50 Shades of Red: Losing Our Shirts to Ebooks
PrintThis post was written by James LaRue, director of Douglas County (Colo.) Libraries and member of the ALA Digital Content and Libraries Working Group. More of LaRue’s writing can be found on his website.
For decades, public libraries have seen steady gains in use. We check out more books, get more visits both physical and virtual, and have more kids at storytime. At my own library, we’ve seen double-digit growth almost every year for over 20 years running.
Until last year. The drop wasn’t big—about .7%. But from such little shifts come major seismic realignments.
In our attempt to make sense of this apparent dropoff, we looked at many statistics. The first one that made sense was this: We hadn’t bought as many items. In fact, we’d bought about about 4% fewer. Buy fewer books, get less use. Clear enough. The fact that it hadn’t been a 4% drop speaks to our sharp focus on purchasing things that do circulate, and building a lot of expertise in the display of our holdings.
But that drop in purchases wasn’t a result of declining revenues, at least not last year. Our income is tied to property taxes, and they did fall in 2012 (a result of a general drop in assessed valuation following the collapse of the housing market). But last year, we’d spent at least as much money as the year before. It just didn’t go as far.
Below, see a chart we worked up in July for the current bestseller Fifty Shades of Grey by E. L. James (ebook available from OverDrive):
|
Format |
Copies |
Circ |
Holds |
Circ/Copy |
Weeks Wait |
Retail Price |
Our Price |
|
|
|
149 |
675 |
822 |
4.53 |
16.55 |
$15.95 |
$9.41 |
|
|
Ebook |
20 |
117 |
362 |
5.85 |
54.30 |
$9.99 |
$47.85 |
|
|
Totals |
169 |
792 |
1184 |
|
|
|
|
|
You see what’s going on here: a proliferation of formats combined with a spiking of costs. Together, they greatly impede our ability to meet public demand for a particular work; they erode the purchasing power of the public library.
And for those publishers reading this: “waiting time” equals “friction.” Okay? Your local library can’t instantly satisfy local demand, much less global demand, despite all the money we spend with you.
I’ve argued elsewhere that there are three factors that directly influence our ability to fulfill the library mission. Two of them are ownership (the ability to have physical possession of a file, the better to preserve and manage it), and integration (the ability to provide some polish and convenience to the user experience).
But the third factor is equally basic: cost. Right now, publishers and distributors (in this case, Random House and OverDrive) have driven up the price of an ebook so far that it really doesn’t make sense for libraries to buy it. People who read ebooks don’t stop reading on paper; if anything, they seem to read more in all formats. People who listen to audiobooks, however, don’t seem to shift platforms as easily. But clearly, the cost for these formats is as bad or worse than ebooks.
I should also say that a random comparison of prices between OverDrive and 3M revealed 3M as about 16%&ndash17% more expensive than OverDrive, on average. I’m not just targeting one publisher or distributor here.
Considering the difference between the cost of paper and digital formats, I really did consider buying paper only. For now, that’s just prudent: I can reduce the waiting list faster by purchasing multiple copies at discount.
But you know what’s coming next: the book that is published e-only, or that comes out as an ebook first, and on paper two months later. This is an attempt—successful, so far—to lock us out of the market by outright denial on the one hand, or through ballooning costs on the other.
So besides complaining about it, what can libraries do? First, I think we need to keep putting these cost comparisons out there, not only for librarians, but for the public.
Second, I think we have to learn how to manage our own e-content. Cutting out the middle man may be essential to our economic survival. These prices will accelerate that quest.
Third, I think we should work even harder to reward with our attention those publishers and distributors who offer more favorable terms. And I’m not just talking “buying it again at 26 checkouts doesn’t seem so bad now!” “Less bad” isn’t “good.” Let’;s spend our money where we can make it count, and where we can demonstrate that there is in fact an economic value for libraries. When a consumer can buy something for $9.99, and we pay $47.85, that’s a tough case to make.
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Comments
3M response
I wanted to update the above. 3M is new in the ebook market. I shared with them some of the cost differences and within a week, they adjusted their pricing downward. At this point, I believe them to be roughly the same as OverDrive. On the other hand, I think OverDrive prices — which exceed consumer prices — are still too high. In fact, my library will begin doing monthly price comparisons for ebook versions New York Times Bestseller List, and sharing them widely. I encourage all librarians to begin tracking the costs. As I have written elsewhere, there’s plenty of room for distributors who add value. But apparently, they do have to be watched.
put your thinking cap on
I agree E-books are on first look expensive; however instead of just complaining we as library leaders need to be open to options. One possible way of getting more value out of your e-books is to reduce the length of check-out time versus print. It would likely not inconvenience your patrons much as they can access the book from home, they may download the e-book upon receipt of an automatic e-mail notifying them of the boos availability, thus saving themselves the trouble of driving to the library to pick-up the print copy that is on reserve for them. Secondly you avoid to look at the TCO ( total cost of ownership) , the paper copies will over time need to be either repaired or replaced due to use, an additional few will be stolen. Those costs are not included in your calculations, not is the staff cost related to paying overdue’s, sending hold notices and the like. If we look at the really big picture the cost of E-books seems to be more reasonable.
ebooks..er
what you’re failing to see is that on top of print publishing, ebooks cost nearly nothing to produce, incur zero advertising costs, and negligible distribution costs. just because it is more convenient, and selling to a library could cause an infinitesimal drop in sales shouldn’t create an excess cost. you can justify to some small extent the cost of an ebook at all, but just like with print books, there should be a bulk purchasing price break, not a quadrupling. you do not double charge something because it will cause that many less people to buy it. that will cause even smaller sales, and snowball sales downward. the total cost of production should not reflect a lessened TCO. a publisher is not a convenience store.
ebook costs are too much as it is. unless you’re talking about first month sales, an ebook shouldn’t ever cost any more than a paperback. maybe i’ve been missing things, but most rag books aren’t $50.
Other cost factors
There are other positive externalities to consider in this equation, such as the labor-intensive costs of re-shelving physical books (not incurred with eBooks) and locating & pulling holds (none again).
Consider too cost-per-reader: if a $47.85 eBook circs 6 times it’s already cheaper on that basis. How many lifetime circs do you think you’d get out of _Fifty Shades of Grey_? The mind reels…
[These comments reflect my own private opinion and do not, in any way, reflect the opinion of any corporate or governmental entity. Not sure why anyone would think they would - that strains common sense and logic - but just being careful!]
Mark, I certainly agree that
Mark, I certainly agree that we need to consider labor costs in our analysis of print vs. ebook prices. I have long wished for a visit from the economics fairy to help us understand what we are really looking at price wise.
I am confused about your statement about an ebook circulating 6 times as making it cheaper. If the print book is also circulating during the same period — and even if we postulate that the print book only circs 5 times to account for wasted time on holds shelves, in collection drop boxes, etc. — then the print book comes out at $1.88 per read vs $7.98 for the ebook. Even if we attempt to take into account other costs of moving/storing/handling the physical book, I don't think those costs come out to $6.10 per circulation. And, if we are going to factor in those costs, we would also have to factor in a percentage of the overhead costs from OverDrive to the ebook circulation.
Jamie and I are both fighting on a daily basis to bring more ebooks to libraries. I strongly believe that our library collections will be shifting increasingly to a digital format (especially for informational books) over the next few years. However, what Jamie was writing here, and what I extended upon in my follow-up post, is that ebooks are currently a disruptive technology. They are often more expensive, more difficult to purchase and manage, and generally a pain for libraries. And yet we have to keep finding ways to move towards that goal. Just go in with eyes open.
Thanks for sharing your thoughts!
My confusion led to yours
I didn’t make it clear that my cost-per-reader statement was not addressing the comparison your chart makes about the relative costs of different library material types but rather your concluding statement that “When a consumer can buy something for $9.99, and we pay $47.85, that’s a tough case to make!” I was making that case.
In that case, yes, the value
In that case, yes, the value proposition of a $50 ebook for a library vs a $10 book for a consumer is probably about right. Libraries have long enjoyed significant discounts (20% to 40%) on print titles, but maybe those days are coming to an end?
My concern with the $50 library ebook vs $10 consumer ebook, however, is that despite our paying that library markup, the publishers aren't providing any additional features or support for our non-consumer situation. As I wrote before, when Random House first announced price increases, the price isn't the problem. The problem is the lack of support coming with the price.
Without the additional support added in, the $50 ebook just starts to feel like opportunistic price gouging on the part of publishers and resellers. Show me the reasons why you can still sell me the print ebook for $10, but want $50 for the ebook. Especially in a case like this for a book that is enjoying its (not even remotely deserved) 15 minutes in the spotlight. Sure, the ebook may last forever, but I am guessing that it probably won't be in much demand 3 months from now.
So don’t buy the expensive
So don’t buy the expensive ones. We don’t. Random House just had a sale at Overdrive, offering lots of titles at the price they were pre-March 2012 (this included GONE GIRL).
Some titles, especially the mass-market ones, are a steal with the e-book when you consider they don’t wear out like paperbacks do (especially when you have weed-happy staff).
Do what works for YOU and YOUR LIBRARY. WE are the stewards of taxpayer money and we need to be assertive about this.
Write on!
Write on!
I wish I knew why the ebook
I wish I knew why the ebook price is so high, my assumption is that the publishers are concerned that an ebook is effectively a non-degrading book that the library can buy once and then never have to replace. I assume that they are looking at it eating into future sales and as such they feel the need to get as much money up front as they can.
Why don’t they just produce time-limited ebooks? The technology exists, I don’t know that it’s easy, but given all of the other drm they are using I’m sure it wouldn’t be much of a stretch. That way they could offer the libraries a discounted one year ebook, that would cover the initial rush after a book comes out, and once the year is up leave the library free to buy more or maybe buy fewer copies of the unlimited ebook so that they still have one on their shelves.