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.