From Digital Book World:
Denmark experienced rapid growth in digital lending from libraries between 2011 and 2015. At first this was a welcome source of new revenue for publishers. But by the middle of 2015, the digital lending market had grown even larger than the commercial market for digital book sales. Similar to the New York Public Library app, SimplyE, the national Danish library launched its own digital lending app, eReolen, which considerably simplified ebook borrowing, allowing users to borrow and read in just one click, increasing the amount of digital books borrowed.
Mofibo, the leading subscription service provider in Denmark, told book business news outlet Bogmarkedet that 16 percent of the provider’s customers said the reason they terminated their subscriptions was that they were able to get the same books for free at the library. At this point, an increased opposition from publishers and local resellers of ebooks started moving from the director’s office to the media.
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By late 2015, the third largest publisher in Denmark, Politikens Forlag, stepped in and said that they were willing to completely withdraw their books from the libraries if a new way of lending digital books was not found. At that time, the publishing director of Politiken Forlag, Lene Juul, said to the newspaper Berlingske(loosely translated): “The lending of digital books has grown rampant. The trend at the eReolen, where books can be lent for free to the consumer, is a slippery slope that has to be stopped now, because it can have devastating effects for the development of the book market in general.”
In Denmark, the libraries have a legal right to lend books without having to get permission from publishers. However, this is not the case for digital books, and by late 2015 the publishers decided to use this to their advantage. Many of the largest Danish publishers, like Gyldendal, withdrew their books from the libraries by the January 1, 2016.
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It would appear that the withdrawal of the large publishers had the desired effect. Digital books sold now account for about 67 percent of the market relative to library borrows in Denmark.
In neighboring Sweden, lending has continued uninterrupted for several years, and an estimated 72 percent of all ebooks consumed are borrowed from the public libraries. This has put pressure on the market, driving down the prices of digital books. Today the average sales price of an ebook relative to its paper cousin is 28 percent lower (including VAT), and that is even taking into account that physical books have a VAT of 6 percent compared to the 25 percent on digital books.
When looking at possible solutions for finding a natural equilibrium between the public sector and the private market, publishers have begun campaigning for the introduction of limits on the amount of loans made by libraries. One of the suggested solutions is to introduce “friction” when users borrow books. However, it is never a good solution to structurally disappoint the public by making them wait months for their books or use a complicated borrowing process.
Link to the rest at Digital Book World