Why you have to wait for ebook best sellers at the library

Have you ever eagerly looked forward to the publication of a new book? If the publisher expects it to be a best-seller, you won’t be alone. Your public library will order as many copies as it thinks it needs to let as many people as possible check it out. But if very many patrons want to read it as an ebook, most of them will likely wind up on a waiting list. What’s the difference?

For one thing, the library can buy dozens of copies of a printed book. A patron checks one out, reads it, and returns it. It can’t buy dozens of copies of an ebook. The publisher has the one master copy. Every transfer of an electronic file creates a new file.

An individual customer can’t easily make a copy of that copy for someone else. But when a library lends an ebook, it puts a new copy on a reading device. At the end of the loan period, that copy disappears.

Logically, it would seem, deleting the digital copy should have the same effect on the publisher as returning a physical book to the library. Publishers don’t see it that way.

Ebooks, copyright law, and Amazon

Ebooks and other digital files differ legally from printed books and other physical objects. Physical books come under the “first sale” principle in copyright law. So do films and physical sound recordings. But first sale doesn’t apply to electronic files.

When someone buys a copyrighted object, the publisher has little interest left in it. The owner can sell it, give it away, or do almost anything without seeking permission. Anything, that is, except make a copy of it to sell. Therefore, when a library buys a printed book, it can lend it without restriction.

According to publishers, the ability to make a new copy of an electronic file and distribute it makes it easy to pirate their intellectual property. So they claim they need to place restrictions on consumers.

Therefore, they do not sell digital copies of books, sound recordings, or video recordings outright.  They require consumers to agree to a licensing agreement as a condition of downloading the files.

Many people suspect that Amazon has driven the wedge between publishers and libraries. It appears to convince publishers that library lending diminishes retail sales. Amazon denies that claim. It does, however, share data with publishers about digital sales and Kindle ebook circulation in libraries.

Since the introduction of Kindle Direct, Amazon has allowed authors to bypass traditional publishers entirely. Self-published ebooks comprise the fastest-growing segment of Kindle sales. Amazon also dictates that the Kindle Direct authors charge between $2.99 and $9.99 for their books.

Publishers can’t sell their books for that amount. Kindle Direct must have a substantial impact on the publishing business, but no one can measure it. Amazon doesn’t share its data about that.

The public may expect a digital file to be less expensive than a physical book. In fact, the cost of paper, shipping, etc., makes up only a small portion of a book’s cost. Such greater costs as editorial expenses, author royalties, and marketing remain the same regardless of format.

Ebook publishers and libraries

Before 2014, several major publishers barred sales of ebooks to libraries entirely. Then they started charging libraries far more than the retail price. Still, the library had access to the book in perpetuity like anyone else. In July 2019, several publishers changed how they charged libraries for ebooks and audiobooks.

Hachette Book Group, Simon & Schuster, Blackstone, Penguin Random House, and others limited library licenses to two years or a certain maximum number of circulations. After that, the library must pay to renew or lose the title. On top of having to pay at least twice the retail price to get an ebook in the first place.

Macmillan went beyond other publishers by imposing a four-month embargo on library licensing.

It sent a letter to its authors announcing a new policy for ebooks made available to libraries. Libraries, it said, accounted for 45% of digital reads for its titles but only 15% of revenue. It further complained that it made less than two dollars per read.

Accordingly, it announced, it would start a new policy beginning November 1. It would make a single copy of each title available to each library system. (Note, that’s library system, not library.) The library would not be able to order more copies until eight weeks after publication.

In practice, the policy meant that the New York Public Library, with all its branches, and a small rural  library with only one branch would both receive only one copy.

As a “concession,” Macmillan would charge only $30 instead of $60 for that one copy. That copy would also be available in perpetuity instead of having to be renewed after two years or 52 lends. Of course, after eight weeks, any other copies would cost libraries $60 each and be subject to renewal.

Unprecedented protest in library land

Libraries and library patrons, of course, protested. Although the ALA has long issued position papers on various issues, it decided that Macmillan needed to hear from non-librarians. It asked the general public to sign a petition in protest.

The petition drive marked the first time the organization sought such tangible input from outside its ranks. ALA didn’t try to explain the minutia of pricing. Instead, the petition concentrated on the inconvenience to patrons of the embargo plan. At last count, it had about 211,000 signatures

Dozens of library systems furthermore decided they would stop buying anything from Macmillan, including printed books. For example, the Charleston County Library in South Carolina announced a boycott to last at least 12 weeks.

Compared with other large publishers, Macmillan has a small market share in ebooks. It runs a great risk if the others don’t pursue the same strategy.

If library patrons can’t get a particular title quickly, they’ll blame the library rather than the publisher. But if libraries refuse to purchase licenses from Macmillan, they still have plenty of titles from other publishers to satisfy a more general demand for something to read.

Macmillan CEO John Sargent met with a delegation from Chief Officers of State Library  Agencies and rebuffed their concerns. He insisted that library lending of new releases hurt publishers’ revenues.

Comparing ebooks to major motion pictures, he said that they have the greatest value within a few weeks of release. Publishers ought to make their greatest return on investment during that time.

If people can borrow an ebook from the library and read it for free, they won’t buy from the publisher. Therefore, he concluded, rising sales to libraries result in declining sales to consumers. He had little or no data for any of his claims.

Libraries and ebook sales

In fact, the typical library loan period is two or three weeks. In any given eight-week period, then, a single copy could not circulate more than two or three times.

When publishers first decided to offer ebooks to libraries, libraries didn’t like the terms but acquiesced in order to get access. They didn’t keep up advocacy to persuade publishers to give them better terms.

Plenty of evidence exists that library lending actually boosts retail sales of ebooks. OverDrive, one service that enables libraries to circulate ebooks sponsors a “Big Library Read” event several times a year. It’s like an electronic book club. Participating libraries encourage patrons to read one selected book during the promotion.

For two weeks in April 2018, the Big Library Read chose Flat Broke with Two Goats by first-time author Jennifer McGaha. Patrons checked it out 130,000 times. Before the event, the book’s Kindle rank was below 200,000. In the two days after the event concluded, it rose to its highest rank, 7,833.

It certainly appears that library patrons contributed to that title’s success. If they didn’t finish it during those two weeks, they had to buy their own copy. Or they liked it so much they bought it as a gift. Or they recommended it to friends, who bought it. Some readers may have found out about it through library marketing and bought it instead of borrowing it.

According to a survey by Library Journal, nearly half of respondents later bought a book they had originally borrowed from the library. More than three-fourths of respondents borrowed from the library and later bought another book by the same author.

Possibilities for the way forward

Now, it’s up to libraries to negotiate with major publishers and persuade them that they need libraries. Sargent has committed to attend major library meetings to present his case, weak as it seems to any non-publisher. As long as the two sides are talking, however, it is possible to come to a meeting of minds.

For example, if a library needs dozens of copies of a best-seller, it won’t need that many after it goes off the best-seller list. Libraries “weed” their collections, which gives them the opportunity to remove excess copies.

By analogy, libraries could buy perpetual licenses for one or two copies. Publishers could require one- or two-year licenses for more copies of high-demand items. Mid-level publishers already seem open to the idea.

If library advocates choose legal challenges to license restrictions, they need to find broader arguments. As it is, a license agreement is a contract. Courts nearly always uphold contracts. In recent years, however, they have begun to make distinctions based on whether licensing restrictions are or are not rooted in copyright law.  Violations of copyright-based restrictions would bring much costlier consequences than more basic contracts.

Since the first sale doctrine came from a 1908 court case and not from Congress, it’s up to the courts to sort out the copyright implications of digital transfer of copyrighted material. And certainly, courts can respond to technological change more nimbly than legislative bodies.

Libraries need to find legal arguments that don’t depend on first sale. Courts have consistently interpreted first sale very narrowly as a physical distribution issue so far.  But the first sale decision itself invalidated a publisher’s interpretation of copyright. Even so, some older precedents may actually be more useful.

The current standoff is unsustainable. Between negation and litigation, the situation will eventually change.

Sources:

As boycotts mount, Macmillan CEO defends library e-book embargo / Andrew Albanese, Publishers Weekly. November 6, 2019
Charleston library temporarily boycotts Macmillan Publishing in response to e-book embargo / Connelly Hardaway, Charleston City Paper. November 26, 2019
Digital firsts / Matt Enis, Library Journal. December 18, 2013
Publishers change ebook and audiobook models: libraries look for answers / Matt Enis, Library Journal. July 17, 2019
Why angry librarians are going to war with publishers over e-books / Heather Schwedel, Slate. Sept 11, 2019

Photo credits:
Library ebook reader. Some rights reserved by Sutherland Shire Libraries
Kindle reader. Public domain from Wikimedia Commons
Circulation desk. Some rights reserved by Newburyport Public Library
Circulation desk. Some rights reserved by Newburyport Public Library
Reading an ebook. Perfecto Capucine from Pixabay
Ebook readers. Some rights reserved by Anita Hart.
Judge’s gavel. Source unknown

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