E-reading is on the rise, according to a January report by the Pew Internet project. Fully 50 percent of adults own a tablet or e-reader, and two out of five public libraries lend e-readers. But while libraries own their e-readers, the same can’t be said of the digital books on their virtual shelves. As a result, library patrons face long wait times to borrow what are essentially collections of bits and bytes.
Most local libraries purchase licensing agreements to e-books through a distributor. The purchasing agreements typically stipulate a time frame or number of uses. For example, a book may only be loaned out 26 times or for one year before it disappears from the library’s catalog. Often, the prices for these books are unreasonably high, according to James LaRue, CEO of LaRue Associates and former director of the Douglas County Library outside of Denver, Colo.
For a new bestseller, “You can buy [the print edition] as a consumer for $12.99, you can buy it for $9.99 as an e-book, but [publishers] are charging libraries for $84 for that book and only one person can use it at a time,” said LaRue.
For consumers, the hidden relationship between library and publisher is having a direct impact on access to materials. Avid reader Hilary Kennedy uses her local Washington, D.C. library to borrow e-books. “The wait list [for e-books] is ridiculously frustrating, because often the queue is 142 people long. It doesn’t make sense, because it’s a virtual book and the technology is there to distribute it to everyone,” she said. Moreover, it’s “aggravating when the library doesn’t have the e-book at all,” she said.
The solution might seem intuitive, but the issue is hardly straightforward, says Barbara Stripling, president of the American Library Association (ALA), which promotes libraries and the librarian profession. “If we want to make an e-book available to multiple users, we need to buy multiple licenses.” Stripling says that the public doesn’t understand the paradigm shift from print to digital books. “They understood when it was a print book and they had to be on a waiting list. They don’t understand an e-book waiting list,” she said.
The waiting list – and the pricing model – stem from publishing house fears that freely and frequently loaned e-books will zap consumer demand to purchase books. Traditional library lending required the physical presence of the borrower, said Andi Sporkin, the vice president of communications for the Association of American Publishers (AAP), the publishing industry’s trade association. Digital lending removes that access barrier. “If you play out the scenario to the extreme, a library with an unlimited arrangement with an e-format book would be able to provide it to anyone, multiple copies at a time, and not require anyone to physically check it out,” Sporkin said.
Sporkin says that the disruption to traditional lending “requires new rules and new structure to ensure that the people who created that book are fairly compensated.”
It appears that the e-book industry is thriving, despite concerns about libraries’ digital collections. According to AAP statistics released in early April, adult e-book sales accounted for $1.3 billion in revenue in 2013. Moreover, a 2012 Pew study found that 61% of e-book readers prefer to buy copies of their books, compared to 54% of print readers.
LaRue says the publishing industry holds the “mistaken belief that we are stealing sales.” Instead, he says the big publishers are pushing the industry towards smaller, independent publishers and self-published authors. Libraries that sidestep distributors increasingly have deals with the smaller and self-published authors, he said. The pricing model used by big publishers is creating the unintended consequence of libraries “moving upstream and getting a lot closer to the content creators,” said LaRue.
Seeds of discontent
In 2010, when e-reading began to increase in popularity, a war was brewing between publishers and libraries over the new format. Libraries wanted easier and cheaper access to e-books, while publishers were concerned over distribution, piracy, and pricing models.
Today, the big five publishers – Penguin Random House, Simon & Schuster, McMillan, Hachette, and HarperCollins – now provide e-books to libraries through licensing agreements, a stark change from a few years ago when only two of the then-six publishers had deals with public libraries. Still, the sales model for e-books is fundamentally different than that for printed books: the library doesn’t own the digital content.
According to AAP, the industry was demonized for not dealing with the libraries in a more unified front. “There was this conventional wisdom that publishers en masse should come up with a universal way to work with community libraries to be able to create a single e-lending model,” said Sporkin. She cites antitrust law, which prohibits publishers to agree upon industry-wide pricing, as a roadblock.
Still, libraries were often cut out of the game entirely, with the large publishers either not selling to libraries or pricing libraries out of the market, says Stripling. “The situation at that point was that none of the big six publishers were allowing libraries to buy at fair price,” she said.
Disrupting the balance of power
Technological changes are challenging the existing power structure, says LaRue, but that isn’t a reason for publishers to be wary of libraries. “Every single study found [that] if you are a power library user, you come more than once a month, you buy one e-book for every two you borrow,” he said.
Stripling pointed to the important role libraries have in helping readers discover new authors, and the risk libraries take by purchasing new titles. Some books have local readers lining up, while others never get loaned out, she said. But that the library pays for the book regardless, she said.
The past three years have seen higher numbers of e-books sold to libraries, Stripling said. The ALA is making “great strides in making sure our libraries can purchase e-books at a fair price,” she said.
For some, the issue remains far from resolved. The Douglas County Libraries system in Colorado’s latest report on book pricing shows the average price for the top 15 New York Times fiction e-books is $47.30 compared to an average of $13.00 for the same books sold to libraries as print copies. The higher prices are “reducing the purchasing power of libraries, because we can’t buy as many copies,” said LaRue.
While libraries and publishers have arrived at a détente, the issue still impacts the availability of books at local libraries. Higher prices for e-books leave less money for traditional print copies – one copy of an e-book could buy up to nine copies of a print book, according to LaRue – and the purpose of a library is to give readers access to content they want. How agreements ultimately shake out between publishers and libraries will have a significant impact on the number of e-books and print books available in local libraries, as well as on independent publishers who may increasingly eat up market share if they are willing to provide e-books at a lower cost.