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Will “artificial scarcity” of library e-books push sales?
Nov 12, 2019

Will “artificial scarcity” of library e-books push sales?

Librarian Jessamyn West doesn't think it's going to work out for publisher Macmillan that way.

Some 94% of libraries offer e-books to borrowers. But now one of the five biggest book publishers in the United States, Macmillan, says it will limit each library to just one copy for the first eight weeks after publication. So get ready for longer waits to borrow. 

Libraries and their users are protesting the move; nearly 200,000 people have already signed an online petition against it. I spoke with Jessamyn West, a librarian in Vermont, who says the move is reflective of a lot of upheaval in the book world right now. The following is an edited transcript of our conversation.

Jessamyn West: I think publishers are wondering what to do about their revenue model as more and more people go many more different places for content than just the bookstore. Amazon encourages them to lower their prices and lower their prices because they’re the 800-pound gorilla in this whole thing. They’re looking at ways they can recoup some of the money they lose, and in many ways, some publishers look at libraries as if we’re taking money from them by lending the books instead of making people buy them. Macmillan is basically taking a risk — that if they enforce this artificial scarcity by not letting libraries lend their books, more people will go out and buy their books.

Jack Stewart: Macmillan CEO [John Sargent] has said in interviews that the e-book marketplace is like that for motion pictures and that new releases have all this excitement around them for the first few weeks, and that’s when they make most of their money through sales. And they need that money to reinvest in new e-books and new authors and illustrators and the whole ecosystem. Isn’t that fair?

West: Libraries are willing to pay for these books. I don’t understand why they are looking to libraries and saying, “Oh, well, we know you want to buy dozens, if not hundreds, of copies of these books right after they come out. But instead, we think we’re going to put the squeeze on your patrons — and in fact, one of our sources of free advertising now that there’s fewer bookstores — and not take your money in order to try to make it this other way.”

Stewart: Can you suggest a change that would keep everybody happy, that would give libraries enough copies of the books but also keep publishers happy?

West: I don’t understand what the problem was originally. Sell books to libraries, that’s free advertising. Macmillan is trying to get patrons to buy books from them directly. I actually, No. 1, don’t think it’s going to work out that way for them. No. 2, [I] think it puts a squeeze specifically on more disadvantaged patrons in libraries, people who maybe can’t read a print book for various reasons. Those people are not necessarily going to be the people who would go and purchase those books. So what it’s really doing is denying certain readerships access to their books, who would otherwise be happy to have them through the library, which would be happy to pay for them.

Stewart: And just give us an idea of how important a publisher Macmillan is. How much will patrons of a library feel this change?

West: It’s going to be really interesting. Right now, libraries are just sitting and waiting. The embargo basically went into effect a week ago. Some major library systems, King County, notably, in Washington state, has decided to just not purchase Macmillan e-books because they’re grumpy about this, and I don’t blame them. But we’re not sure. I think if you asked most patrons: “What does Macmillan publish? Who are their authors?” they wouldn’t necessarily know, and it puts libraries in this really awkward position of having to explain this relatively complicated situation about the marketplace to patrons who really just want a good book. I’m hoping libraries can react, especially by buying more print materials. But we’re really not sure how it’s going to affect readership and attitude towards Macmillan, or the other publishers, or e-books generally, until we see how this plays out.

Stewart: Do you think there’s a chance here that Macmillan might end up backpedaling on this?

West: I do, I think it’s entirely possible. Sargent, the CEO of Macmillan, was recently speaking at a meeting of the heads of state libraries — every state has a state library or department of libraries. The heads of those state libraries are grumpy about this, too. I mean, really, what it’s about is access, and this is withholding access from the public in a general sense. He trotted out his old, “This is why it’s a better deal. We’re totally trying to help libraries, and you know that first copy we let you have, it’s cheap and it doesn’t expire. So that’s super cool.” Kind of restating his statement. I think the state librarians in many cases weren’t having it. They pushed back in their kind of friendly, mannerly way, and Sargent did open the door for, “Maybe this isn’t the right way to do things,” which is not anything we’ve heard him say previously. I see that as a ray of hope. [Macmillan] basically based this embargo on an experiment they did with one of their imprints, which was Tor Books — they tried a smaller embargo as a test. But Tor Books also publishes a lot of science fiction fantasy. They have a rabid fan base, who maybe would purchase those books if they couldn’t borrow them at the library. But realistically, I don’t think that’s going to happen for the rest of Macmillan’s frontlist. I think what we’re hoping is this embargo experiment will not go the way they want and maybe they can dial it back to having something that’s more in line with the way other publishers appear to be making this happen and also making it work for them from a business perspective, so it would work for us from a library perspective.

Stewart: You call this an experiment. Do you think we’re likely to see more of these types of conflicts as e-books perhaps become more and more important and more people use them as a way of accessing literature?

West: It’s funny, actually. The e-book readership in many ways, we think statistically has plateaued. Now we’re at a stasis where people are reading print books — millennials love print books. We’re also seeing people reading e-books. E-books definitely have some advantages over print books, but there are people who like to read print. I think we are going to see many publishers, especially the Big Five publishers, continue to try and tweak how they make e-books available to libraries, because it’s one of the more flexible things in your revenue stream that you can adjust. But I do think we’ll see people trying to form, like Penguin Random House, effective, useful partnerships for libraries. As I said before, with bookstores dwindling and print books still popular and e-books continuing to be popular, libraries are one of the places people get exposed to new books and new authors. It’s free advertising for publishers, and I think we can find symbiotic ways to move forward with this so that people can get the e-books they want, the print books they want and just get access to the information they want and the information they need.

(Joel Saget/AFP via Getty Images)

Related links: More insight from Jack Stewart

The distinction between e-books and physical books for libraries is fascinating. Libraries must pay a premium to buy an e-book, so they’re often around $60, and then the number of loans is limited, so they expire, and libraries have to repurchase them. A librarian at Cheshire Public Library in Connecticut has written a great explainer that delves into the restrictions set by the Big Five publishers. 

Wired looked at the fallout of the Microsoft bookstore closing earlier this year. Customers’ libraries of books they might have thought they purchased, but really only had a licence for, disappeared.

The issue around digital rights management — and fear of piracy if files aren’t protected — reminds me of the debates around digital music when that started taking off. Apple’s iTunes was already a major player about a decade ago, thanks to the popularity of the iPod, but you never knew if you could move a music file to a different device or computer and expect it to work. In 2009, Apple announced it was going to remove copyright restrictions on all songs, with the backing of the music labels. The New York Times had all the details at the time.  

Today, the debate has moved on to streaming and artist payments. The digital rights conversation hasn’t exactly been muted, but it’s more muffled.

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