The Shatzkin Files

More thoughts on libraries and ebook lending

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On Thursday of this week, I’ll be at the Charleston Conference appearing in a conversation organized by Anthony Watkinson that includes me and Peter Brantley. Brantley and Watkinson both have extensive backgrounds in the library and academic worlds, which are the milieux of most attendees at this conference. I don’t. I am being brought in as a representative of the trade publishing community. Watkinson believes that “the changes in the consumer area will break through into academic publishing and librarianship.” I am not so sure of that.

I am imagining that what creates interest, and concern, among all librarians about trade publishing has been the well-publicized tentativeness of trade publishers to serve the public libraries with ebooks in the relaxed and unconcerned manner with which they have historically been happy to sell them printed books. Big publishers have expressed their discomfort with ebook library lending in a variety of ways. Macmillan and Simon & Schuster, up to this writing, have declined to make ebooks available to libraries at all. HarperCollins instituted a 26-loan limit for ebooks with libraries a little over a year ago. They received apparently widespread — certainly loud — criticism when they announced the policy, but it seems now to have been accepted. Penguin and Hachette delivered ebooks for lending and then stopped. Now both are putting toes back in the water with experiments. And Random House raised their prices substantially for ebooks delivered to libraries for lending.

So, six for six, the major publishers have struggled publicly to establish a policy for ebook availability in libraries.

The concern, as I’m sure my conversation-mate Peter Brantley will point out, extends to what rights libraries have when they obtain ebooks. I’ve expressed my belief before that all ebook transactions are actually use-licenses for a transfer of computer code, not “sales” in the sense that we buy physical books. When Random House declared the opposite in the last fortnight — that they believed they sold their ebooks to libraries — it only took Brantley a wee bit of investigation to find that Random House’s definition of “sale” didn’t line up with his.

Of course, his doesn’t line up with mine. I believe (he’ll correct me on stage in Charleston, if not in the comments section here, if I’m wrong) Brantley accepts the one-file-transferred, one-loan-at-a-time limitation that has been part of the standard terms for libraries since OverDrive pioneered this distribution over a decade ago. That control enabled ebook practices to imitate print practices (except for the “books wear out” part, which Harper was addressing with its cap on loans). Without it, one ebook file transfer would be all that a library — or worse, a library system — would need of any ebook to satisfy any level of demand. The acceptance on all sides of that limitation says clearly to me, without resort to any other information or logic, that there is an agreement — a license — that the library recipient of an ebook file accepts in order to obtain it.

People who spend a lot of time with libraries and library patrons are quite certain that the patrons who borrow books and ebooks often also buy books and ebooks. (Library Journal offers patron data that supports that idea.) Although library services are many-faceted and not primarily designed to serve as marketing arms for publishers, the libraries themselves see the ways in which they aid discovery by their patrons.

And they also see the patrons that couldn’t afford to buy the books or ebooks they borrow and therefore wouldn’t and couldn’t read them if they weren’t available in the library. Since these patrons become part of a book’s word-of-mouth network by virtue of being able to read it, it looks like this behavior by publishers is not only anti-poor and anti-public, but also counter to the interests of the author and the publisher itself. (In fact, most publishers acknowledge the importance of libraries to the viability and marketing of the midlist although that, until very recently, was adequately addressed with print alone.)

And, the libraries point out, the one-book, one-loan limitation means that all the hot books have long waiting lists anyway, so many patrons just cut to the chase and buy the ebook rather than wait. (In fact, schemes by which the libraries themselves can sell the ebook are beginning to develop as well.)

The view from the publishers’ perspective (and, it is important to add, from the perspective of the agents of many highly-compensated authors, who have enormous influence over publishers’ thinking) is quite different. Libraries, which can be the core market for many books published by academic and professional publishers, are more likely to be around 10 percent or less of an adult trade book’s sale. So the risk-reward calculation starts with a sharp limitation on what is the expected “reward”.

The risks are harder to quantify because they are much more complicated than just trying to figure out how many of the loans of an ebook licensed to a library cost the publisher a sale of that ebook through retail channels.

The big publishers are acutely aware that the ecosystem of bookstores they’ve depended on for a century is giving way to something new, which appears to be a mix of retail ebook platforms, community book information sites like GoodReads, author-based marketing, and, of course, publisher efforts to reach potential book buyers through community- and list-building, SEO, and collaboration with other websites.

Consumers will, of necessity, be changing their shopping habits as they migrate from reading print books to reading ebooks. Right now, as ex-Random House marketer Peter McCarthy points out, the key decision is which retailing platform they use. If you buy a Kindle, NOOK, Apple, or Kobo device, you’d be inclined to buy from their platform. It would definitely be easiest and on a Kindle, Nook, or Kobo device, it is really the only practical choice.

But on an Apple device or a tablet computer (or a laptop or desktop, for that matter, although fewer and fewer people will read ebooks on them), the consumer is actually free to use any of the ecosytem apps and, if they want to, choose by price. McCarthy makes the case that doing that on a title-by-title basis will become increasingly unusual. He’s probably right.

But we’re nowhere near the final stage of ebook development. It is going to get easier and it is going to become more widespread. Ultimately what concerns publishers is a vast reservoir of ebook content available on one website (your local library’s, or even a not-so-local library’s) for free while the merchants are trying to make you pay. That’s why such programs as KOLL (Kindle Owners Lending Library) have not gained favor with big publishers.

It really isn’t hard to imagine that in a pretty short time, libraries and KOLL (and some fledglings like the recently-announced “maybe we’re the Spotify of ebooks, or maybe we’re not” Oyster subscription service or Spain-based 24 Symbols) have robust selections available for free (libraries), as part of a broader offering (KOLL), or for very cheap (Oyster’s and 24 Symbols’ aspiration). If that happened, how many customers could be drawn away from the ebook retailer sites and effectively removed from the market for title-by-title purchasing of new books?

How many? Well, we don’t know how many. That’s precisely the concern.

Another thing we really don’t know is what is the future of public libraries. As the relative utility of a building full of printed books declines, libraries correctly point out that they serve many other functions. One that is often cited today, but which I think will be more dated than the printed books aggregation ten years from now, is that libraries provide hardware and Internet access for people who otherwise wouldn’t have it. As devices and bandwidth get cheaper, and the social and commercial benefit of having everybody connected grow and become universally acknowledged and appreciated, that deficiency is likely to be cured by other means.

What is an ongoing need that is not likely to go away is the need for librarianship. The more sources of information there are and the more sophisticated people become about demanding the right information for any task or need, the more that professional help navigating the choices has value. But how will that help be delivered? Online, I reckon, not in a building that you go to and seek out the help. I don’t know the business model yet, but I do know that communities are going to be sorely tempted in the years to come to devote the cash they now spend on public libraries with books and computers in them to providing wider access to more materials through the Internet and providing the information experts, the librarians, outside the confines of a building full of the materials. The materials — with a variety of access and payment models — will be virtual and the librarian will help you get what you need at the price you want to pay for access.

And all of that sounds, and seems, a lot like what booksellers do today (except a lot more complicated).

Which brings us back to publishers and their concerns. Right now, the biggest publishers’ biggest worry is that they will end up in a world where Amazon is the only path to a majority of their potential customers. (Right now, for trade publishers, that number is probably more like 20-30 percent.) That’s why three of the biggest publishers (one being Penguin, so ultimately, this could involve Random House as well) are continuing to struggle to launch Bookish, a strategy that looks increasingly dubious to me. It is why they were so eager to help Apple launch the iBookstore and why they root from the sidelines for NOOK and Kobo and Google to be successful competitors.

Anything that takes business away from the ebook retailing network might be depriving one of Amazon’s competitors of the oxygen they need to compete. (That’s one of the reasons Bookish is looking like a bad idea.) But, more important, with the Internet now making it pretty easy to deliver a selection of reading material larger than anybody will ever plow through at rock-bottom prices, having libraries offer and promote free ebook availability could foster habits that will cost authors and publishers customers in the future.

Of course, all of this is speculative. The library community’s belief that making ebooks available through them will stimulate sales of those books is speculative. But so is the fear of the commercial authors and publishers that libraries in the digital age will have a significantly different impact on reading and purchasing habits than they did for print.

When the problem is lack of information, one of the best antidotes is to enable flexibility and experimentation. That’s why I’m very pleased to be working with Recorded Books on a new ebooks-for-libraries program that will give publishers enormous flexibility in how they structure the license for each book: with granular, title-by-title control of availability, price, a number of loan limit, or a time limit. This requires RB to also give libraries the information and dashboards necessary to manage their ebook collections in ways their print book collections never required. The flexibility will mean that publishers can experiment with a variety of models. The multiplicity of models will be a nuisance for libraries — although RB can do a lot to mitigate it — but it will make a lot more ebook titles available by giving each publisher the ability to control the risks as they see fit. Recorded Books expects to put the program in beta early in 2013 and roll it out by Q3.

It is my hope and belief that the various models offered and the libraries’ reaction to them (agreeing to the licenses or not) will lead to some consensus-forming around particular formulas for these deals. Of course, everything is temporary because everything is changing. And that will continue to be true for quite some time.

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  • Michael Starks

    Publishers will not think of public libraries as a significant force in the market as long as libraries continue to buy books (and license ebooks) as individual customers or in small consortia. Public libraries need new leverage with publishers if the libraries are going to be able to lend popular ebooks to patrons who cannot or will not buy ebooks for themselves. That leverage will come from consolidating libraries’ acquisition of ebooks on a larger scale, such as at the state level, and from tying the libraries’ purchases or licensing of ebooks to the libraries’ purchases of print books. Then publishers will be more responsive to the critical role that only libraries can play in making all books accessible to all patrons, regardless of the patron’s socio-economic status.

    • There is no doubt that if customers (or suppliers, for that matter) organize, they can drive better terms. I am not knowledgeable enough about libraries to know whether they are likely to do such a thing. And I certainly don’t know what combinations are seen by governments as being “in restraint of trade”.


    • Max Alexander

      Here in Maine, library ebooks are bought at the state level. If you have a library card for any town, you have access to the statewide ebook selection (and the privilege of waiting weeks, maybe months, on a waiting list!). I’ve pointed this out before, but I often discover new authors through library ebooks (which I would not have bought on my own), then gone on to buy other books by the same author. So for what it’s worth, my anecdotal experience is that ebook lending does drive book sales.

      • So, Max, if your experience were the guide (and we generalized from it), what it would say is that publishers should list their midlist books with libraries but keep the big authors that everybody already knows about out.

      • Max Alexander

        I didn’t say the authors I take a chance on from the library are ones I’ve never heard of; they might be bestsellers but I’m just not interested enough to pay money. A perfect example is Cheryl Strayed: I have no intention of buying “Wild,” but when it turned up at the library, I got on the (long) waiting list. Who knows? Maybe I’ll love it and want to read more of her work; if so I’ll have to buy them because the Maine library doesn’t have any of her earlier books.

      • I take your point but I’d still stick to my strategy from the publisher POV. You are far more likely to not have tried an obscure author than a famous one. And you — or at least most people — are far more likely to try a book from a famous author than one you’ve never heard of. The tradeoff is in what you *do* borrow from the library. Or what most people borrow. And the branded books tend to get the most action. (That’s why you’re on a long waiting list…)


      • Max Alexander

        Yes, and it’s interesting that two years ago there was no waiting list for any ebook in Maine. Now it’s the norm, although the lists are always longer for fiction and I mostly read non-fiction.

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  • I can’t see that libraries have anything other than a short-term future in eBook lending. The idea of mimicking the arrangement for print books is like the old idea of designing autos as horseless carriages. Authors will want to be paid each time an eBook is read. They have got used to many people reading without paying, and this will continue through eBook piracy. The fate of travel agents provides an illustration of what is likely to happen to libraries. They used to provide a good service, as librarians do, but customers seem to do OK without the service.

    • PUBLIC libraries definitely have a potential disintermediation problem, but I’d be surprised if authors were a principal driver in manifesting it.

    • Michael Starks

      Public libraries are happy to buy ebooks directly from authors. The Douglas County (CO) Public Library System, among others, is doing that today on a fairly large scale. The issue isn’t who’s the supplier but what’s the price. See

      • I really think this is marginal activity. The pool of successful self-published titles isn’t large enough to satisfy much demand, except perhaps in the romance genre.


  • I think authors will influence the outcome for libraries by their progressive switch to self-publishing. Unless publishers take your advice, and pay them more, they are likely to be much happier with the Kindle Lending Library than with public libraries.

    • John, this is just not supported by the facts so far. Publishers are signing just about all the authors they want to sign. Very few are walking away from publishers to go on their own. What you’re talking about may well happen some day. But it isn’t happening now.

      In fact, I believe there are more instances the other way around: authors who achieved some success self-publishing but then moved over to working the old-fashioned way.


  • If they can do it, my advice to authors is to sell the print rights to publishers and retain the digital rights, as JK Rowling did. This is also what I have done for the past 10 years. So far, I have not done anything with the digital rights, because they are illustrated (technical) books. But I live and dream. Meanwhile, the publishers (on the list of the world’s top 50 publishing groups) seem to have forgotten the details of the contracts and are selling a few digital copies. They do this with the same cover price and the same author royalty as the print editions. I can’t see that this is right from any point of view but watch with interest.

    • This is not going to be an option open to most authors. And it will hardly be open at all to authors who want a real advance from a general trade publisher.

      Nice deal if you can get it!


      • I agree!
        Can you tell me whether magazines which rely on illustrations (fashion, home decor, travel, gardening etc) are flourising as electronic publications?

      • Sorry, John. I’m a book guy. You’ve asked a question outside my knowledge zone.


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