In Defense of Library Lending

From Publishers Weekly:

The Hachette v. Internet Archive case has been in the press lately following the parties’ filing of summary judgment motions. But the case is not about the end of copyright as we know it, as Copyright Alliance CEO Keith Kupferschmid implied in his July 18 PW Soapbox, “Standing Up for Copyright.” Nor is it a “torpedo” aimed at the Copyright Act, as AAP CEO Maria Pallante said in a recent PW q&a. Rather, the case concerns the special role of libraries to provide open, nondiscriminatory access to books.

At issue in the publishers’ lawsuit is a practice called controlled digital lending, the principles of which my colleague Dave Hansen and I codified in a 2018 white paper. Under CDL, libraries (including the Internet Archive) make scans of their legally acquired physical books and loan the scans in lieu of the print under rules that mimic physical lending: only one person can borrow a scan at a time; the scans are DRM-protected; and only one format can circulate at a time to maintain a one-to-one “owned-to-loan” ratio. In other words, if the scan is checked out, its print counterpart cannot circulate, and vice versa.

As librarians see it, CDL is a traditional checkout function adapted for the needs of the modern library user. Under the Copyright Act, libraries have always been free to lend the books they have legally acquired without permission or having to pay additional fees. So why are these major publishers suing over CDL?

Because some publishers want to force libraries into a world in which digital books can’t be owned and can only be licensed (through services like OverDrive, for example), usually at significantly higher prices and under restrictive terms. Central to their lawsuit, the publishers argue that a library loan via CDL represents a lost license fee. And while I understand why these large corporate publishers would like to force libraries into an expensive, limited, non-negotiated, and highly profitable licensed access market for e-books, libraries should not have to buy (and rebuy) expensive, time-limited licenses to provide digital access to the physical books they have already purchased.

In her PW q&a, Pallante claimed that CDL will “irrevocably weaken the ability of authors to license their works.” In fact, a scan of a legally acquired print library book loaned under CDL does not negatively impact the market for publishers or authors. To the extent that a library loan has any impact on the marketplace, a digital loan under CDL is no different than the loan of the print book. Look at it this way: no one disputes that a library can mail a print book it owns to a patron. With CDL, libraries can now deliver access to their physical books using a more efficient means: the internet. And if a book’s digital checkout under CDL is controlled to function just like the physical checkout, what difference does it make whether a patron borrows the library’s physical book or the library’s scan of that book?

Pallante suggests such efficiency is a bad thing, citing the publishers’ long expressed desire for “friction” in digital library lending. But having legally purchased their physical books, the IA and its partner libraries are entitled under copyright law to lend them. Nothing in the Copyright Act requires there be any amount of friction in the lending process. Copyright law does not protect friction.

It is time for the major publishers to stop treating each library loan as a lost consumer sale. In his Soapbox, Kupferschmid complained that the IA has “amassed a collection without paying the rights holders a cent.” In fact, the books were paid for. These are the books that sit on our libraries’ shelves or in our off-site repositories. They were all purchased by a library or otherwise legally acquired, and the authors were all paid in accordance with their publishing contracts. Furthermore, this is what libraries do: amass and preserve collections that serve an important, fundamental purpose in society long recognized and valued by the public, courts, Congress, as well as by publishers and authors.

Link to the rest at Publishers Weekly

PG says traditional publishers still hate ebooks, even though ebook license revenue includes virtually none of the costs associated with dealing with printed books – printing, warehousing, shipping, dealing with returns of unsold books, etc., etc., etc.

To maximize profit in a perfect publishing world, a savvy publisher would go ebook only and be a pure ecommerce company.

Of course, more than a few intelligent authors would wonder whether they really needed a publisher when they could upload their ms. to Amazon and receive a much larger share of the selling price.

PG is not privy to the conversations traditional publishers are having among themselves, but he suspects they are very worried about their financial futures. They’re riding a sick horse if they keep trying to prop up printed book sales other than on a POD basis. Traditional bookstores won’t all disappear overnight, but PG anticipates there will be a drip, drip, drip diminution in the number of physical bookstores.

He’ll put up a quote about this right after he posts this item.

27 thoughts on “In Defense of Library Lending”

  1. The problem with the Internet Archive Library is two fold:
    1- pbooks are a distinct product from ebooks. Buying one confers zero rights to the other.
    2- The archive is allocating to themselves ths “right” to “controlled digital lending” uniaterally without input or permission from the copyright holder.

    Either or both propositions require Congressional approval.
    And while the Executive branch has been regularly usurping the prerrogatives of the Legislative branch, the IA and friends are neither. Their theory has as much legal validity as the “sovereign citizen” myth.

    No amount of obfuscation will make either myth real.

  2. To maximize profit in a perfect publishing world, a savvy publisher would go ebook only and be a pure ecommerce company.

    With no paper, what is the publisher’s competitive advantage in the market?

    • Their backlist. Sunk costs, pure revenue.
      We’re talking 100K titles or more in some cases.
      Just look at all the money going to Harlequin refugees. Torstar milked them for one print run, happily reverted the rights. At least they got rid of the carcass while it was still worth something to a bigger fool.

    • Once you move outside of commercial genre fiction, traditional publishing still has a lot of cultural prestige, and by implication so do traditionally published books. I have no expectation of making major money from writing about early baseball history. The market simply isn’t there. So while I certainly have no objection to making major money, that is not why I write them. Rather, there is a conversation stretching over a century, and I have things to contribute to this conversation. I could self-publish these contributions, but that would guarantee their quietly sinking beneath the waves with barely a ripple. Traditional publishing is part of the cost of entry: a prerequisite to getting noticed. They may no be true forever, but it is true now.

      Academic monographs are the most extreme example of this. In many disciplines, this is a critical element of a tenure candidacy. A self-published monograph, no matter how brilliant, would not count. Indeed, it would count negatively. The people voting on your candidacy are not experts in your sub- sub- field. They lack the background to read that monograph and judge how good it is. This is farmed out to the academic editors.

      I am not bucking for tenure anywhere, so this is not an issue with me, but I interests are a weaker form of the same phenomenon. Outside the specific field of commercial genre fiction, being traditionally published still carries weight.

      • This realm will endure long past tbe BPHs.
        It’s no different than the leather bound classics, really.
        Low volume, high quality, decent margins.

        The problem the big tradpubs refuse to acknowledge is their business is low margin bulk sales with serious supply chain costs barrelling ever higher. The only technical solution is digital first rather than hardover first, which they reject, but in a stagnant business there isn’t going to be much demand for $40 new releases. Coming within five years. If not sooner.

        • I have no idea what you mean by “hardcover first.” This certainly isn’t true in a chronological sense. Ebooks are routinely released simultaneously with the hardcopy edition. It seems to be an article of faith that traditional publishers hate hate hate selling ebooks, and are only reluctantly dragged into it. Within publishing circles this belief is regarded as something of a head-scratcher. A sale is a sale.

          $40 new releases: Are these really a thing, outside of academic publishing and specialty areas such as art books? As it happens, I bought a new release novel just last Saturday: Ithaca, by Claire North. (It is excellent, by the way.) It is as traditionally published as it gets, in hardcover with a traditional binding, published by an imprint of Hachette. The hardcover lists for $28. Too pricey? The trade paperback is $18.99. Prefer an ebook? $13.99. This is for a book released earlier this month.

          This is a book that I could well have bought in ebook. I probably would have, had it first come to my attention while I was on my Kindle. But there are other sorts of books, mostly nonfiction, that I routinely buy in paper. Ebooks work great for the sort of book where you start at page one and go straight through to the end. They work progressively less well for books where you might be flipping back and forth, or open on your desk with three other books also opened to specific pages. And anecdotally, my fourteen-year-old (whom I passed Ithaca onto, after I finished it) prefers paper books across the board.

          Within the realm of commercial genre fiction, ebooks dominate over paper books. Move outside this realm and it is considerably less clear.

          • My beef isn’t commercial fiction pricing. I’m currently looking at $60+ prices for books I assume must be part of the textbook-price-inflation world. (This includes ebook editions.)

            I’m not a college student — I just want to read the damn things. And they’re not going to be available in any non-academic library for lending.

            This is the “captive audience” issue. It’s predatory for students who are forced to buy them, and effectively exclusionary for everyone else.




            • Have you looked at used prices for really old editions?

              Most textbook publishers continually revise them, not because anything has changed, but to limit the impact of used book sales. The schools require the current edition, so the price of previous editions drops precipitously.

              • Oh, yeah, but as you can see from the examples, that doesn’t help much. These aren’t as textbook-mainstream as, say, “Elementary Particle Physics 101”, but they fall into the same pricing, with few or no used copies in the market.

                So — niche market, but because they are perhaps grad school books, same predatory pricing.

                What puzzles me is… If I were a poor student facing textbook prices, I would never buy the ebook, since I can’t resell that. So it sure seems to me that there’s a lost opportunity to have a much lower ebook price — better for a publisher to get some money, than a lost sale to a student buying a used print edition. Not all titles churn out annual update editions.

            • Agreed, Karen.

              I still get angry at the costs of required texts when I was in college. I always bought used then sold them back to the bookstore where I bought them at the end of the class.

              When I was shopping for used textbooks, I tended to purchase ones with more than a bit of underlining, which were often priced lower. That saved me more time, assuming that the person who had done the underlining was a good student.

              In law school, the textbooks were even more overpriced since most were casebooks which were largely made up of lightly-edited case opinions issued by state and federal appellate courts. That was even a worse racket than undergrad textbooks and was, effectively, a shared monopoly between one large publisher and a couple of smaller ones.

          • Hardcover first means hardcover processes and economics determine everything from schedule to retail pricing.

            Your point of simultaneous release is ample proof: there is a three month or longer period between the moment the book is finalized and sent to China to be mass printed and the release date of both editions. Meanwhile, the ebook could be out earning money and gauging actual pbook sales potential for those three months, with a higher profit margin and less upfront capital investmentinvestment.

            In the Indie world, most often digital goes first, with POD trade paperbacks simultaneously or a bit later, followed much later by audio and (maybe) a limited edition hardcover if sales suggest it’ll fly, usually as an xmas gifting edition.

            Digital first means faster to market and less capital tied down.

            • Meanwhile, the ebook could be out earning money and gauging actual pbook sales potential for those three months, with a higher profit margin and less upfront capital investmentinvestment.

              Those first sales go to a very important consumer segment. These are the people who are willing to pay the most for the book. The publishers have always been sliding down the demand curve, trying to capture as much of the willing cash as possible.

              If the high rollers spend instead on the earlier eBook opportunity, a significant support for paper sales disappears. Erosion of paper sales means erosion of the publisher’s competitive advantage.

              Analysis that exclusively looks at the marginal costs and revenue of the two formats misses the effect on future income statements.

          • A sale is indeed a sale. However, if all publisher sales go eBook, what expertise do publishers have in Books that lots of others don’t have? In paper that have a huge advantage.

            All eBook sales mean the end of publishers. What value do they add to an eBook that a sharp independent author cannot add?

            There is a notion that publishers can get out of this mess by employing the Fallacy of Composition based on what someone did, abandoning what authors say is stupid stuff, and doing what authros say is smart. Details? We don’t need no stinkin’ details.

            Lost in all this is consideration of the idea that the publishers objectives are not the same as the objectives the authors wish the publishers had.

      • Good points, R.

        However, the more books (of all sorts) that people buy from Amazon, the less importance a publisher’s imprimatur will have.

        I do acknowledge what may be an atypical quirk, however — I have never paid attention to the name of the publisher of a book I’m considering or reading. It’s not for a lack of exposure to traditionally-published books – one of the ways I worked my way through college was working in the university library and I’ve always been a voracious reader of almost anything I could put my hands on, including several decades before the appearance of ebooks.

        Perhaps it’s a part of the way my mind works. I remember the names of the publishers of authors I’ve represented in disputes, etc., involving the publisher (as well as the name of the publisher’s general counsel in some cases), but that’s lodged in the business portion of my brain along with the names of legal publishers (who are world-class sharks, much more voracious than commercial publishers).

        In the reading for education or pleasure portion of my brain, the publisher is treated as irrelevant.

        • I don’t think the vast majority of readers identify individual publishers. There are exceptional circumstances. Who published that academic monograph can matter a great deal to the tenure candidacy, and the identity of the publisher of my first book helped establish my credibility in discussions with other publishers. But for most readers, who is the publisher is less important than that there is one. I have on more than one occasion had people look at my book and remark that it was published by a “real” publisher, this clearly raising the enterprise in their eyes. Look at how many self-published writers, especially of non-fiction, try to make it look like the book is traditionally published. Here is an example. The Amazon page lets the cat out of the back, but use the Look Inside feature and look at the title page. If the prestige of a traditional publisher is lost, it will be because books like this (which is, by the way, comically bad) have successfully obfuscated the distinction.

          • Publishers *used* to be brands with genre readers.
            Harldquin for one.
            In SF, Doubleday used to be used to be synonymous with quality SF, DelRey with great modern fantasy, DAW and BAEN with adventure SF. They had distinct identities tied to their top editor.

            Today the only brand of these that retains reader loyalty is BAEN.

            The others, for one reason or another, have frittered away their credibility.

            People *will* buy a book by an unknown on the basis of the brand and the blurb more readily than other publishers. In some cases they will pass on a title by a known BAEN author released through a different publisher. I know I do.

          • If the prestige of a traditional publisher is lost, it will be because books like this (which is, by the way, comically bad) have successfully obfuscated the distinction.

            Of course. That’s exactly what is happening.

            • Perhaps we are heading in that direction, but we aren’t there yet. Take note of the books featured in the excerpts PG posts. How many are self-published? I won’t say the answer is zero, but it is close.

              • The fact that I never paid any attention is a truly unreliable sample size, but I confess to never thinking about it.

      • Niches are a competitive advantage for the independent author. They can cater to smaller groups at a profit, and they can do it very well. And while one is reading about Shoeless Joe, they are not reading the latest John Grisham. The competition is for eyeball hours.

        I agree there is a legacy effect the publishers can exploit, but in eBooks, how do they do it? How many consumers pay attention to the publisher. To date, publisher eSales sites have not fared too well. Amazon retains the network effect.

  3. My standard comment every time this subject comes up: Any argument that pretends that there is no difference between a digital file and a physical book is either disingenuous or requires a peculiar sort of stupid.

      • I would be very interested in seeing examples of the traditional publishing side in this debate arguing that there is no difference between a digital file and a physical book.

        • None of us will live long enough to see that.
          First Congress would have to write a law that might pass. They haven’t and it won’t.

        • A library has to have X copies of a paper book to have X simultaneous loans.
          Hence, a library should have X licenses for an eBook to have X simultaneous loans.

          However, I grant that framing the proposition as saying their is NO difference certainly gives you a winning position. .

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