The lack of PC or bandwidth cannot be a reason preventing any educated Indian from participation.

    Sharad

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  9. Pingback: Atanu Dey on India’s Development » “Free” Energy? Not Really — Part 2
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