Weekend #hcod & #ebookrights

This article from the Wall Street Journal:

Some publishers, which are monitoring the sites closely, say they fear that making books available for loan may deter people from buying physical and digital books.

Despite an American Library Association study to the contrary, publishers believe that lending books represents a lost sale. But when you have quotes like these:

ebook sales in general are rapidly gaining on print sales. Forrester Research reports that ebook sales in the United States hit $966 million in 2010, up from $301 million the year before.

In Canada, HarperCollins says it’s seen a 500 per cent increase in ebook sales since 2009, while Random House Canada has seen a 400-percent jump. (The Province)

It’s not hard to see why they make statements like this:

We have serious concerns that our previous e-book policy, selling e-books to libraries in perpetuity, if left unchanged, would undermine the emerging e-book eco-system, hurt the growing e-book channel, place additional pressure on physical bookstores, and in the end lead to a decrease in book sales and royalties paid to authors.

Right. I have yet to see a study or statistic which proves their last point that lending (library or otherwise) leads to less buying. My understanding is that reading leads to more reading, especially when there is a favorite author involved. As evidence I offer my anecdotal experience in lending out Game of Thrones to people and seeing a number of them buy it for themselves or the sequels.

Eric Hellman has a theory about why HarperCollins put limitations on their eBook sales:

[..] HarperCollins has played a neat trick. By focusing our attention on the books that are lent many times, supposedly shortchanging the publisher and the author, HarperCollins has gotten us to overlook the 80% of books that don’t circulate much at all. Libraries pay full price for those, too, and it’s pretty clear that publishers make infinitely more money on books that don’t circulate in libraries than on books that don’t sell in bookstores!

On balance, the economic effect of libraries, in addition to those I’ve discussed before, is to shift money from very popular books to those that are less popular. It can be argued that libraries support a breadth of culture that would go away without their support. Guess who publishes those very popular books? The Big 6 publishers, of course. They pay the big advances to authors, the big coop advertising fees to bookstores, they get their authors on talk shows and their books reviewed in the Times. That takes a lot of money, but the expenditure is richly rewarded by a "vital few" or "smash hit" economy.

So here’s the cunning. By focusing on popularity-driven revenue mechanisms, HarperCollins is pushing money towards the smash hits and away from the long tail. Libraries may be adversely affected, but they’re collateral damage. It’s the long tail publishers that HarperCollins is trying to destroy.

Read his whole post. While the math makes my eyes cross (it’s not him, it’s me), I can understand the point that he is getting at. That when you have a limited budget and must consider re-buys of a popular license, you’re going to divert it away from the eBooks that do not circulate as well. That Janet Evanovich eBook will have a high enough demand to warrant a re-buy (at a lower price point: “If a library decides to repurchase an e-book later in the book’s life, the price will be significantly lower as it will be pegged to a paperback price point.”) while the midlist authors that don’t get the same demand may get squeezed out by collection development money headed towards Janet.

That makes sense to me. Personally I hope it’s not the real reason although my cynical side was doing a jig while I read it. We’ll just see how it plays out.

2 thoughts on “Weekend #hcod & #ebookrights

  1. How many hundreds of authors does Harper Collins represent? They have a long tail themselves, and I have a hard time believing they would want to sabotage it. I don’t think it’s a cunning plan on their part (much as I loved the Baldrick reference), just desperation and short-sightedness.

    In this conversation between publishers and libraries, libraries have taken a stance that “renting” books is not something we do. We prefer to own and retain the rights of first sale. However, we do lease other sorts of information every time we pay for database access. As soon as we quit paying for access, those sources go away. So there is precedent… successful precendent that libraries are prepared to live with.

    So why don’t publishers try to model ebook lending after other informational databases? Publishers could create yearly subscription package deals for libraries – preset collections of books, including upcoming bestsellers, popular titles, past titles by popular authors, and books by authors for which the publisher is trying to develop a following. There could be different size collections with different price tags. There might be pricing allowances for small libraries or pricing premiums for libraries with high circulation rates. There could be pricing for consortia. Publishers could even embargo new bestsellers for one month to allow them to capture some of the high-demand sales.

    Libraries, in this exchange, would get a lot more titles for the money they spend, but some of the titles could be ones that they might not have chosen if they were paying by the book. Some of the titles may circulate less than 26 times a year, but if the library sets a one-week circulation period for bestsellers, or only allows one or two checkouts at a time, books will hopefully be “returned” sooner than two weeks, allowing some books to circulate more than 26 times (it is my understanding that some ereaders allow early “returns” and others do not). Periodically, when the publisher refreshed the database, some titles would fall away and new ones would be added, which would be a bonus for your patrons (though a bit of extra work for your cataloger).

    The pricing would be whatever the market would bear. Libraries would need to calculate about how many circulations they would expect to get and how much they are willing to pay per circulation to determine if the package is a good use of their resources. If your library spends $150,000/year on print materials and has 600,000 checkouts, you normally pay 25c per checkout. The libraries in my area range between 25c and 45c (2009 statistics). Ebook checkouts might be worth a little more than that, as you are saved the time and material costs for acquisition, processing, shelving, maintenance, and weeding.

    This won’t work for small publishers, but it could provide a reliable income stream for the big 6 if they don’t overprice, and an easy way for libraries to get a quick start on a collection.

  2. An even simpler model for publishers would be the audio book model. Many audio book publishers offer a regular price and a library price. The regular price gets you an unprocessed audio book. The library price gets you the audio book in a lovely clamshell with eternal replacements for anything that breaks or goes missing.

    Publishers could sell 26-checkout ebooks for $15 and eternal ebooks for $45. Once libraries have a lot of patrons using their ebooks, they would likely buy one eternal copy and several limited use copies of bestsellers. Less popular authors might warrant a limited checkout purchase, while books in a series might warrant the eternal copy.

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