Threats to Digital Lending
Does the durability of ebooks pose a digital danger to libraries?
Posted Thu, 01/12/2012 - 13:19
Printer-friendly versionWhen the Kansas Digital Library Consortium’s contract with digital-content distributor OverDrive was up for renewal last year, two issues made Kansas State Librarian Joanne Budler decide it was time to move on and transfer the ebook titles to another vendor who could offer a better deal. First, OverDrive planned to raise license fees by almost 700% by 2014. But even more disturbing was a change to the contract that would have changed the consortium’s ownership of the ebooks to a subscription.
OverDrive said that the libraries had only leased access; they did not own the books, and therefore could not retain access when they changed providers. The Kansas attorney general’s office argued otherwise, saying that the wording of the license agreement indicated that the library did own the ebooks. Kansas decided to hold firm on the state attorney general’s assertion, and Budler began her quest to negotiate ownership of the ebooks with each individual rights holder, in most cases the publisher. (Budler will tell her story at the 2012 ALA Midwinter Meeting in Dallas on Saturday, January 21.)
Taking issue with licensing
The situation in Kansas highlights the uncertainty about ownership of ebook content. What is ownership, after all? Perpetual access under certain conditions defined in the contract? True ownership, where the library can sell or discard its digital copy?
Check out your ebook licenses; if you think you own the ebooks that you paid for, think again. A thorough examination of the contract language may indicate that you are only renting the content, which would mean you have to pay the rent every year or risk losing all of your ebooks. State and local government officials might question what you have been doing with the money appropriated to fund your public library: “You say you bought the books, but now you don’t have them anymore? Sounds like tax dollars down the drain.”
In fact, libraries have been renting their digital content for more than 30 years. However, with other license agreements, libraries get additional content each year they subscribe. In some cases, they get enhanced services, such as keyword searching capability, by choosing to rent the digital version of a journal instead of buying the print edition. But imagine paying every year for the same content without bells and whistles. It really is like renting an apartment: Your landlord is the intermediary vendor who negotiates rights with publishers, literary agents, and authors—not an easy job—and hosts the ebooks you have selected for purchase.
Contracts for digital content can also legally circumvent user rights that we value in the print world. Here, the right of first sale under the copyright law is of greatest concern. First sale allows the owner of a lawfully acquired copy of a work the right to lend that copy or rent or dispose of it. Libraries can purchase resources and lend them at no cost to the user because of first sale, which is an exception to an exclusive right of copyright—in this case the distribution right. But there is no digital first sale right per se, unless a license agreement expressly says so.
Some troubling scenarios already exist: limiting the number of loans unless an additional payment is made, as in the HarperCollins 26-loan business model, Penguin delaying access to such high-demand e-content as new releases, and Hachette refusing to sell any new ebook releases to libraries. The worst-case scenario is already practiced by two publishers: Neither Macmillan nor Simon & Schuster sell ebooks to libraries at all. And Brilliance Solutions has decided to suspend the availability of its audiobooks for library download as of January 31.
The very real possibility that libraries may find themselves unable to lend escalates as more content is made available only in digital formats under stricter contract terms. In addition, other library functions—preservation, interlibrary loan, and fair use, to name a few—may also be forbidden when dealing with digital materials.
Rights holders have valid concerns as well. They say they are going out on a limb by providing digital files, which are prey to pirates who make unauthorized copies, readily available to all. Rights holders assert that pirated copies replace sales. If rights holders are going to provide digital content, they need license agreements enforced by digital rights management (DRM) technologies that will limit the risk.
Whether this is a sensible strategy can be debated. More chilling is the realization that many rights holders never particularly liked library lending in the first place. Some rights holders feel they should be paid each time a patron borrows an ebook; today’s digital technologies make this a viable business model.
Remember how the library community feared a pay-per-use model? Is it becoming a reality?
Creating new lending models
Can we do anything to preserve first sale when such federal copyright exceptions are effectively nonexistent in the digital context?
Academic libraries have had some success negotiating perpetual access terms in licensing agreements. The idea is that the license should expressly state that libraries have this right. For academic libraries, perpetual access is essential for the preservation of the cultural heritage. School librarians, who also tend to deal directly with publishers (without vendor intermediaries), have also negotiated agreeable contract terms. For schools, retaining content is not always necessary and lending may not be as important; but concerns about ease of use, simultaneous access, and interoperability are paramount.
In both cases, however, academic and school libraries primarily acquire content for the purposes of learning and research. Publishers that provide this type of content rely almost exclusively on sales to these educational institutions and their libraries. With trade publications, public libraries are not the sole customer for content; in fact, they are a relatively small percentage of the market. The public buys trade books from brick-and-mortar bookstores—now dwindling in number—or from online retailers like Amazon. People buy their e-content at an online retail store because it is so easy—downloading content is a breeze. In fact, Amazon seeks to provide readers with a “seamless shopping and reading experience.” People might as well buy a lawn mower while they are downloading the latest Scott Turow thriller.
We know that public libraries enhance the sale of books; but does this benefit outweigh publisher concerns about piracy and the business opportunity to sell the same content over and over again, monetizing library lending? One often-heard suggestion is to change the copyright law to include a digital first-sale provision. Experts agree that this is a pipe dream for several reasons. First, it is highly unlikely that Congress will act, especially given the current political environment. If legislators did take up the issue, it is unlikely that the stakeholders would come to a consensus that everyone could live with. Moreover, there is the real possibility that the resulting legislation would end up being worse for libraries rather than better.
Second, the request for a digital first-sale right has already been considered by Congress, and subsequently studied by the US Copyright Office. While negotiating the Digital Millennium Copyright Act (DMCA) of 1998, libraries supported legislation that would create a digital first-sale right within the copyright law. Congress postponed consideration pending a report from the Copyright Office, which concluded that the library associations were worried about a future that was unlikely to occur and that business models would provide viable options. (See DMCA Section 104 Report, PDF file).
We can’t remain passive and wait around for Congress to act. We need to think more creatively—and aggressively. Perhaps we can even put the print model aside and develop good digital models for sharing library ebooks.
In the meantime, I hope the library community can accomplish a few things:
- Negotiate better contracts. As the rules shift and change, librarians must be critical consumers. More than ever, we must ask questions, seek clarity on vague language, challenge contract terms, and bargain for the best terms for our libraries and our users.
- Learn from each other. What can public librarians learn from school and academic librarians—and vice versa?
- Gather and demand better data. Is it true that lending undermines sales? We have valid data indicating the opposite: A 2007 Harris poll of library patrons (PDF file) indicates that borrowing books inspires people to buy their own copy. A 2010 white paper from OverDrive (PDF file) draws similar conclusions about ebook lending. Still, rights holders are not convinced, and we need even more proof about libraries’ quite-positive effect on publishers’ sales to counter the misguided theory that lending replaces sales.
Searching for solutions
Finally, we need to be clever and action-oriented, and stop sitting around hoping that the situation is going to change.
We need to walk a mile or two in the publishers’ shoes to appreciate rights holders’ concerns. The ebook phenomenon endangers the way publishers do business. Gone are the big sales realized in the known business cycle, where publishers could depend on the success of hardcover bestsellers and later make the same titles available in paperback, bringing in another chunk of change. Gone are the bookstores that promoted sales, encouraged browsing, and provided sidewalk marketing appeal. Gone is the ability to have greater control over pricing, as online sellers undercut prices to gain market share. If we work with publishers, could we find common ground leading to workable solutions?
We should try out new business models in our dealings with rights holders: Buy directly from rights holders, including authors; host your own ebook content; or offer library users the choice of purchasing ebooks through the library catalog when the waitlist is too long. All of these have been fruitful experiments for libraries and rights holders.
Libraries can do a better job at negotiating contracts with ebook vendors: Challenge contract terms; ask questions; provide clarity to vague, incomprehensible language; and bargain.
Most importantly: Envision, plan, and develop the public library of the future. If public libraries are to survive and remain essential to their communities, they cannot be the libraries we know today. Their time has come—and is nearly gone.
CARRIE RUSSELL is the director of the Program on Public Access to Information of the Office for Information Policy at ALA’s Washington Office.
American Libraries Magazine | 50 East Huron | Chicago, IL 60611 | 2013© American Library Association | Staff Login
Comments
Ownership of eBooks
My recent divorce from my wife has opened my eyes with regard to the ownership, and the transfer of the ownership, of ebooks.
More than $2,500 dollars worth of ebooks were purchased from Amazon.com using our shared account with Amazon, which is in my name, and funds from our shared bank accounts. Despite the provisions of our mutual, and friendly agreement, evidenced by the final Judgement of Divorce rendered in the State of California, dividing the books evenly between my ex-wife and I, Amazon.com will NOT transfer those books granted to my wife from my account at Amazon.com to her new account at Amazon.com.
Until there is legislation better dealing with the ownership and transfer of ownership of eBooks, and/or the licenses thereto, no more eBooks for us!
Imho ebooks can be both
Imho ebooks can be both helpful and dangerous to society. They can be helpful because it can be distributed amongst kids today who prefer to have gadgets than to have paper books and in addition to that it’s going to be an easy access. Although it can really be harmful to writers since, let’s face it, putting it in the internet is like giving it freely to the public. It can easily be copied around, thus having a patent right to it is just merely to recognize the author rights.
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Libraries create readers
One thing I never see in this type of discussion is the whole issue of the creation of a buying public for publishers. I really can’t understand the publisher’s rationale that they have missed this essential point. Libraries create readers. Over the course of my life I’ve had periods where I could not afford to buy many books/magazines etc and I’ve used my public library to fuel my need to read. For example, as a teen I used my school and public library for 95% of my reading material. The public library introduced me to certain favourite authors where I would build up collections of their works. When I had a job I had disposable income to buy books, but also still borrowed. If you cut libraries out of the mix you are stopping people from reading, and from becoming lifelong readers who will buy books (in whatever format). There is no way I could afford to buy the number of books my 9 year old daughter reads (about 7 novels a month worth about $10-$15 a pop). Yet she has become a dedicated reader because she has access to borrowing books from libraries. If I had to buy her those books, she would not have them, ergo, she would not be the reader she is. Yet still, we do spend a few hundred dollars a year on children’s books, and a few hundred more on adult books. And still use public libraries heavily. I’ve been watching this issue closely, and as a consumer have been deciding which online retailers I want to support based on their attitude towards public library lending of ebooks. I suggest you do the same, as I don’t think the publisher really cares about the social side of the issue.
Someone needs to take what Jo
Someone needs to take what Jo Budler did to the next stage, and ASSERT first sale rights. Buy ebooks, lock them up and “circulate” them one at a time.
No more asking permission — let the publishers sue, let them lose as they do for every other format. You are not a pirate if you are not making copies.
Overdrive “sells” books to libraries that are not theirs to sell? We should lease them then, and price them accordingly.
They need us, and they will cave. If nobody shares, nobody cares and your product is worth nothing. Will it be landfill or wasted space on a server somewhere?
I am also not worried about ebooks replacing paper books anytime soon, especially for libraries. The hoops are so hard to jump through most patrons give up.
School Libraries
“School librarians, who also tend to deal directly with publishers (without vendor intermediaries), have also negotiated agreeable contract terms.”
Any examples you could provide? That’s not my experience in 20+ years. I’d like to meet another school librarians who are able to negotiate better terms. If it wasn’t for the state library acting on our behalf, very few of us could afford licensed content.
Legal Means Should be Considered
It would seem that the misplaced optimism with which many of us greeted the advent of digital books is finally giving way to a pragmatic acceptance than we as librarians may just have to fight to retain our patron’s right to read important books even if they do not have the money to buy what they need.
Our State’s Attorneys General could take a hard look at the refusal of publishers to sell books to Libraries. This would be especially helpful if it takes place in New York where many publishers have major offices and could be joined by ALA and other groups concerned about human rights.
What some foreseeing Librarians worried about seems to be coming to pass and we must accept that optimism is not an effective tool to reverse the course of organizations that see an advantage in their current policies.
Paperback Model
I really appreciate this fascinating article and excellent posts.
Perhaps publishers will consider a twist on the old model in which books were published initially in the expensive hard cover edition before the cheaper paper-bound books were printed. Under an e-version of this model the publishers would make most of their money on the hard-to-pirate paper editions before releasing the digital formats.
Libraries Are Natural Allies w/ Amazon
The real tug-of-war is between Amazon and the publishers. Amazon wants to keep prices down; publishers want to set prices themselves & keep them up (agency model). Libraries are just getting caught in the middle. For example, the Penguin business a couple of months ago (withdrawal of Kindle ebooks from OverDrive) was really part of the fight between Amazon & the publishers over the free-lending of eBooks via Amazon Prime.
Amazon’s recent decision to make Kindle ebooks available to free-lending libraries via OverDrive in fact may well indicate that Amazon sees libraries as a friend in this war. In other words, free-lending should help keep prices down — why else are the publishers (Simon & Schuster, MacMillan, etc.) afraid of libraries?
This is going out on a limb, but I wouldn’t be surprised if Amazon buys OverDrive in the next year or two (since the latter already has such a big foot in the door of the public library market), thus making our alliance manifest.
The real fight is: How much is content worth? My feeling is it just isn’t worth as much as it used to be or as much as the publishers want it to be & a lot of publishers are going to bite the dust & Amazon will ultimately triumph. (Note the recent lawsuit against Apple & the publishers who allegedly colluded to fix prices.)
Next question: How you folks feel about an Amazon monopoly?
Pay per use viable digital lending model for public libraries
Before rejecting the pay per use model for e-books librarians need to look at how actual public library collections are created, used, and maintained and talk about the costs involved. Frankly, it looks like many of the people writing and commenting on the sacredness of right of first sale can’t have had much experience with collection budgets, collection management, and circulation issues. Public libraries do not keep all the books they buy forever and not all books circulate the same.
Think of this in terms of budget numbers, usage statistics, and the hard facts no one wants to talk about regarding collection loss. If the writers and commentators really care about this issue they need to research the following:
Annually how much does your public library spend on materials that will be shelved in the library?
Annually how many items are withdrawn from the library to make room for new materials? (10%)?
Annually how many items are checked out by patrons and not returned ( a lot of popular materials)?
Annually how many items go missing from library shelves (a lot less than are lost in circulation)?
Multiply the cost of the items by the number withdrawn, not returned, and missing , and pay per use for e-books will look like a bargain, especially if public libraries can negotiate a special library price for library users. Maybe if we pay per use the publishers will be willing to sell to public libraries.
Please quit romanticizing and confusing the physical collection with the virtual collection. Which by the way, the virtual collection has some real problems too – hard to get at and horrible to browse. But that’s another subject entirely.
Do Loans Help Sales?
We now do have further evidence that loans improve, and do not cut into, sales. Amazon has published numbers from its first month’s experience with the Kindle Owners’ Lending Library (KOLL).
According to Amazon’s VP for Kindle Content, “KDP Select appears to be earning authors more money in two ways. We knew customers would love having KDP Select titles in the Kindle Owners’ Lending Library. But we’ve been surprised by how much paid sales of those same titles increased, even relative to the rest of KDP.” http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID…
So having a book available for loan INCREASES its sales. Look for KOLL title numbers to skyrocket once publishers accept this fact and their authors press them to get in on a good thing (the KOLL “pot” for January has been increased 40% to $700,000). Then, watch out, libraries.
The End of Libraries
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what leverage do we have?
While I don’t think I can follow the previous poster down the road of weighing individual digital copies, I do agree the article does not go far enough. The first suggestion is for libraries to negotiate better licenses, but what leverage do we really have with the rights holders? Certainly, as pointed out, school and academic libraries may have a bit more leverage due to the percentage of the market they represent. This is not true of public libraries and popular materials. Some publishers would be more than happy to only sell individual ebooks to individual customers or even to edge libraries out with a free (for now) subscription model like the Amazon lending library. Changing the law may be a pipe dream, but it is the only viable alternative I see. I think once we flex our respective popularity and good-will based muscles, congress will move toward our position.
First Sale Right
I submit that all digital content is in actuality real content with mass and weight.
Even though we cannot see it, the mass and thus the weight of a digital file is measurable. Thus, all digital files should be covered under first sale rights just as books made from paper are.
Sound silly, maybe, but its true.
While it is unlikely that congress will act upon this, we could very well see states start to establish first sale rights for digital files. Frankly, I’m sick of publishers and their whining and expect my government to follow its most important and basic mandate…to promote the general welfare of the public.
I’m close to the point of demanding first sale rights for all digital content because the bottom line is this……none of the measures publishers and content owners want or have are worth a cup of warm spit in the battle to stop piracy.
Digital Ebooks DRMed……..about 10 seconds to crack.
Paper books……$100 for the system and about 1 -1/2 hours to convert to every major digital format in use today.
Bottom line is their consumer frustrating, feel good measures to prevent piracy are not working and illegal downloads are not lost sales.
Honest people are going to buy their books no matter what, and thieves are going to steal their books, no matter what.
Right now, your pissing off the honest people to a point where they are seriously considering just pirating their copies so they can get the content they want in the fashion they want it.
We as a nation are at a crossroads here….are we going to let these tea-party neoliberalist resource holders enforce a scarcity model that increasingly makes little sense anymore?
Ebooks are more expensive that many paper books…where is the sense in that? Sure I’ve heard the excuses…but then I’ve also heard foxes plead very believably about their stent at guarding the chicken house as well. My experience shows me that they are pulling a con and doing their level best to destroy the American library system in the name of profit.
Profit is good, but you must remember, with corporate personhood, comes corporate responsibility to ensure that our great society survives. Lately these turds are the finest example of predators we have on the planet.
Flame me if you will, but I’m fed up with this issue. My state library has less than 5000 ebooks they can lend when anyone who wants to can go to Pirate bay and download ebooks packs with 10-20,000 ebooks in a couple of hours…….most of those books are not in the lending system. Wonder why they are getting downloaded so much?
SOPA and its related ilk legislation are useless. No matter what they do, tech people will find a way around it. And when the satellite internet is established that is outside the realm of nation states, no amount of nation state legislation will prevent people from exchanging what they want.
The best thing publishers can do is treat ebooks like paper books and try their best to provide what readers want and are willing to pay a reasonable price for……so sorry bubs…the world is getting to the point where fatcats can willing go in a diet…or the rest of them are going to force a haircut on them.
Some of what I write below
Some of what I write below may apply to technical books, and not necessarily fiction.
Firstly, a book take a lot of time to write, so normally an author prices their book to compensate the time spent.
Consider a class room situation. A prof recommends a new book, students are expected to have all time access to it, usually by means of purchase. A college library usually has only one or two books on reference.
Books are also bloating and becoming costlier than needed.
Books, at-least of the technical types, unlike wikipedia, seem to be losing their incremental nature.
A new textbook seems to be a retold narration of an old one, with few minor changes.
Most of the times, instructional books are of a temporal necessity, whether one uses it for work in the company, in which case you read it in order to do something at work, or maybe for a classroom, and their no guarantee that a class room text book would ever be needed again in life.
Even in the paper world, the creation of editions seems to sometimes, artificially reduce the price of older editions.
Here’s another dynamic, while the right of a professor to introduce a new book can be seen negatively as a way to artificially generate revenue, it can also be seen positively as the chance for the professor to produce a new interpretation. However the latter use case seems to be less and less common these days.
I think its hard to call people who pirate books to be thieves, when the body of knowledge around them is in-fact open, and the system of compartmentalized learning units though books, forces them to make a purchase.
I have a feeling with the explosion of content generation,
It will be obligatory to recommend the lowest cost book, to the reader.
In the case of libraries, something more outrageous is happening.
Particularly in academia when knowledge is generated via government grants, which is tax payers money its hard to justify the resale of the generated knowledge. Now government may see the resale of knowledge as a means of collecting sales tax.
Ebooks are more dangerous because the content owners don’t want to issue a perpetual transferable license. Ebooks owners also risk forced obsolescence and incompatibilities through obsoleting hardware, devices, software, file formats (kdx,epub), media (Tape/CD) in addition to the cruelly changed ebook edition.
One has to be wary of buying ebooks too. Electronic surveillance and tracking via DRM and the failures there of may also create more problems. The most dangerous of which is the ability to pull the plug
on older editions. Good, content may never even come out of copyright, and even those that do, those who can manipulate the market will steer it away from the content’s utility.
Sometimes I swing to the idea that maybe ownership model of content all together is going away, maybe all content ought be ad supported like using Google. Genuinely then, the ad and the time spent on the page, quantify the utility of the written content and
When the system around you make bread so costly, its hard to justify the the street urchin who runs with their loaf of bread as thieves.
SOPA, imho, is just a ill-fix to symptom of other problems.
Ebook piracy is an indication of something else wrong in how the system works.
Zeitgeists would point out, that all that being seen are side-effects of the monetary system.
Authors plagiarize from one another, consumers share with each other, Only to make a buck, or to save money.
Everything is almost plagiarism these days. New stories (fiction) seem to be a retelling and mix-matches of an old, and New tech books seem just sophistic-ally remade.
There are means and mechanisms for IP holdings to obsolete an electronic content, make an older version inaccessible, and cause (ex Windows-7) . I can see this happening to the movies of the 60s. What if VHS quality is all u wanted, why should u be forced to watch at prices of expensive HD streaming.
Imagine if someone had to continue to pay royalty, for old books made on palm leaves, papyrus for continuous upgrades for books since the time of Alexadria.
Piracy is an indicator that the labor, production and value seem to be at mismatch. People do not want to be continually drained of their income, when the access to the necessary is in the control of a few, free to charge .
I think a solution is necessary to directly bridge content-generators and content-consumers, and the open ness of knowledge, the public funding of knowledge and the incremental nature of knowledge generation factored. This is the age where all the agents in the middle need to be shorted out.
First Sale Right
I might object occasionally to Heilager’s choice of phrasing; however, I can’t but agree with the central message: First Sale Rights must be accorded to digital manifestations of the same range of print-based intellectual property that enjoys those rights. And it should be done not for the somewhat strained reason Heilager gives (that files have “heft”), but because a book is a book and if our society has decided that first sales rights (the right to lend, resell, or discard, but not to copy) are appropriate for books, then they should be appropriate for books in any format.
I think it likely the courts will be called upon to consider this question before either state or federal legislative bodies; however, the argument must be made and the position affirmed, and the sooner the better.
If SOPA or publishers or anyone else can keep this from happening, then libraries will forever be constrained from properly distributing books in eBook format, and that will threaten those institutions with obsolescence—a fate to be avoided at ALL costs.
The End of Libraries
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