Have you checked out an ebook or audiobook from the library lately? Since COVID, record numbers of readers have. And that comes at a huge cost to your public library, because they can’t own those digital materials, only “lease” them from most publishers.https://t.co/Uo5bPsLQM7
— Internet Archive (@internetarchive) September 13, 2021
Daniel A. Gross, at the New Yorker, explains “Increasingly, books are something that libraries do not own but borrow from the corporations that do”:
Steve Potash, the bearded and bespectacled president and C.E.O. of OverDrive, spent the second week of March, 2020, on a business trip to New York City. OverDrive distributes e-books and audiobooks—i.e., “digital content.” In New York, Potash met with two clients: the New York Public Library and Houghton Mifflin Harcourt. By then, Potash had already heard what he described to me recently as “heart-wrenching stories” from colleagues in China, about neighborhoods that were shut down owing to the coronavirus. He had an inkling that his business might be in for big changes when, toward the end of the week, on March 13th, the N.Y.P.L. closed down and issued a statement: “The responsible thing to do—and the best way to serve our patrons right now—is to help minimize the spread of COVID-19.” The library added, “We will continue to offer access to e-books.”
The sudden shift to e-books had enormous practical and financial implications, not only for OverDrive but for public libraries across the country. Libraries can buy print books in bulk from any seller that they choose, and, thanks to a legal principle called the first-sale doctrine, they have the right to lend those books to any number of readers free of charge. But the first-sale doctrine does not apply to digital content. For the most part, publishers do not sell their e-books or audiobooks to libraries—they sell digital distribution rights to third-party venders, such as OverDrive, and people like Steve Potash sell lending rights to libraries. These rights often have an expiration date, and they make library e-books “a lot more expensive, in general, than print books,” Michelle Jeske, who oversees Denver’s public-library system, told me. Digital content gives publishers more power over prices, because it allows them to treat libraries differently than they treat other kinds of buyers. Last year, the Denver Public Library increased its digital checkouts by more than sixty per cent, to 2.3 million, and spent about a third of its collections budget on digital content, up from twenty per cent the year before.
There are a handful of popular e-book venders, including Bibliotheca, Hoopla, Axis 360, and the nonprofit Digital Public Library of America. But OverDrive is the largest. It is the company behind the popular app Libby, which, as the Apple App Store puts it, “lets you log in to your local library to access ebooks, audiobooks, and magazines, all for the reasonable price of free.” The vast majority of OverDrive’s earnings come from markups on the digital content that it licenses to libraries and schools, which is to say that these earnings come largely from American taxes. As libraries and schools have transitioned to e-books, the company has skyrocketed in value. Rakuten, the maker of the Kobo e-reader, bought OverDrive for more than four hundred million dollars, in 2015. Last year, it sold the company to K.K.R., the private-equity firm made famous by the 1989 book “Barbarians at the Gate.” The details of the sale were not made public, but Rakuten reported a profit of “about $365.6 million.”
In the first days of the lockdown, the N.Y.P.L. experienced a spike in downloads, which lengthened the wait times for popular books. In response, it limited readers to three checkouts and three waitlist requests at a time, and it shifted almost all of its multimillion-dollar acquisitions budget to digital content. By the end of March, seventy-four per cent of U.S. libraries were reporting that they had expanded their digital offerings in response to coronavirus-related library closures. During a recent interview over Zoom (another digital service that proliferated during the pandemic), Potash recalled that OverDrive quickly redirected about a hundred employees, who would normally have been at trade shows, “to help support and fortify the increase in demand in digital.” He recalled a fellow-executive telling him, “E-books aren’t just ‘a thing’ now—they’re our only thing.”…
… In 2011, HarperCollins introduced a new lending model that was capped at twenty-six checkouts, after which a library would need to purchase the book again. Publishers soon introduced other variations, from two-year licenses to copies that multiple readers could use at one time, which boosted their revenue and allowed libraries to buy different kinds of books in different ways. For a classic work, which readers were likely to check out steadily for years to come, a library might purchase a handful of expensive perpetual licenses. With a flashy best-seller, which could be expected to lose steam over time, the library might buy a large number of cheaper licenses that would expire relatively quickly. During nationwide racial-justice protests in the summer of 2020, the N.Y.P.L. licensed books about Black liberation under a pay-per-use model, which gave all library users access to the books without any waiting list; such licenses are too expensive to be used for an entire collection, but they can accommodate surges in demand. “At the time of its launch, the twenty-six-circulation model was a lightning rod,” Josh Marwell, the president of sales at HarperCollins, told me. “But, over time, the feedback we have gotten from librarians is that our model is fair and works well with their mission to provide library patrons with the books they want to read.”…
Libraries now pay OverDrive and its peers for a wide range of digital services, from negotiating prices with publishers to managing an increasingly complex system of digital rights. During our video call, Potash showed me OverDrive’s e-book marketplace for librarians, which can sort titles by price, popularity, release date, language, topic, license type, and more. About fifty librarians work for OverDrive, Potash said, and “each week they curate the best ways each community can maximize their taxpayers’ dollar.” The company offers rotating discounts and generates statistics that public libraries can use to project their future budgets. When I noted that OverDrive’s portal looked a bit like Amazon.com, Potash didn’t respond. Later, he said, with a touch of pride, “This is like coming into the front door of Costco.”…
To illustrate the economics of e-book lending, the N.Y.P.L. sent me its January, 2021, figures for “A Promised Land,” the memoir by Barack Obama that had been published a few months earlier by Penguin Random House. At that point, the library system had purchased three hundred and ten perpetual audiobook licenses at ninety-five dollars each, for a total of $29,450, and had bought six hundred and thirty-nine one- and two-year licenses for the e-book, for a total of $22,512. Taken together, these digital rights cost about as much as three thousand copies of the consumer e-book, which sells for about eighteen dollars per copy. As of August, 2021, the library has spent less than ten thousand dollars on two hundred and twenty-six copies of the hardcover edition, which has a list price of forty-five dollars but sells for $23.23 on Amazon. A few thousand people had checked out digital copies in the book’s first three months, and thousands more were on the waiting list. (Several librarians told me that they monitor hold requests, including for books that have not yet been released, to decide how many licenses to acquire.)
The high prices of e-book rights could become untenable for libraries in the long run, according to several librarians and advocates I spoke to—libraries, venders, and publishers will probably need to negotiate a new way forward. “It’s not a good system,” Inouye said. “There needs to be some kind of change in the law, to reinstate public rights that we have for analog materials.” Maria Bustillos, a founding editor of the publishing coöperative Brick House, argued recently in The Nation that libraries should pay just once for each copy of an e-book. “The point of a library is to preserve, and in order to preserve, a library must own,” Bustillos wrote. When I asked Potash about libraries and their growing digital budgets, he argued that “digital will always be better value,” but he acknowledged that, if current trends continue, “Yes, there is a challenge.”…
Don’t know enough about the topic to have an opinion, but here’s a suggestion from the Internet Archive:
4/ Library coalition leader @LibraryFutures says there is a better way forward. It’s released a new paper on #ControlledDigitalLending outlining #libraries‘ right to own & lend digital materials.
This matters to every library user:https://t.co/bLk8Hb5aM6#empoweringlibraries
— Internet Archive (@internetarchive) September 13, 2021