Library e-books: How book publishers shoot themselves in the foot

There are a number of myths about digital books. One is that e-books help reduce library costs. Not true. In fact libraries receive specially inflated prices, most notably from publishers known as the Big Five.

As patrons most of us are in the dark about the extravagant costs libraries sustain to provide e-books for our education and/or reading pleasure. Publishers charge libraries much more for an e-book than what we pay as individuals. For a book you and I can buy on Amazon for $6.99, publishers may charge libraries an inflated price of $75.

The arrangement for e-book titles that publishers have with libraries is a convoluted ‘rent-a-book, but never own it’ model. More like a lease than a purchase, libraries are licensed to keep the e-book only for a limited number of checkouts determined by the publisher. One e-book per reader. No multiple or consecutive checkouts.

Rent, read, repeat.

Who else—besides librarians—would put up with this?

Publishers are in business to make—and should make—a profit. But so far large publishing companies seem to resent dealing with libraries; determined to penalize them with pricing models that come with too many strings attached.

It’s the library concept that corporate publishers don’t get. When businesses buy items to give away, it’s usually a promotional gadget. But library books are not a promotional giveaway intended to sell something more pricey. The bottom line for libraries is something you can’t put a price tag on.

Publishers’ myopically view libraries as the competition. Before Brian Napack stepped down as president of Macmillan, he said “the fear is that someone who gets a library card will ‘never have to buy a book again’”.

Meeting with a group of librarians swapping tales of e-lending woe, Phil Bradley, then president of the Chartered Institute of Library and Information Professionals, made this bold statement: “In publishers’ eyes librarians are ‘sitting close to Satan’”. Source:Economist article, Folding Shelves 

Instead of over-inflated prices, restrictive licensing and unavailability of the latest best sellers, what if publishers adopted the concept of seeing the library’s ‘free’ e-books as a promotional tool that would eventually gain sales for them? An investment, rather than a loss of revenue.

Not only do public libraries struggle with these issues, college libraries also feel the heat from academic publishers. The Chronicle for Higher Education reports that college libraries recently received word of an outrageous increase of 300% in scholarly e-book pricing.

College libraries order academic books and journals on a short-term basis for a limited number of check-outs. E-books are triggered for full payment after as few as the third checkout. Each short-term loan is charged a percentage of the full price.

Susan Stearns, Executive Director of the Boston Library Consortium, states in a letter of protest titled, “Ebook Pricing Hikes Amount to Price-Gouging”. “These newly announced price increases, amounting to several hundred percent in some cases, are levied on short-term uses, and this regressive pricing model is being adopted by the publishers whose ebooks are already among the most expensive in the scholarly market.” 

While Ms. Stearns acknowledges that publishers need to ensure that they have a sustainable revenue stream…“this move looked like an experiment in predatory pricing, designed to make the most of rising demand, but without justification in terms of either production cost or use value.”

This business-to-library model is supposed to be Big Five publishers answer to Inter-library e-book loans, a forbidden transaction for libraries. So publishers let libraries ‘road test’ a book, but they maintain full control, collecting revenue with each checkout.

With print books publishers have no control over what happens after libraries purchase them because they own them completely. Inter-library loans—which date back to 1894 when a librarian at UC Berkeley implemented this system—must be a terrible thorn in a publisher’s side.

In the hard copy world, there’s no additional revenue stream when a book is checked out. With e-books publishers chip off a piece for themselves whenever the book changes hands.

In March 2014, the Oberlin Group, a consortium of 80 liberal-arts colleges, published a statement calling for an end to “restrictive licensing agreements” that prevent e-books from being shared among libraries the way hard copies pass through Interlibrary Loans. The statement, signed by Mr. Geffert and 65 other academic librarians, called the current model of e-book exchange an “existential threat” to the “ecosystem of sharing.” Source:College Libraries Push Back as Publishers Raise Some E-Book Prices

As they transition from print books to electronic delivery, college library e-book prices are inexplicably sky-rocketing.

From A gamble on e-book pricing, the author uses as an example, The World’s Major Languages, an expensive e-book title in the University of Denver’s library collection. “You can buy it on Amazon for under $75.00. But the university, who orders e-books on short term loans spent $69 for the three times it was check out by students. The fourth time there is a trigger which causes the library to purchase the title for an additional $345.00.”

It gets worse.

“…that was under a previous pricing model, in which the university paid 6.6 percent of the purchase price for each short-term loan. That number later jumped to 10 percent, and eventually, after the most recent revision, to 25 percent.”

Because of this latest price hike, Orbis Cascade Alliance, a collective of 37 libraries in the Pacific Northwest, will have to remove about 5,000 titles from its pool of 18,500 e-books in order to accommodate the changes.

Because college libraries have fixed budgets already in place for next year, many of them will be forced to remove e-book offerings. The bottom line for students is that they won’t have access to as many books next year.

As students and library patrons we are affected by publishers problematic business models in ways we may not notice. Because we often don’t notice what we can’t see. Until it’s too late. And that’s the real tragedy.

The hard questions:

  • Are publishers shooting themselves in the foot by making e-book titles ridiculously expensive for libraries?
  • Or worse: Are publishers relying on the trend to bookless libraries, especially in colleges and universities, knowing they have an increasingly captive audience?
  • And why are libraries still considering the bookless model?

What are your thoughts?