Cengage adopts global pricing after Kirtsaeng

A move by academic publisher Cengage Learning to implement a new global pricing structure for higher education textbooks has been  described as a “game-changer” for the industry.

Cengage US has said it will create new international prices for its print products in response to a recent court case involving publisher Wiley and Thai student Supap Kirtsaeng.

Kirtsaeng was sued by Wiley after buying its textbooks at lower local market prices in Asia and selling them back to students in America at a rate below the standard US pricing. In March, the US Supreme Court ruled that the doctrine of first sale, which allows legally acquired copyrighted works to be resold by their owners, applies to works made overseas. This widens the definition of first sale, allowing re-importation of products from lower-priced markets.

A spokesperson for Cengage told The Bookseller the judge’s ruling effectively removed safeguards allowing publishers to price books in international markets to better fit the local economy. As a result, Cengage plans to set a new international pricing structure to “ensure our international and US business models are complementary and will allow us to continue to offer our materials overseas.”

The price structure begins on 31st July and will affect Cengage’s higher education books published between 2012–14. International pricing will be calculated at 75% of US net prices and will impact the UK along with Australia, Asia (including Japan), Europe, the Middle East and Africa, India, Latin America and Puerto Rico.

Cengage said the changes would primarily affect print products. “Most digital versions will still be available at locally-determined prices,” the spokesperson said. “As the education sector transitions to a digital model, we expect this ruling to have less of an impact internationally over time. Where possible, Cengage Learning will also explore the option of creating highly-customised and non-transferable materials for specific regions at local market prices.”

Graham Taylor, formerly of the Publishers Association and now an academic publishing consultant, said the new pricing structure could mean soaring prices for Cengage higher education textbooks in the UK because US prices were higher. “Cengage is protecting its American market first, as a highly profitable one,” he said.

“Cengage are the first to do something about it, but it wouldn’t surprise me if others follow. I think all publishers will be thinking about their pricing strategies because they will all want to defend their core US markets—it is probably just a matter of time.”

Another publisher, who did not want to be named, said Cengage’s move would intensify the debate around the future of territorial rights. “Territoriality will soon be shot to pieces,” the publisher said. “The speed of price change is also a massive sleeping issue. We are working in an industry where we are used to price changes ever year, but Amazon changes the price every day.”

Richard Fisher, m.d. of Cambridge University Press Academic, agreed that the pricing of academic textbooks was an increasing problem. He said: “Within the textbook realm—especially for STM, and what used to be called international sales— [the move] is potentially a game-changing moment. For Cambridge, not primarily a textbook publisher with a formal policy of global pound/dollar parity pricing, the resonance is considerably less. That said, pricing in general is a huge issue for us all right now.”