What the McGraw-Hill, Cengage merger means for textbook prices

The textbook market is already dominated by only five players, and consumer advocates worry further concentration could be bad news for students

Two textbook companies are merging, which could adversely affect options and pricing for students. When Nick Sengstaken arrived at the University of North Carolina a few years ago to start his college career, he wasn’t thinking too much about finances. But money was soon on his mind. “When I came on campus I was a naive first-year who went to the student store, bought a bunch of textbooks and then had a massive bill,” said Sengstaken, who is now finishing up his junior year.

And throughout his college career, he’s been dogged by the high cost of textbooks. Sengstaken was the campaign coordinator at UNC for the college affordability campaign run by U.S. PIRG, a consumer advocacy organization, and has always kept a close eye on student costs.

With the merger of McGraw-Hill and Cengage, two major textbook publishers, experts worry that these college materials will only get pricier. For instance, he needed a textbook, CDs and other products for music major course he was taking. That cost him roughly $500. Sengstaken also remembers paying for codes to access digital course materials in other classes that cost him nearly $300.

Now experts worry the challenges students face in order to pay for course materials are about to get worse. McGraw-Hill and Cengage CNGO, -16.15% two major textbook publishers, announced Wednesday that they would merge, creating the second-largest supplier of textbooks and higher-education materials. Right now, five companies control about 80% of the textbook market and, if the merger is approved by regulators, that number could go down to four.

“The textbook market is already highly concentrated and this just takes it and puts it into fewer hands,” said Nicole Allen, the director of Open Education at the Scholarly Publishing and Academic Resources Coalition (SPARC), which advocates for more open sharing of educational materials. “Students are already captive consumers in this and this would just make it worse.”

Textbook costs have skyrocketed over the past several years — the average price increased 88% between 2006 and 2016, according to the Bureau of Labor Statistics — and some have worried that the relatively high concentration of the market, is partly to blame for those price increases. (Another major factor is that the consumers of the textbooks, students, don’t get any choice in what they need to buy).

https://www.marketwatch.com/story/mcgraw-hill-and-cengage-are-merging-what-that-means-for-college-textbook-prices-2019-05-02

Submitted May 10, 2019 at 11:14PM by thinkB4WeSpeak http://bit.ly/2Vl957q