Digital Directions: Rethinking the Monolith
Publishers did not meet this decision with enthusiasm. For some time, U.S. educational publishers have sought opportunities for revenue growth by selling textbooks abroad that are nearly identical to the books sold in the U.S. However, acknowledging realities of local economics, publishers typically sold those books at prices far less than in the U.S. They could afford to do so because the international sales represented purely incremental revenue. The Kirtsaeng decision essentially removes publishers' ability to differentially price for international markets: If they price the foreign sales lower they are exposed to Kirtsaeng-style arbitrage entrepreneurs who will undermine their U.S. pricing. On the other hand, if they price international sales at the same rate as U.S. prices, they will likely lose the international sales. Both paths are unpleasant for them to contemplate.