Buying E-books, Thirty-Eight Cents at a Time

The transformation of books into a fully-fledged digital medium took a giant step recently when HarperCollins announced new terms for the ebooks it sells to public libraries. Many librarians first heard about the policy change from Overdrive, the supplier that handles digital media loan programs for many libraries. The news was grim: HarperCollins will “sell” ebooks that libraries plan to loan out to patrons on a “26 circulations and done” basis, meaning that once the ebook has circulated twenty-six times, that copy will not be able to be circulated again. Libraries will need to purchase another copy of the book.

In a statement, the publisher justified the action by saying  “this change balances the value libraries get from our titles with the need to protect our authors and ensure a presence in public libraries and the communities they serve for years to come.” The number of circs was selected based on factors including the wear and tear on print books, and a library’s need to replace these copies as they wear out. Someone posted a picture of a print book that had been circulated twenty-six times. It appeared to be in pretty good shape.

So what is the upshot of this particular e-book kerfluffle? Well, the first point to be made is that now that e-books are becoming a significant part of their businesses, publishers must rethink the pricing model for the book as a digital rather than a physical item. From that perspective, the HarperCollins move is not so off-the-wall. In a recent front page story in the New York Times, Lisa Sampley, a librarian in Springfield, MO, says ““I can see their side of it.”

I’m hoping that if other publishers try to change the model, they think about the libraries and how it will affect us. But I’m sure there is some kind of model that could work for us both.

That conciliatory tone has not been matched, however, by librarians who felt “gobsmacked” by the change in policy. A website,, was established to serve as a clearing house for information about the change. Several terrific resources are linked at the site:

Bobbi Newman, at Librarian by Day, has put together a great collection of links to what librarians have written about this issue. We also recommend reading what Kate Sheehan has written about this issue at Loose Cannon Librarian.

Special Note to Kindle Owners: Of course, for now, this policy change doesn’t affect you, since the Kindle does not support library borrowing of e-books. This is convenient for Amazon, as it has its hands full battling publishers over their first salvo in the battle to control the monetization structure of e-book publishing, the imposition of the “agency model” on e-book distributors like Amazon.

HarperCollins’ move is cut from the same cloth. A digital book–a file really, a file like a music file or an image file–has different properties than a print book. So, what does it mean to “own” a digital file like an e-book? We learned a lot about that when, in an earlier e-book kerfluffle, Amazon removed improperly licensed copies of George Orwell’s Animal Farm from the Kindles of people who thought they had purchased and now “owned” the book. This represents the equivalent, in the world of print books, of a company sending its hip-booted minions into your house at night to retrieve a book that it deems doesn’t belong to you any more. Ownership that can be revoked by the push of a button is a kind of ownership that feels strange and new and a little bit scary to a lot of folks.

Now, what you can’t do with an e-book is well-documented. You can’t sell it, you can barely lend it (sometimes), and you can’t read it on any old device you happen to have sitting around. Can you imagine this scene from 2025: “Dad, where is the old Kindle that your copy of Going Rogue is on?” Until the demise of DRM, something that has happened in the world of downloadable music, the publisher clearly has more control over the content than you do.

So, owning an e-book mostly means that you have paid a fee to have access to it under conditions determined by the publisher and the distributor. HarperCollins is simply asserting its control over that e-book file. For libraries, it is as though the book has become equivalent to other digital resources, like a web-database or online service that libraries already purchase on a subscription basis. You pay by the amount of access you get, and that access is not unlimited. Usually, you get access for a period of time, like a year.

So what is the kind of model that, in Lisa’s words, “could work for us both”?

Maybe the right plan for e-book lending is some kind of “metered” access to the content. I, the library, will pay for exactly as many circulations as I need, neither more nor fewer. So I don’t have to buy even twenty-six circulations for a book that is checked out twice, and I can determine just how available I want to make the bestsellers which will circulate many more than twenty-six times. The kind of agreement that Lisa Sampley is looking for would establish the cost of a circulation at a price which won’t drive publishers–or libraries–out of business. Then, publishers do well when bestsellers drive a lot of circulations, and libraries are not forced to eat the cost of books that are flops. If the e-book costs the library $9.99, then the price of a circulation is about $0.38. In a perfect digital world, such an approach would help libraries budget more accurately for materials. If every book cost $0.38 per circulation, then a library that has 10,000 e-book check-outs per year can do the math to see what it needs to spend–$3,800.

Publishers like HarperCollins, who introduced this topic, may not like this approach, though, because it is more profitable to sell all titles at the same price, thereby charging the same for a dog as a hit, and then sell additional copies of the hit. They make money in both transactions. In the present case, they have decided that you must purchase twenty-six copies of the book at $0.38 per copy, whether you need that many copies or not. The real push back here for libraries is to accept the HarperCollins premise, and then push for metered rather than fixed pricing. Wonder how HarperCollins would respond to that?

But that is where the current kerfluffle is headed. And if libraries want to get on offense here, they need to take HarperCollins’s plan and insist on a single administrative change: let us purchase e-books on a per circulation basis, they need to say, rather than pretend that the e-book is a “package” of twenty-six circulations.My guess is that the price per circulation that keeps publishers and libraries both in business is higher than thirty-eight cents, but this would be a more transparent pricing system than the one proposed by HarperCollins.



  3 comments for “Buying E-books, Thirty-Eight Cents at a Time

  1. March 7, 2012 at 5:17 pm

    One year later, nothing has changed… except that Kindle Library books are now available. Sometimes. If you’re lucky.

    It seems to me that whenever technology makes new things possible, entrenched interests look to it as a way to make more money while offering you less. There are no physical printing or distribution costs for an e-book, and only a minimal retail cost. Preparation costs are sunk into the first printed copy, and only two parties – publisher and retailer – to split the cash between. So this measure looks a lot like greed to me.

    This is an example of publishers drawing analogies between e-books and paper books, but only when it is convenient (read “profitable”) for them to do so. It is bad enough that they get to decide if and when a book may be placed into a library, and for how long it may be borrowed, but now they want to decide how many times it can be lent citing real-world book wear. But if you buy an e-book you cannot re-sell or give it away, and you can only lend it once. Why? Because they said so.

    So whose book is it anyway? Whose “rights” are being “managed” here? Certainly not mine…


  2. willd
    March 19, 2011 at 6:22 pm

    Mike, well said. Thanks for adding your perspective!

  3. March 18, 2011 at 7:43 pm

    HarperCollins may be forgetting one of the biggest advantages of metered access. Every library, no matter how remote and small, could offer their clients every title in HC’s collection, rather than just the few the library can afford to stock. Each less-popular title, may not bring in much income, but when a library is offering thousands of such titles, those $0.38 charges begin to add up. And that’s money HC will never makes if it insists on a $9.95 purchase.

    Universal metered access also has another advantage. If an obscure title briefly gets high-profile attention, within hours there could tens of thousands of metered rentals. No buy-to-loan scheme, printed or digital, can respond that fast. And those who get those download-in-a-minute copies will tell their friends, resulting in still more metered charges.

    –Michael W. Perry, author of Untangling Tolkien

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