Copyright clash over textbook rentals
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Challenged: Founders of textbook rental company Zookal. Photo: Nic Walker
A company started two years ago to save students money by renting textbooks says publishers are trying to block the business because they fear the kind of market disruption that has occurred in the US.
The publishers counter-claim the start-up has infringed their copyright.
Zookal was set up in 2011 when chief executive Ahmed Haider, 27, and four fellow students from the University of Technology, Sydney, saw profit potential in renting out textbooks for a semester at half the cost or less of buying them. Many textbooks cost about $100 and students doing a three-year degree spend at least $3000 on them, it is estimated.
After raising $1.5 million in venture capital, Zookal claims to be increasing its revenue by 200 per cent a year and aims to rent out its millionth book within three years.
It has just set up a ”Silicon Valley” style office in Ultimo with hammocks, arcade games and free massages for the seven full-time employees.
Australian Publishers Association chief executive Maree McCaskill said she had notified the APA’s lawyers of alleged copyright breaches by Zookal.
Mr Haider said he was not aware of any breach notifications in the past year ”but if there is any issue we are more than happy to rectify it”. He said the publishers refused to supply the books to Zookal at wholesale prices or did so on terms less favourable than those given to other textbook retailers. These included shipping terms of six weeks instead of 24 hours.
Mr Haider declined to name the managing director of a large publishing company who, he said, told him that ”for us, getting into rental would be like us eating our own children”.
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Leading law and business textbook supplier Thomson Reuters ”outright told us will not supply a textbook renter company at all”, he said.
Thomson Reuters declined to comment.
But APA tertiary convener Paul Petrulis said it was ”not an issue of access”. Mr Petrulis, who is also vice-president of higher education for textbook publisher Cengage Learning Australia, said: ”If a rental company wants to purchase a book, they can purchase it from the [same] channels as other purchasers do.” He said in the small market of Australian textbook publishing, rentals meant lost sales for publishers.
In the US, textbooks are a $7 billion a year industry, dwarfing Australia’s estimated annual textbook revenue, including school texts, of $620 million.
Zookal’s US role model, Chegg, rents textbooks to students on 7000 campuses. To head off the threat from even cheaper e-books, Chegg is evolving into a one-stop student service shop providing everything from course reviews and planners to scholarship help and tutoring.
Zookal is also branching out with a resale hub for individual students’ course notes and a matching service for international student interns and employers.