There are currently 342 potential borrowers waiting for 197 digital copies of Ronan Farrow’s investigative thriller Catch and Kill at the Los Angeles Public Library.
“It’ll take months for that ebook to become available,” I mutter to myself as I do my usual dance: searching the LAPL’s ebook shelves for titles on my reading list. I place a hold anyway. Then I search for a book that’s no longer the topic of watercooler conversations: Sally Rooney’s Conversations with Friends. Only four borrowers in line for 93 copies. This book was major back in 2017, with dozens of digital copies to prove it, but I’m reaping the benefits of being three years late. I’ll be able to download this book to my Kindle in less than a week, I bet.
But why can only one person borrow one copy of an ebook at a time? Why are the waits so damn interminable? Well, it might not surprise you at all to learn that ebook lending is controversial in certain circles: circles of people who like to make money selling ebooks. Publishers impose rules on libraries that limit how many people can check out an ebook, and for how long a library can even offer that ebook on its shelves, because free, easily available ebooks could potentially damage their bottom lines. Libraries are handcuffed by two-year ebook licenses that cost way more than you and I pay to own an ebook outright forever.
Ebooks could theoretically circulate throughout public library systems forever, preserving books that could otherwise disappear when they go out of print—after all, ebooks can’t get damaged or lost. And multiple library-goers could technically check out one ebook simultaneously if publishers allowed. But the Big Five have contracts in place that limit ebook availability with high prices—much higher than regular folks pay per ebook—and short-term licenses. The publishers don’t walk in and demand librarians hand over the ebooks or pay up, but they do just...disappear.
“You think about Harvard Library or New York Public Library—these big systems that, in addition to lending out stuff for people to use, are also the places where we look to preserve our heritage forever,” said Alan Inouye, the American Library Association’s senior director of public policy and government relations. “You can’t do that if it’s a two-year licence.”
My annoyance at having to wait months for the Catch and Kill ebook to appear on my virtual bookshelf suddenly seems like small potatoes compared to the loss of knowledge that could occur with limited ebook licenses.
Last summer, one of the book world’s Big Five publishers announced a change that will make ebook lines even longer. Macmillan, publisher of recent bestsellers like James Comey’s A Higher Loyalty, decided to embargo new ebooks for eight weeks, preventing libraries from buying more than one copy until two months after a book’s release. The reason behind the embargo, CEO John Sargent said at the time, was that library lending has become so popular that ebook sales are taking a nosedive.
The embargo officially took effect Nov. 1, and now libraries are waiting to see if Macmillan will reverse its decision or if the company’s data will support the move and prompt other publishers to follow suit.
The other top four U.S. publishers—Penguin Random House, Hachette Livre, HarperCollins, and Simon & Schuster—haven’t instituted their own embargoes in the wake of Macmillan’s move. But Amazon’s growing in-house publishing imprint doesn’t allow libraries to lend its ebooks at all, in what Inouye calls a “permanent embargo,” setting the stage for what could become an increasingly tense relationship between publishers and libraries.
“As the year continues, it will become more contentious, regardless of what Macmillan does,” Inouye said. “It’s a smaller part of a larger problem. Amazon has a rapidly growing marketshare in everything it does. Looking toward the future, that’s the real concern.”
To understand why the embargo is such a big deal, you have to understand that checking out an ebook from a library is dramatically different from borrowing a physical book in basically every way. Libraries work with intermediary companies, such as OverDrive (the biggest player), Hoopla, and others, to negotiate ebook licensing contracts with publishers. Instead of buying copies of a book to put into circulation, as libraries do with physical books, they procure licenses through a company like OverDrive. Those licenses last about two years, on average, and cost $US50 ($77)-$US60 ($92) per ebook, according to the ALA. That’s approximately five times the cost of the average ebook on Amazon. Physical books don’t require licenses; libraries buy them outright at volume, so the cost is much lower than $US50 ($77) per book.
“We think the library pricing is egregious,” Inouye said. “It’s unjustified and awful. You as a consumer would pay $US12 ($18) or $US14 ($21) for a bestseller ebook that you would have for the rest of your life. The library buys the same ebook, one user at a time—it’s not like you can copy it indefinitely and hundreds of people can use it. Publishers say because of friction it’s a lot easier to borrow an ebook than a print book because you don’t have the turnover of checking it out and returning it for the next person. We don’t see it that way. Ebooks might be worth a little bit more, but not five times more. That’s crazy—not to mention the two-year limitation.”
Ebook pricing has a fraught history. Amazon once sold most ebooks for $US9.99 ($15), usually taking a loss in order to sell more Kindle ereaders. In 2010, Apple introduced a rival ereader of sorts in the iPad, with a corresponding bookstore, iBooks. Apple convinced publishers to start setting ebook prices at $US14 ($21).99, and asked them to withhold ebooks from Amazon unless the company also raised its prices. The U.S. Department of Justice sued both Apple and the Big Five—then six, until Penguin and Random House merged—for antitrust violations. The tech company and publishers lost in court, but the $US14 ($21).99 list price has remained de rigueur today.
Because only one reader can check out an ebook at a time, and because the cost of licensing an ebook is prohibitively high for libraries to invest in hundreds of copies for every new title, library-goers have become accustomed to long waits to check out ebooks, particularly bestsellers. For publishers, that’s the point. If you have to wait weeks to check out a new ebook, you might just cruise on over to Amazon and pay $US14 ($21).99 to have it delivered immediately to your Kindle or the Kindle app on your phone.
“It is true that in its digital form a book can circulate endlessly, but the friction around this has to do with the fact that in a world where an ebook circulates endlessly, the economics of that don’t return to the publisher or the author,” said NPD BookScan analyst Kristen McLean. “I think there’s a misperception generally that it takes no overhead to make an ebook, but of course there is. You don’t have to print that edition, you don’t have to print the physical book, but all of the overhead that goes into that book is still there. It costs the publisher to acquire it, it costs the author time to write it, all the editorial and all the processing to make that book, all of it is still there. The only thing that isn’t there is the dollars that it takes to actually print the book. That to me is the fundamental friction in this model.”
Ebook sales peaked in 2013 and have since declined, according to NPD data. At the same time, ebook lending through libraries has jumped. OverDrive reported a 15 per cent increase in ebook lending last year, up to 211 million copies checked out across 43,000 schools and libraries worldwide. Los Angeles Public Library is the top library system in the U.S. for ebook lending, with 5.9 million ebooks borrowed in 2019.
But sales of print books have increased even as ebook sales have tapered off in recent years. McLean said the overall effect is a “net zero.”
“I personally don’t believe that circulating a book through the library, whether or digital or print, erodes sales for that book,” McLean said. “Even before ebooks, that was not the case. There are some people who choose to borrow and there’s some people who choose to buy, but over time, when we look at all the numbers, it all always works out to be an almost zero-sum game. I think that there are benefits to people discovering books in the library and then choosing to buy those books or buy the next book by that author.”
Checking out ebooks from your local library has only become easier in recent years, which has contributed to the rise in ebook lending. OverDrive’s Libby app for iOS and Android lets library-goers scour their library system’s inventory for books, check them out, and download them directly to a smartphone or tablet when the books are available. You can also use Libby to sign up for a digital-only library card, or check to see if you’re eligible to sign up for another library system, which makes ebooks more accessible. Basically, you never have to leave your house and still read books for free.
OverDrive CEO Steve Potash is an ebook evangelist, the kind of person who answers the phone by saying, “There’s never a bad day in ebooks.” He gave me a crash course in how to get the most out of Libby and instructions for navigating the ins and outs of my home library system, the Los Angeles Public Library. He even had kind words for publishers, who sometimes make new titles and bestsellers available for people to check out immediately through book club programs and on virtual library shelves labelled, “It’s Your Lucky Day.” (The lucky-day loans last just seven days, but quick readers don’t have to wait in line.)
“Of the thousands of publishers and content creators and aggregators and distributors we work with, the significant majority value, appreciate, and embrace opportunities to promote the availability of their product under more fair and reasonable terms,” Potash told me. “Macmillan got a lot of ink, and it’s unfortunate that they made decisions based on what I think is bad data and legacy thinking.”
Macmillan CEO Sargent told the Wall Street Journal last year that library reads comprised 45 per cent of Macmillan’s overall digital reads in the U.S., effectively “cannibalising” the publisher’s ebook sales. Libraries only make up about 15 per cent of Macmillan’s annual ebook sales, according to the WSJ. Potash rejects that argument, citing OverDrive data from public libraries that shows that 79 per cent of Macmillan ebook titles are removed from library shelves because the 2-year licence expired before the ebook copy was checked out 52 times, as per Macmillan’s licensing agreement with OverDrive. (It’s also difficult to determine whether someone who has checked out a book has actually read it.)
There are no third-party studies that support or reject Macmillan’s assertions that library ebook lending depresses ebook sales, though OverDrive is one of the funders of a group called the Panorama Project, which is in the process of studying library lending’s effects on ebook sales. The American Library Association doesn’t collect any data around ebook sales, and analysts like NPD’s McLean only examine ebook sales trends, not ebook lending.
But if data doesn’t inspire publishers to be more amenable to libraries, the law might.
Congress is currently investigating tech monopolies, and while the attention has largely been focused on companies like Facebook and Google, the inquiry extends to digital markets like ebook sales, too. Last fall, the ALA submitted comments to the U.S. House Committee on the Judiciary’s Subcommittee on Antitrust, Commercial and Administrative Law about two separate issues: the Macmillan embargo and the high prices publishers charge libraries for restrictive ebook licenses. Inouye said the ALA expects the subcommittee to release a report toward the end of March or early April. He hopes the ebook library lending issue will be included in the report, and that legislative action will follow.
“Our hope is that the library and ebook lending issue would be included as an example of abuse of market power—that very large players in the marketplace go beyond what is really appropriate for our economy and society,” Inouye said. “Some kind of adjustment to the law needs to be made to prevent this kind of behaviour. A company can’t arbitrarily decide that they’ll sell to you, the consumer, but they won’t sell to a library at any price during the embargo price.”
It might all come down to money, but libraries also have a responsibility to serve the public in what is perhaps one of the only widely acceptable bastions of socialism in the U.S. Libraries are cornerstones of their cities. They offer resources to underserved communities, provide programming for curious children and frazzled parents, and, perhaps most importantly, preserve knowledge for future generations. That will remain the case even without ebooks, but print is fragile and not as accessible as digital, freely available information.
Ebooks were supposed to change the world, and make information more affordable and accessible to people everywhere. Instead, people are buying hardcover books from Amazon, which are somehow cheaper than paying $US15 ($23) for an ebook, or have to wait weeks on end for an ebook to become available for free through their local library. This is not the utopia we imagined. Perhaps legislation could change that.