A colleague is trying out the Kindle, which has inevitably made me want one, despite my skepticism. But I’m not sold yet: its browser capabilities have received bad reviews, and the function I would chiefly use an e-book reader for, reading free PDF books, is only available with the $489 Kindle DX. (Yes, I know there are ways to adapt PDF’s for the regular Kindle. I’d like something that doesn’t require a lot of messing around with different file formats.) This has led me to think that I ought just to wait for Apple’s long-rumored tablet computer — an e-reader and iPod touch on steroids.

Some people already have unrealistic expectations of what the Apple tablet might do, however. Consider this post at Gizmodo, which promises the tablet will “redefine newspapers, textbooks, and magazines.” Redefining magazines and newspapers turns out to mean cluttering them up with video, music, and other multimedia detritus. You know when they put the KFC and the Taco Bell and the Pizza Hut together under one roof? That’s how some techies think the tablet should redefine newspapers. So you can watch MTV while you read the New York Times.

Multimedia has its place, but a video isn’t a newspaper and a book isn’t an album. (As an aside, one of the things that really annoys me about multimedia content is how servile it is: watching video content foisted upon you by, say, the New York Times is just as bad as watching television. Text gives the user much more control over his experience than multimedia does, since one can skim the text and read as much or as little, as quickly or as slowly, as one likes.)

Gizmodo thinks that the Apple tablet will redefine textbooks by slashing their costs. College texts in the non-humanities can be astonishingly expensive — $100, $200, even more. If Apple can provide textbooks for a tablet reader through the iTunes store, cutting out printing costs, won’t that bring prices down?

Not really. There are two reasons that textbook prices are so high. The first is that channels of supply are severely constricted: for the most part, the only place you can buy college textbooks is at college bookstores, which don’t have to compete with Barnes and Noble. The Internet has introduced a bit more competition, but supply is not only constrained at the retail level: there are no “substitute goods” for whatever textbook a course demands. You can substitute an earlier edition of a textbooks sometimes, but you can’t go out and buy a competing, cheaper textbook. (Actually, you can, but doing so might make it difficult to do assigned problem sets, for example.)

Those constraints are only half — maybe less — of the problem. The other half or more is that $100 or $200 textbooks are not terribly expensive relative to all the other inflated prices in higher education. If a family is already borrowing and spending $30,000 a year or more just for tuition, what’s another couple of grand? An income or credit line that can handle tuition can afford the textbooks, too. What drives the price of textbooks is not the cost but what consumers are willing to pay. They’re willing to pay hundreds of dollars for textbooks. So why would textbook companies charge anything less?

I expect for a time you will see some discounting of e-textbooks, maybe as much as 25 percent, which is nothing to sneeze at. Lower production costs will indeed allow textbook companies to keep profits high even if prices fall a little, and the online store’s need to claim market share will give the store an incentive to undercut the prices of college bookstores. (Which are already facing tough times in competition with online sellers of physical books.) But selling textbooks for Apple tablets won’t introduce any more competition in the production of textbooks, and it won’t do much to change the willingness of students’ parents to pay for overpriced goods. And over time, as the iTunes store gets a larger market share for the textbooks, Apple and/or the publishers will raise the price, as Apple and the record companies have already raised prices for individual songs from popular recording artists by a whopping 30 percent. (Songs on iTunes used to sell uniformly for 99 cents. Now popular songs sell for $1.29.)

The comparison with music sales is instructive. At $1.29 a song, a 12-song album would be $15.48 and a 14-song album would be $18.06 — the same price range that new CD’s sell for in many retail outlets. The iTunes store isn’t yet charging that much for full albums: most albums still sell for $9.99, even if individual tracks at 99 cents or $1.29 would add up to more than $10. But the market for music is far more diverse and competitive than the market for textbooks, and there’s a much greater range of substitute goods. Moreover, $15 to $18 is already too high a price for, say, the latest Blackeyed Peas opus — CD sales have been falling for a long time as prices have crept upwards. Without competition from iTunes and free file-sharing, record companies would face a great deal of market pressure to lower CD prices. The reason they don’t do so is attributable (at least in part) to the market segmentation that new distribution channels have introduced. CD’s sell to an older demographic: a thirtysomething or fortysomething can afford $20 for the latest Coldplay album. The kids, who have less money to spend, are buying their stuff online.

College bookstores are already uneconomical, and I expect many will disappear over the next decade. And if e-textbooks catch on, there will be many fewer used copies of up-to-date physical textbooks in circulation, which will reduce the competition an e-distributor faces from online sellers of print textbooks. No permanent new competitive pressures will push prices down, and the belief that reductions in the cost of production should translate into savings for consumers is naive — that’s not the way markets work. As long as there aren’t substitute goods and consumers are willing to pay $100 or $200 for a textbook, textbooks will sell for $100 or $200.

(The one wrinkle in this analysis is the availability of DRM-cracked e-textbooks. Universities, textbook publishers, and government will collude to try to head off this threat to profits, but the hassle and bad publicity of cracking down on students — who are, after all, customers to the tune of $30,000 or more a year for the universities — might lead to a truce in which prices decline somewhat or some black markets are tolerated.)

Addendum: Why treat students as consumers at all in an age of e-textbooks? Consider: if a student uses cracked e-textbooks every semester in all his classes, a textbook company might lose (calculating this liberally) $10,000 over four years — probably a good deal less than that. The university, assuming a very conservative annual tuition of $30,000, stands to gain $120,000 from the student (or his parents, or Uncle Sam) over four years. Does it make sense for expel a student for $10,000 worth of e-textbook theft and forgo $120,000 in revenue? Not at all — it would make more sense for the university itself to pay the $10,000 to the textbook company and keep $110,000 in tuition.

The university itself could be the consumer. A professor, department head, or college bureaucrat would look at what textbook is assigned and what the enrollment in the class is, then he would buy that number of textbook licenses. If this money comes out of departmental budgets, the professor or department will have an incentive to assign less expensive textbooks. If the university as a whole bears the cost, professors will assign anything they want.

This will guarantee the textbook companies their revenue, and of course the universities will ultimately pass the cost on to mom, pop, and Uncle Sam, whose loans underwrite price inflation in higher education. Pirating ceases to be an issue. This wouldn’t work with traditional textbooks, where physical depreciation is an issue, and where in any case pirating content is more difficult; it works just fine to leave students directly on the hook. But with e-textbooks, logic points in the direction of having universities license the content directly. It’ll be interesting to see if this plays out.