The tumultuous business of library e-lending

Source: Chicagopubliclibrary.tumblr.com

Last week Hachette announced they would be raising library ebook prices by 220 percent.* Hachette justifies the price increase because it puts no restrictions on the number of times each copy can be loaned. Essentially, the book is more valuable (and should therefore cost more) because it will never deteriorate or need to be replaced.

Hachette has followed suit to Random House, which announced a 300 percent price increase on its library ebooks back in March. Another of the big six, HarperCollins, has taken a different approach: it has instead enforced a 26-loan limit on any HarperCollins title. Penguin Group, on the other hand, is currently working with 3M, the New York Public Library, and the Brooklyn Public Library on a pilot program that delays the sale of its ebooks to libraries by six months from initial publication, and in which pricing is more in line with consumer pricing.

The remaining two big six publishers, Macmillan and Simon & Schuster, do not sell their ebook titles to libraries at all.

So why all this variety? Which lending policy is in the best interests of libraries and their patrons?

If you were to ask librarians, the answer would be none of them. To say that all these differing policies have frustrated librarians is an understatement. Back in January, the executive director of the American Library Association (ALA), Keith Fiels, said of the publishers refusing to sell ebooks to libraries:

“…For a major publisher to make a decision that they will not sell their works to a particular group of individuals, to me, that raises some serious issues. I’m not going to go further than that, other than to say we really need to get this resolved because we don’t want this to be an embarrassment to anyone.”

What Fiels refers to here is the infringement of the library’s ability to purchase books and lend them to its patrons. But some publishers, which have expressed fears that the sale of ebooks to libraries would cannibalize their consumer ebook sales, continue to view libraries as adversaries rather than allies in promoting ebooks. Of course it’s not illegal to refuse to sell its products to libraries, but, as Fiels alludes, surely publishers wouldn’t want to be seen as restricting public access to books, a cherished principle of our democratic society.

What of the preliminary solutions HarperCollins, Hachette, Random House, and Penguin have come up with? It’s still not clear how Penguin’s program will affect the majority of public libraries, though its library partners, the NYPL and BPL, seem enthusiastic about its potential. On the other hand, in a March Publishers Weekly article shortly after the HarperCollins announcement, it was noted that “the revised policy has outraged librarians, who say the new policy will strain budgets and is shortsighted, ignoring the role of libraries in encouraging literacy and building an e-book market for publishers.” Libraries, as with any other business, have to adhere to budgets and make book purchases at specific times of the year. If at another point in the fiscal year an ebook license runs out, with what money will they repurchase the ebook?

There was a similar negative reaction when it came to the Random House price increase. The ALA has not yet commented on the new Hachette pricing policy, but based on its response to Random House, it’s bound to be another angry one. According to ALA President Molly Raphael, as quoted by Digital Book World:

“While I appreciate Random House’s engagement with libraries and its commitment to perpetual access, I am deeply disappointed in the severe escalation in ebook pricing reported [March 2]. Calling on our history together and our hope to satisfy mutual goals moving forward, the American Library Association strongly urges Random House to reconsider its decision. In a time of extreme financial constraint, a major price increase effectively curtails access for many libraries, and especially our communities that are hardest hit economically.”

So what would be the ideal ebook lending policy? According to a report released last month by the ALA, “In this volatile period of experimentation, no single business model will offer the best terms for all libraries or be adopted by all publishers or distributors.” The report does call for three specific ideas that need to be included in any publisher’s ebook policy going forward, however.

First, the publisher must allow libraries to purchase any title that is on sale to general consumers. “…Withholding titles under any terms removes the library’s ability to provide the services its patrons need and expect.”

Second, once an ebook is purchased by a library it should belong to that library forever, without restriction on lending. Limited options for titles could be offered to libraries in exchange for a lower sales price, “but they should have some option that allows for permanent, enduring access.”

And lastly, libraries must be guaranteed the ability to integrate purchased ebooks to their catalogs, which means publishers must provide adequate metadata and management tools for each title. “Separate, stand-alone offerings of ebooks are likely to be marginalized, or to diminish awareness of other library offerings.”

In summary, the ALA concludes:

With today’s rapidly changing business environment for ebooks, the choices that libraries make today can have a profound impact on the direction taken by the entire reading ecosystem. It is thus of utmost importance that these choices be made with careful consideration of the needs of both present and future users. Decisions are best made in the context of an informed community and never in isolation or with passivity.

It’s clear that in the eyes of librarians, the new ebook lending policies instituted by Hachette and others were implemented without first considering the impact of such policies would be on library patrons.

[*Editor’s note 9/18/12: Since the initial Hachette announcement, its ebook distribution service, OverDrive, has corrected the 220% increase with a more modest 104% increase, citing an error in calculation.]