Are You Missing the Market, Aspen?

Professors are in an uproar over Aspen Publisher’s new rules for textbooks. In short, if you thought you could buy a book and do what you wanted after that (i.e. sell it used), Aspen wants to change that system. Instead of a true, unbundled digital option, it has a system where students buy both a physical textbook and a “lifetime” digital book. Too bad as there is a market opportunity that they might be missing. On the legal doctrine front, Josh Blackman called it out. James Grimmelmann jumped on the bashing. Rebecca Tushnet has poked at the offer too. But where is the market here? Is there a way Aspen could make this shift work well? If so, would authors (i.e., professors with deals with Aspen) like it? And why not use dollars to tell Aspen what to do? Assign a different casebook from a competitor (FYI there is a free one out there, see below). There are some specific issues that illustrate sme of the problems in this space.

First, what about time and artificial editions? Rebecca nails this point by calling out that some areas of law (e.g., IP) change so fast that new editions and coverage issues make staying up with casebooks a problem. In those areas, does first sale do much work? Maybe it does much work in the few years between editions. But after that, the text is somewhat obsolete. Dusting of an IP text in digital or hardcopy from the 1990s would be dangerous except for fundamentals (and maybe even for those). Still, there are now seven editions for the Dukeminier casebook. Are the updates every four or so years needed? Even in other areas, are authors updating to add value or to create a new text that undercuts the used market? Do publishers lean on authors to issue new editions when there is not much to say as a market window or version control? If so, the publisher is setting up the demand for secondary or alternate markets that cut out the publisher.

So is this system functioning? As I noted before, the OpenStax system offers high quality texts for free and in a modular way. That means sections are updated for free and folks can assemble material as they wish. Law does not have that yet. The folks at Semaphore Press are close however. That press happens to publish a property text by Steve Semeraro (disclosure I am friends with the folks at Semaphore and introduced them to Steve). It is not quite OpenStax, but it is an interesting model with a shareware feel.

Second, what about the cost to write and update a text? I know it takes tons of time. Whether RA’s do some work or it is all by the professors, the time to write a good casebook is real. I am grateful for the good books. A great teacher’s manual is also a huge help. For new teachers and even experienced, a rich manual provides insights about how the author(s) teach the material and where they see the comments to be headed. One can then choose to follow that lead or modify. But is the price point for texts (as many noted often close to $200) sustainable? Would the market collapse if the cost dropped to low or no charge? OpenStax indicates that the system could shift, and a small crowd of experts would be able to offer an excellent, up-to-date text. And as Pam Samuelson and many others have noted, scholarly works pay off in reputation. So having the most assigned text (or specific chapter on a subject) may stimulate just enough competition for reputation to get great texts (or chapters) but not a glut of roughly the same material from many high-priced publishers.

Third, what about that market opportunity? Would a publisher that offered A) a true digital copy for $40, $50, or even a $100 take share from others? B) What if the publisher said rent the hard copy for a reduced price (again it should be low)? Some might hate that idea as a matter of doctrine but that market is emerging on Amazon and at least lets the student know what is going on (though I think a rental model poses some issues for libraries in that no one should say that libraries should just be rental depots that is another debate for another time).

So Apsen, if you’d like to survive I am betting your authors would like that too. But I am also betting they want to work with you to offer much better solutions than the ones you have right now. The life time digital edition and the high price insult the authors and the marketplace. I think others will find ways to route around you. But you could take your current position and parlay it for the future. If not, I think you may have pushed the law text market to Semaphore or OpenStax. Hmm, maybe Aspen should stay with its model after all.

What Is Internet Use?

What is Internet use? The answer: It depends and it might matter. Pew has some ongoing work about the demographics of Internet use. The classic term is digital divide. A few things pop out here. Is Internet synonymous with the Web? With broadband? Are things shifting such that whether one is on a computer or phone matters? Think HTML 5 here and the dream of program once for a range of devices. According to Pew:

African Americans have long been less likely than whites to use the internet and to have high speed broadband access at home, and that continues to be the case. Today, African Americans trail whites by seven percentage points when it comes to overall internet use (87% of whites and 80% of blacks are internet users), and by twelve percentage points when it comes to home broadband adoption (74% of whites and 62% of blacks have some sort of broadband connection at home). At the same time, blacks and whites are on more equal footing when it comes to other types of access, especially on mobile platforms.

Pew draws a distinction between Internet and cell use. That may not be wise, although it may capture some differences. More and more folks hop onto a phone or tablet (or excuse me while I gag on the word “phablet”) to access the Internet. Cellular companies are shifting to data plans more than calling and texts. Why? Folks are using mobile devices to get on the Internet.

Of course it matters that any group is not accessing, or is not able to access, information. HTML 5 seems to be doing well, but a developer I met said that native (as in designed for a particular device) still matters for high quality interaction and offerings (such as apps for a service). Perhaps the most heartening finding was “Overall, 72% of all African Americans—and 98% of those between the ages of 18 and 29—have either a broadband connection or a smartphone.” But there is a hidden cost.

As Paul DiMaggio noted some time back TV was expensive in that one might pay it off over a few years, but it kept delivering well after that cost. The upside to cable, the Internet, and more is less centralized control. The downside is continual payment to access information. Even if one uses only a smartphone for information, the annual cost is hundreds of dollars. Throw in cable and the cost goes up.

Although some heads will explode, I must ask whether a public data system would be the sort of infrastructure that unleashes all sorts of good outcomes. Yet as I write these words, I know that the upkeep of networks, bandwidth problems, and other issues plague such a dream. Then again, the slowness of current networks and the numbers of people unable to be online suggest the market is not doing as well as it could.

Public Domain? We ain’t got no Public Domain. We don’t need no Public Domain! I don’t have to show you any stinkin’ Public Domain!

With apologies to B. Traven and John Huston, I note that Duke’s Center for the Public Domain has a nice post about what might have been in the public domain. In my paper The Life and Death of Copyright, I go over how a few authors rallied with American interests to extend copyright term. I also show that no matter which of the main theories one looks to for IP, none supports copyright after death. None.

In other words, folks who usually disagree about all sorts of nuances in copyright, (It’s labor! It’s the personhood! It’s utilitarian!) converge on, or at least have no good support for copyright after death. Paul Heald’s work shows that the dreaded under-production myth is just that, a myth. Aram Sinnreich’s The Piracy Crusade just came out and gets into the problems with locking up work. I’ve just started it, but his run through history, sociology, and more looks to be a great addition to the literature in this space.

So it’s a new year. Old fights are with us. New ones will come. The sun also rises. Time for naked lunch.

(Note: Burroughs claimed the phrase, Naked Lunch, meant a “frozen moment when everyone sees what is on the end of every fork.” or the truth albeit ugly).

Score One for the Commons (or maybe not)

I was just listening to Dave Levine’s interview of Mike Madison, which touched on his work with Strandburg and Frischmann on cultural commons. Here’s one more possible case study for the group, suggested by Michael Lewis via Felix Salmon:

[T]here are smart [high frequency trading] HFT shops, and then there’s Goldman Sachs. The smart shops execute their strategies using lightweight, open-source, flexible code. Goldman, by contrast, considers its enormous, clunky, proprietary codebase to be a source of competitive advantage — it has to, in order to justify the bonuses it gives to the people in charge of that codebase. Goldman knew that Aleynikov was its best programmer, but it never really grokked why he was good: he was an expert at replacing clunky Goldman code with much simpler and more elegant open-source solutions.

So while Aleynikov thought he was streamlining Goldman’s technology, Aleynikov’s bosses got million-dollar bonuses by claiming that he was adding to a proprietary codebase in which they placed enormous value. And when Aleynikov thought that he was simply emailing his own notes to himself, Goldman decided that he was stealing proprietary information of enormous value — and that, since it was enormously valuable, of course Aleynikov intended to use that code against Goldman in his new job.

Three cheers for open-source! Or maybe 2…or 1. Because the ultimate endeavor here–HFT–is not exactly a boon to the economy. As Wallace Turbeville has demonstrated, “HFT siphons value from the pipeline of capital intermediation, impeding the long-term investments the economy needs for sustained job growth.” I make the case against HFT here; let’s just say that it’s hard to make the case that a queueing rule keyed to thousandths or millionths of a second is any better than one that simply allocates trades that happen to come in at the same hundredth, tenth, or (horrors!) half of a second at random, or in (roughly) equal lots.

When it comes to HFT, Goldman’s hapless effort to propertize a codebase was a great example of the “upside of IP’s downside.” The enterprise itself is socially useless at best, pernicious and destabilizing at worst. Here’s to a decline in the commons in HFT code, and to the megabank bonus games that doomed it at Goldman.