Home » Big Publishing, Ebook Borrowing/Lending, Ebooks, Libraries » Why Angry Librarians Are Going to War With Publishers Over E-Books

Why Angry Librarians Are Going to War With Publishers Over E-Books

13 September 2019

PG has mentioned this brilliant strategy from Macmillan here and here, but under the principle that you can’t celebrate Big Publishing stupidity enough, here’s more.

From Slate:

If I wanted to borrow A Better Man by Louise Penny—the country’s current No. 1 fiction bestseller—from my local library in my preferred format, e-book, I’d be looking at about a 10-week waitlist. And soon, if the book’s publisher, a division of Macmillan, has its way, that already-lengthy wait time could get significantly longer.

In July, Macmillan announced that come November, the company will only allow libraries to purchase a single copy of its new titles for the first eight weeks of their release—and that’s one copy whether it’s the New York Public Library or a small-town operation that’s barely moved on from its card catalog. This has sparked an appropriately quiet revolt. Librarians and their allies quickly denounced the decision when it came down, and now the American Library Association is escalating the protest by enlisting the public to stand with libraries by signing an online petition with a populist call against such restrictive practices. (The association announced the petition Wednesday at Digital Book World, an industry conference in Nashville, Tennessee.) What’s unclear is whether the association can get the public to understand a byzantine-seeming dispute over electronic files and the right to download them.

In a July memo addressed to Macmillan authors, illustrators, and agents, the company’s CEO John Sargent cited the “growing fears that library lending was cannibalizing sales” as a reason for embargoing libraries from purchasing more than one copy of new books during their first eight weeks on sale. “It seems that given a choice between a purchase of an ebook for $12.99 or a frictionless lend for free, the American ebook reader is starting to lean heavily toward free,” he claimed.

Many individual library systems and companies that work with libraries swiftly responded with objections. “Public libraries are engaged in one of the most valuable series of community services for all ages, for all audiences,” said Steve Potash, the CEO and founder of OverDrive, a company that supplies libraries with e-books. “The public library is just something that is underappreciated. It certainly is so by Macmillan.”

. . . .

“If you think about equitable access to information for everybody, there shouldn’t be discrimination or anything like that,” said Alan Inouye, the senior director for public policy and government relations at the ALA. “So consumers can get this book on Day 1 without limitation, but libraries have to wait for eight weeks? That’s just very wrong.”

. . . .

The controversy over Macmillan’s new policy gets at one of the central issues facing book publishing today. “There’s a tension in e-book pricing generally between consumer expectations that a digital file will be less expensive than a physical copy and the reality that very little of the cost of making a book is tied up in the physical format,” said Devin McGinley, a senior industry analyst covering book publishing for Ibisworld Inc., a market research firm. “Publishers are rightly concerned that if the price of books erodes too much, they will no longer be able to cover their creative costs and subsidize more speculative bets on emerging authors.”

. . . .

“They really did not have any reasonable data to support a narrative that if an author’s new book is withheld from public library lending when it first comes out, that might impact the author’s or the book’s sales during those first few months,” Potash said. “That isn’t borne out. The data that OverDrive has is that for every title that actually gets borrowed or downloaded, the library is engaging with dozens and dozens of readers who are discovering the book, sampling the book, or just looking for a recommendation on what to read next.” Potash said that studies consistently show library patrons to be more frequent book buyers overall—which is another reason Macmillan’s letter stung. “They are taking their readers, their customers, their fans, and intentionally trying to frustrate them,” he said.

Link to the rest at Slate

PG will state that whenever a business executive talks about making a decision to avoid “cannibalizing sales,” you will find many other stupid words and acts following shortly thereafter.

Steve Job famously said, “If you don’t cannibalize yourself, someone else will.” He made this comment when Apple was selling a lot of iPods, and had just announced the iPhone.

Did the iPhone cannibalize Apple’s iPod business? You bet. Were any Apple shareholders upset by this cannibalization? Not really. The iPhone would make Apple the most valuable company in the world.

The first iPhone was announced in January, 2007, and went on sale in June, 2007. One year after the announcement of the first iPhone and six months after its launch, in January, 2008, the value of a share of Apple stock had almost doubled. About six months later, in July, 2008, when Apple launched the iPhone 3G (the first iPhone with an app store), the stock value was 285% of the price only 18 months earlier.

Not many people were worried about iPod sales at that point.

From an interview with James Allworth, the co-author, with Clay Christensen and David Skok, of a new Nieman Reports article called “Breaking News– Mastering the Art of Disruptive Innovation in Journalism.” The Harvard Business Review published a transcript:

Well, if you can see a way of cannibalizing your existing business, then chances are somebody else can see that same opportunity too. And if it’s a choice between you or your competitor cannibalizing that business, I think in almost every instance you will be better off in the long run if you yourself choose to do it.

Link to the rest at The Harvard Business Review

Back to Macmillan, once a book is completed, PG will note that each copy of an ebook that Macmillan licenses to a user costs the company essentially nothing. This cannot, of course, be said about a printed book, each one of which carries costs for printing, shipping, warehousing, handling returns of unsold books from bookstores, etc.

PG suggests that an intelligent executive would be happy to cannibalize the sales of more copies of costly printed books by selling costless ebooks.

 

Big Publishing, Ebook Borrowing/Lending, Ebooks, Libraries

64 Comments to “Why Angry Librarians Are Going to War With Publishers Over E-Books”

  1. Can someone tell us why the policy is stupid? The statements from the library representatives certainly don’t, nor does the subsequent commentary.

    What is the effect of library lending on sales? Who can quantify it?

    And why should we care if someone can’t borrow a Louise Penny book as soon as it is available on retail? How is it in our national social interest for Heather Schwedel to read Louise Penny eight weeks earlier than the policy allows? Heather is free to click the Amazon buy button as soon as the book is released.

    Any reason we should strive to get Heather Schwedel an incrementally free read?

    • Well, actually, it’s stupid on both sides.
      Libraries are just whining for being abused, yet still do business with the abuser.

      For MacMillan it is stupid because libraries are one of the few true discovery channels that work, outside NYC. It is also cheaper than the “traditional” advertising channels, since the typical library ebook only garners three to four reads per over-priced *paid* copy, per Overdrive.

      Lots of studies prove libraries (and KU, for that matter) are cheap brand builders. As the OP says, library readers are also heavy buyers. So while Stephen King is unlikely to gain a significant number of new readers in libraries, first timers and midlisters will.

    • Terence OBrien,

      What is the effect of library lending on sales? Who can quantify it?

      I have done this at least a half dozen times before. Likely I shall have to do it again. When will they ever learn?

      Eric Flint quantified the effect of ‘free’ on sales.

      [W]ith Jim Baen’s co-operation, we set up the Baen Free Library on Baen Books’ web site, which now has dozens of titles from many authors made available for free to anyone who wants them. (If you’re not familiar with the Library, you can find it by going to Baen Books web site—www.baen.com—and selecting “Free Library” from the left side of the menu across the top.)

      The titles are not only made available for free, they are completely unencrypted—in fact, we’ll provide you free of charge with whatever software you’d prefer to download the texts. We make them available in five different formats.

      And…

      The sky did not fall. To the contrary, many of those books have remained in print and continued to be profitable for the publishers and paying royalties to the authors. For years, now, in some cases. Included among them is my own most popular title, 1632. I put that novel up in the Baen Library back in 2001—six years ago. At the time, the novel had sold about 30,000 copies in paperback.

      Today, six years after I “pirated” myself, the novel has sold over 100,000 copies.

      Ref: https://www.ericflint.net/index.php/2011/09/26/salvos-against-big-brother/

      You get that? After Flint made 1632 free, it sold more than twice as many copies as before.

      Flint added a table later. The post is exceedingly long. To find the table search for ‘Period Sales’. It is worth the time it takes to decypher it.

      I admit Flint does addresses piracy vice library sales, but I suggest the two are analogous. What Flint did fifteen years ago was to pioneer the first-in-series-free marketing method that is now prevalent in indie publishing.

      Of special and pertinent interest is that sales increased on the book that Flint made free.

      Piracy, first-in-series-free, library sales — all address what is now the overwhelming challenge for authors: Discoverability.

      Readers will not buy your book if they do not know it exists.

      I hope I did not stretch the analogy beyond its limits of usefulness, but I see reasonable inferences here. Piracy, first-in-series-free, library sales — all these increase discoverability and increase sales.

      YNMV.

      • I don’t have a hard and fast figure – but I estimate that I have personally spent several thousand dollars acquiring the books of authors that I initially discovered in libraries. Starting with Heinlein, Asimov, and Clarke in elementary school.

        However, I don’t do that any longer, as libraries rarely have anything of enough interest that I’m willing to even take a chance on reading for “free” (there is still the round trip in time and fuel to consider, at least for physical books).

        Other than reliable friends and acquaintances, KU is my discovery method these days.

      • No, you didn’t stretch it *enough*.
        Kindle Unlimited is also part of the “no risk access” equation. And, unlike permafree, but like libraries, it offers some payout on top of discoverability.

        These are the only discoverability tools that actually work today. But the corporate publishers are still wedded to the old ways of NY-centric media and payola, thinking that because *they* see the ads and books, they work. Fact is, they aren’t even effective in NYC. The only people who see what passes for establishment marketing, is the establishment.

        In the meantime, consumers spread their attention and *money* all over. Population has grown 30% since 2003 while all of US publishing, including trade publishing, has been flat. The numbers are all over. The old ways don’t work.

        It’s all about the eyballs and mindshare.

        And now, they are looking to squeeze out the one discoverability tool they still have. As I said above: stupid.

        And equally stupid, libraries beg and whine instead of realizing the power they do have. They should be setting the rules not begging to be allowed to overpay.

      • On rereading, I realize that I may not have been clear.

        Before Eric Flint made 1632 free, he sold ~30,000 copies according to his royalty statements from Baens.

        After Flint made 1632 free, he sold ~70,000 copies more according to his royalty statements from Baens. That statement did not include free downloads. Those were straight-up paying sales.

      • but I see reasonable inferences here.

        Of course there are inferences. But there is nothing that provides quantifiable and replicable information on the material effect of library lending on sales.

        For inferences, far better than that is the experience many of us had in the past with making books free on Amazon KDP Select. Free books led to lots of cash sales of the very same book. I’m still driving around in the profits from those golden days.

        But neither set of inferences tells us anything about the effect of library lending on retail sales. Anyone care to make a positive statement on it? Do they increase sales, decrease them, or have zero effect. How do you know?

        • Terence OBrien, IMO you make a demand that cannot be met.

          Once upon a time, I did statistics for living. All the math I learned in college? That was the easy part. The hard part was figuring out what to collect and how to collect it. Once I spent 3 weeks looking for a way to get the data I wanted, and I knew what data I wanted and where it had to be. So I got experience in this field, okay?

          I cannot see any way to tie library lending to sales. Between the lending and the sale there is the independent and uncontrolled variable of the reader. To make it worse, even if the reader buys, that purchase may come after a delay of months. Is that purchase connected to the library read? Yes. Is it quantifiable? Oh, hell, no.

          What about sales of the author’s other books? Did a library read of Harry Potter and the Philosopher’s Stone spur a purchase of Harry Potter and the Chamber of Secrets? Damned likely but how do I ‘quantify’ that?

          If I had the data on library reads, I could correlate that to sales. I imagine the confidence interval would be so broad that the exercise would not be worth the candle, but I could do it. (FYI narrow confidence interval = good; broad confidence interval = bad.) But how do I get the data? Knowing what data I need is relatively easy. Getting it may be impossible. In this case, IMO it’s impossible.

          What is the effect of library lending on sales? Who can quantify it?
          If inferences are not good enough for you, then — in my professional opinion — the answers are —
          — no one knows, and
          — no one can.

          But my gut tells me that the idea that library reads cannibalize sales is utter, complete, head-up-ass idiocy. I want to put numbers to my gut feeling, but I cannot figure out how.

          • Well, as a thought experiment…

            Not all libraries buy all books, so you would start by separating libraries that buy the book from those that don’t. Obviously this wouldn’t work with “hot” releases; you’d have to look at the mid-list. Their circulation numbers would be nice to have, too, but I don’t think absolutely necessary.

            Next, you would get the detailed sales figures for each book in bookstores in the service areas of each library.

            You would also need at least Amazon’s sales figures, perhaps some of the other online stores, for the same books to the same service areas.

            These would (probably) give you enough data to manage at least a rough statistical analysis (with a reasonable confidence level).

            Of course, the first requirement would be difficult – the other two, forget about it, not going to happen.

            • Libraries whose patrons are limited to specific zip codes vs Amazon sales for those zip codes? Great place to start.

              • Terence OBrien, Okay. You collect those data, and I’ll run the stats for you. Good luck.

                • Love to, but I lack the professional credentials and counting skills to collect anything.

                • Terrence OBrien, Every job is easy if someone else has to do it.

                  I told you before, I tell you again, as a former professional in statistics, meaningful data cannot be collected. I was going to add ‘except at exorbitant price’ but I think it cannot be collected at any price. Who has the complete unit sales data? Will they hand it over? Is the unit sales data broken out by zip code? (Hint: Not very bloody well likely.)

                  But go ahead. Prefer your ignorant, inexperienced, and uninformed opinion to my professional one. But give thanks to God that the commanding officer of the United States Air Force Satellite Control Network preferred my opinion to others. My stats improved your security and reduced the costs of providing that security. Likely they still do.

                • And I told you before, and I’ll tell you again, I’m an uneducated half-wit with no special experience or expertise, so I can’t match credentials. Even worse, I am so lazy I have experience in nothing, okay?

                  Ignorant, inexperienced, uninformed, and lacking in respect for my betters. That’s my lot in life, it’s my story, and I’m sticking with it.

                  And thank God for Zinny Pensky. If he hadn’t known how to tap a keg that day, we all would have just sat at the beach looking for the “On” switch. True heroes are made, not born.

          • I cannot see any way to tie library lending to sales.

            I can. Its a simple substitution effect. A good is available on the retail market. Now another very similar good becomes available at a lower price. Consumers switch from the retail good to the new good. That's the same independent and uncontrolled consumer we encounter everywhere.

            It happens all the time. That's what happened with eBooks. Paper was available. EBooks became available. Consumers had a choice, and many chose eBooks. It happens with competing goods everyday.

            And your professional opinion? I'm an uneducated half-wit with no special experience or expertise, so I can't match credentials. Even worse, I am so lazy I have experience in nothing, okay?

            Nevertheless, I agree with half your professional opinion. Nobody knows the effect of libraries on retail. Nobody knows the effect of libraries on discovery. We acknowledge that the phenomenons exist, but lack information on the magnitude.

            But, I disagree with your professional opinion that nobody can know. There is nothing special about books. We can observe market behavior and see how sales flow under different scenarios. (I include libraries in the book market.)

            We did something similar when independents entered the market. Remember the Tsunami of Swill? The price race to the bottom? The unedited junk? People told us independents could never get a foothold, consumers would reject the junk. And some told us that since human choice was involved, we could never know. Those independent and uncontrolled consumers again. But we did indeed find out. How? We just sat back and observed.

            I welcome MacMillan's new policy. It will give us an opportunity to observe. Will MacMillan sales fall because library patrons no longer discover them and hit the Amazon Buy Button? Will they increase because library patrons have no choice but the retail market?

            God Bless the free market, for ignorance is great motivator.

            • Yes, “similar good substitution” is an economic truth. But this is likely what will hurt Macmillan sales. Consumers will substitute similar goods that are their library for Macmillan books that are not. If there are no boneless center cut pork chops in the grocery store, I will substitute bone-in chops – or, if there are no chops, and that is the promised dinner plan, I’ll go down the street to some other store (or grab the son and make a trip to the base PX).

              One also has to remember that publishers are not just selling books – they are selling writers. To sell a new writer, they have to make that writer discoverable. This policy kills one of the primary (and their least expensive) discovery channels.

              Now, for a very few writers, I don’t think there will be a big difference. Those “lucky, lucky few” into which they invest real money on other discovery channels – Oprah’s Book Club, Good Morning America, front caps in bookstores, etc.

              For the starting mid-lister, though – career death will only come all that much sooner.

              • Yes, “similar good substitution” is an economic truth. But this is likely what will hurt Macmillan sales. Consumers will substitute similar goods that are their library for Macmillan books that are not.

                That is certainly a reasonable suggestion for downward pressure on MacMillan sales, and it’s a function of the discoverability issue. Novels can be very close substitutes.

                Take it a step further, and consider the situation of lots of publishers did the same. That would be great fun since we could then watch to see how the nonconforming publishers who gave libraries wide latitude fared.

                In any analysis all the factors should be accepted. We speculate that some are upward pressures, and some are downward. And the speculation is often quite plausible regarding direction. But the key then becomes magnitude of the pressure. That’s where we don’t know what we are talking about, and it drifts from analysis into advocacy.

  2. Notice that they are still buying MacMillan books, depite the whining.

    Also, note:

    ——

    “With the petition, an extraordinary step in this world, you could argue that Macmillan’s plan is already backfiring, having angered one of its major constituencies. And if the change bears out, there’s the possibility of bigger trouble for the publisher ahead: “Macmillan has a minor e-book market share compared with the other Big Five publishers, so if it is the only publisher to pursue this strategy, it may hurt the publisher’s sales to libraries while causing relatively little inconvenience to library patrons,” McGinley said. Patrons might find, when loading up their e-readers and apps, that there are more than enough non-Macmillan books out there to go around.

    Sounds like any problem lies with the books, not the libraries.

  3. PG will note that each copy of an ebook that Macmillan licenses to a user costs the company essentially nothing.

    I think this would be more correctly described as something with a marginal cost of essentially nothing, given that there’s a whole lot of up-front costs associated with getting a Big 5 ebook to market.

    • Agree. This is the marginal cost fallacy.

      The most common use we see today is with drugs. The actual production cost of a pill might be five cents. That includes material, factory run, factory labor, packaging, etc. However, consumers pay $1. Therefore, activists insist it should be provided to consumers at six cents, benefiting consumers and giving the company a healthy profit.

      For those who see these numbers and agree, the cost of developing, testing, and licensing run into the billions, and are not included in the five cents.

    • There is a difficulty with that, however–namely, the publisher paid most of those costs to put out the deadtree version.
      There are two reasons to price the ebook version of a deadtree book at thirteen dollars: attempting to make up for low sales via high margins or attempting to keep people from buying e-format.
      Neither makes sense from a business perspective, until you remember that the Big Five’s pre-eformat dominance rested on their ability to control access to the means of distribution and production.

      • Problem is, that dominance is gone and not coming back.
        They didn’t cannibalize themselves so others did it for them; Indies, APub, and smaller tradpubs.
        Probably in that order.

      • Neither makes sense from a business perspective, until you remember that the Big Five’s pre-eformat dominance rested on their ability to control access to the means of distribution and production.

        That dominance is a significant competitive advantage. But, note it only applies to paper. Get rid of paper and it’s gone.

        Pricing an eBook at $13 keeps the Age Of Paper alive longer. And in the paper game, the publishers really do have the advantage. EBook authors don’t need them. But paper authors do.

      • There is a difficulty with that, however–namely, the publisher paid most of those costs to put out the deadtree version.

        If the publisher is producing both paper and eBook, how do we assign those costs? I suppose we could say he incurred the costs in bringing the eBook to market. In that case, the $2 printing of the hardback lets the publisher greatly reduce paper prices.

        • Given that most publishers tend to treat eBooks like aristocrats treated the family member who went into trade–and, usually, kept the family afloat–I’d put it the other way ’round.

          • I suspect we would see a financial accounting allocation of development costs to both eBook and paper based on sales volume.

            But, expect the true fans of paper books to use just such a plea as paper loses more and more market share. At some future date, the paper fan will tell us 70% of novels are eBooks, so the publisher paid most development and production costs to put out the eBook.

            Therefore, paper prices should be much lower to reflect the very small cost of printing hardbacks for $2 and paperbacks for $.75. Anything else would reflect unseemly aristocratic inbreeding. The game can be played both ways, and makes no sense from either side.

  4. Buying books is for collectors and home decor… *reading* books, even popular new releases, is basically a tax funded public utility.. It was at one time consdidered that important.

    It’s a pretty big gamble on the parts of publishers to pick this fight. I think they have a good chance of winning in the current environment where so few people consider reading as important compared to pro-business and profiteering policy. *But*… All it would take is for librarians to successfully use this behavior as a means to get legislative exception to DMCA for the purpose of breaking DRM and making purchased ebooks available to patrons. Now *that* would be progress!

    • All it would take is for librarians to successfully use this behavior as a means to get legislative exception to DMCA for the purpose of breaking DRM and making purchased ebooks available to patrons. Now *that* would be progress!

      Good idea. But, I’m sure we wouldn’t want it limited to libraries. I would want to break DRM and sell the top 100 independent books for ten cents each. I figure the volume would make up for the low, but very competitive price.

      Independent authors don’t like it? Who cares. That’s what legislative exemptions are for.

      And that would be real progress.

  5. “If you think about equitable access to information for everybody, there shouldn’t be discrimination or anything like that,” said Alan Inouye, the senior director for public policy and government relations at the ALA. [From the post]

    I have no particular opinion about whether libraries should be able to get their hands on bestsellers hot off the (virtual) presses or not. I DO have an opinion about an official with the library association stating that books (in this case, a novel) are “information.”

    Any further comments on my part would involve language unsuitable for such an esteemed forum.

    • It is indeed reasonable to question why publishers should give a price break on the latest hot romance because the city council is the buyer.

      How is it in the social interest to ensure that thrillers and mysteries are available at no incremental cost to citizens?

      • It is also reasonable to question why publishers should refuse to sell the latest hot romance at all because the city council is the buyer. Or why they should charge several times the price of a normal ebook licence for a file that (unlike a regular ebook) automatically expires after being read a certain number of times.

        Libraries are already paying through the nose, and they are doing it with our money. I don’t see any particular reason why that should be allowed to continue.

        • All those questions are reasonable.

          I’m not sure who it is that allows these things. Who?

          And the fact that they are paying through the nose with our money is easy to solve. Stop paying. What’s so special about our money?

          I pay for things with my own money all the time. And There are lots of things I don’t pay for. I prefer for romance and thriller readers to use their own money rather than our money.

  6. Can someone post the link to sign the petition?
    Libraries were always able to buy as many hardcopies as they could afford to buy and this was self-limiting. Most people still had to wait to get their hands on a bestseller. With new technology we have ebooks. Why should this be treated any differently? Especially now that there are so many other choices instead of bestsellers?

  7. PG suggests that an intelligent executive would be happy to cannibalize the sales of more copies of costly printed books by selling costless ebooks.

    Except that would be capitulating, agreeing that print is going to become niche for many people, agreeing that their head has been in the sand for years.

    The blow to the ego is too huge.

    They have to admit they were and are wrong.

    • Far more likely is that the executive is looking at the cross elasticity of demand for paper vs eBook.

      Just for fun, at the limit, let’s speculate that ebooks cannibalize all paper, and the publisher is left with nothing but eBook sales, and no paper sales.

      At that point, what is the publisher’s competitive advantage? What does he do better than anyone else? What can he do that the independent novelists can’t do?

      I’d say the answer to those questions is, “Nothing.”

      We might also observe that in this eBook world the publisher no longer has the cross promotion of eBooks from paper and bookstore sales.

      So, why should an intelligent publisher rush into that fate? What he does instead is balance paper sales and eBook sales so he makes the maximum profit for the longest possible time.

      Intelligent publishers know just as well as any independent author that paper novels are heading to niche territory. And they chase after dollars just as hard as any independent. The publishers task is to take as much cash out of the business for as long as he can. Managing decline is far more profitable than capitulating.

      Follow the money, not the egos.

      • In a July memo addressed to Macmillan authors, illustrators, and agents, the company’s CEO John Sargent cited the “growing fears that library lending was cannibalizing sales” as a reason for embargoing libraries from purchasing more than one copy of new books during their first eight weeks on sale. “It seems that given a choice between a purchase of an ebook for $12.99 or a frictionless lend for free, the American ebook reader is starting to lean heavily toward free,” he claimed.

        ‘Growing fears.’

        ‘It seems that.’

        This is not the language of a person who actually knows. If Macmillan had hard data showing that their decision is actually the best for profits, their CEO would not be waffling vaguely about his feelings. As usual, you attribute to the Big Five publishers a degree of intelligence and a depth of information that we already know, from abundant other evidence, they simply do not have.

        As for this:

        Intelligent publishers know just as well as any independent author that paper novels are heading to niche territory.

        Fine. Show me an intelligent publisher. Macmillan, who got caught with their pants down colluding with Apple? Macmillan, who tried to play chicken with Amazon and quickly, predictably, and completely lost? That’s not an intelligent publisher.

        • Intelligent publishers would have been selling ebooks since the PDA era, support every commercial ebook format ever known, maintain a moderated online community where their authors could safely engage with readers, sell (digital) Advance Reader Copies at a premium, create ebook bundles to use established authors and popular new releases to help sell newcomers and lesser known authors, maintain their *own* ebook store in addition to the walled gardens, and–more to the point–realize that free digital copies of early series books would increase sales of newer titles *and* the very titles offered up for free. (Because reader goodwill pays off in actual cash. For *print*.)

          We all know who *that* intelligent publisher is, right?

          And it ain’t MacMillan.

          In fact, when one of their imprints tried to copy just *one* of the above, the oh-so-smart publisher execs told them to cut it out.

          Yeah, they’re smart.
          19th century smart.

          Too bad it’s the 21st out there.

          • Why would an intelligent publisher do that? How does fit wit his competitive advantage?

            I’d say that would only accelerate his demise as paper goes away.

            • Because tbey did.
              None of that is speculation but reality.
              The publisher in question is just about the the only one, that can sell decent numbers of an unknown author’s book just on the basis if the publishers’ name. Tbeir brand actually stands for something.

              Most of those listed things they’ve been doing since the last century, growing their digital sales while simultaneously boosting their print prrscence and earning strong reader loyalty.

              There’s more to tradpub than NYC quarter-by-quarter corporate mindsets.

              Here:

              https://en.m.wikipedia.org/wiki/Baen_Books

              “Baen has made liberal use of free content in its marketing efforts. For example, free sample chapters of its books are typically available on the Baen Web site. The “Baen Free Library” allows free access to dozens of titles from the company’s backlist, often the first book published in a series by a Baen author. Baen also provides free electronic copies of its books to readers who are blind, paralyzed, dyslexic, or are amputees.

              Baen’s emphasis on electronic publishing has generated press coverage for the company. In 2001, Wired magazine described Webscriptions as “innovative”.[8] Charles N. Brown, publisher of Locus Magazine, has praised Baen’s approach in an interview in The New York Times, saying “Baen has shown that putting up electronic versions of books doesn’t cost you sales. It gains you a larger audience for all of your books. As a result, they’ve done quite well.”[9]”

              A traditional publisher doesn’t even have to think of these things: just copy them. But they’re not even that smart.

              • Because tbey did.
                None of that is speculation but reality.
                The publisher in question is just about the the only one, that can sell decent numbers of an unknown author’s book just on the basis if the publishers’ name. Their brand actually stands for something.

                That’s the Fallacy of Composition. If it works for one, it will work the same way for all. If it works for one author, then it will work for all authors. If it works for one publisher, it will work for all publishers. If it works for one widget maker, then it will work for all widget makers.

                This leads to a situation where all authors write zombie books, then wonder why it doesn’t work for them. After all, it worked for that one guy.

                • Not in this case.
                  To put it bluntly, the equivalent to your argument would be somebody arguing in the 1860s that a major steel company need not switch to the Bessemer process. We’re talking about some pretty basic stuff here, not management techniques that are going to be affected by corporate culture.

                • No equivalence. Baen has a marketing strategy. There is no reason to believe the exact same marketing strategy will work for all. (There were lots of demonstrable reasons to believe the Bessemer would.) Nor is there any reason to think it would continue to work for Bean if everyone did it.

                  To put it bluntly, we are faced with an unknown. Advocates of either position face the same problem. They don’t have all the information they would like. They don’t know what they are talking about. This makes it very difficult to say one position is right, and the other wrong.

                  In that situation, people often resort to name-calling. We see it here. “Disagree with me? Well, then you are stupid, write bad checks, and wear white after Labor Day”

        • This is not the language of a person who actually knows.

          Of course it isn’t. The challenge in business is dealing with the unknown.

          I’m still waiting to gear from someone who actually knows the effect of library lending on retail sales.

          • Those that know to a decimal (Amazon and Kobo/Overdrive) aren’t talking.
            Why should they give away their corporate knowledge/competitive advantages?

            You’ll have to make do with the various University studies floating about.

            Speaking of Amazon, they must be loving this catfight.
            But if anything, they would likely see the BPHs stop library licenses. It would drive more readers to KU.

            • Those that know to a decimal (Amazon and Kobo/Overdrive) aren’t talking.
              Why should they give away their corporate knowledge/competitive advantages?

              Agree. So, why do people who don’t know insist the MacMillan position is stupid?

              Anyone remember the days when authors insisted the normal economic pressures that influence consumer goods don’t affect books? Because each book is unique, special, and consumers so want a specific book that they won’t balk at paying more?

              Well, we now see books are just as price sensitive as widgets. Cut price, and watch sales rise. Note how the operation of that factor supported the independent authors capture of a substantial eBook market share.

              So, we know eBook sales are price sensitive. Are people now making a case that price sensitivity applies only to non-zero pricing?

              • “Agree. So, why do people who don’t know insist the MacMillan position is stupid?”

                They’re lowering their chances/odds of discovery for their authors. Since their sales depend on their authors being discovered they are being ‘stupid’.

                • Ding. Ding. Ding!!

                  We have a winnah!

                  One more time: libraries offer publishers *real* discoverability boosts and *pay* for for the privilege. But MacMillan prefers to pay for NYT ads that go unseen by most buyers.

                  Yeah, that is stupid.

                • With lending, what is the sales increase from discovery?
                  With lending, What is the retail sales loss?
                  What is the magnitude of each?
                  How do they compare?
                  How do we know what is stupid without knowing the above?

                  Good analysis looks at all the factors.
                  Good advocacy selects only the factors favorable to the agenda.
                  Good advocacy needs good analysis.

                • With lending the discovery increase is greater than zero and you’re paid.
                  Without it it is zero and you’re not paid.

                  Not too hard to follow, is it?
                  Something is better than nothing?

                  In a business with no meaningful marketing turning on your biggest (and paying) discoverability channel is the very definition of self-defeating.

                  Next!

                • I sympathize. When the book is at the library, I check it out. When it isn’t, I buy. I pretty much always check the library first. Even for indie books. I can’t deny that there are definitely books I would have bought if the library didn’t have them.

                • With lending the discovery increase is greater than zero and you’re paid.
                  Without it it is zero and you’re not paid.

                  Not too hard to follow, is it?
                  Something is better than nothing?

                  Even an unprofessional low-brow like myself was able to follow that, and I completely agree.

                  So, let’s keep up the good work.

                  With lending, people borrow rather than pay retail, and the sales loss it greater than zero, and you don’t get paid.

                  Not too hard to follow, is it?
                  Nothing is inferior to something.

                  Or, we could ask if retail sales loss is larger or smaller that retail sales gain from library discovery.

                  If we can’t answer, we might acknowledge that we don’t know, and also don’t know if MacMillan is stupid.

                • Anonymous: for lending to cost a sale, it has to be a book the reader *knew* existed and was willingto buy it blindly.
                  If it’s tbe latest Stephen King book, he loses a sale.

                  If it’s a midlister or newcomer, the reader won’t know the book exists much less be eager to buy it.

                  Again, it’s about discoverability and brand building.
                  Applying Stephen King rules to all books is corporate publishing thinking. King has a brand and fanbase: how many authors can make that claim?

                  It’s all about how you define normal: the average of all books or just the handful from big names.

                  If you’re a Big Name, library books are a total loss (but adds up to pocket change compared to their contracts); if you are anything but a Big Name, the lost sale is counterbalanced by the visibility and brand building. Which is more meaningful, a new fan or a buck or two?

                  The typical King book gets checked out a dozen times. The typical library book gets checkout out three to four times.
                  Since there are more of the latter than the former, the average will skew dramatically towards the midlisters.

                  King isn’t the normal to judge by; midlisters are.
                  To whom the extra fan is worth more than tbe lost sale, as demonstrated by the Panorama project mentioned above.

                  So yes, something is more than nothing and repeat business is worth more than a one and done. (Unless the book is dreck, but nobody writes dreck, right?)

                  For all that corporate publishers talk of dicoverability, they know very little of how it works. And MacMillan shows less knowledge than most.

                • Again, it’s about discoverability and brand building.

                  It is indeed about discoverability and brand building.

                  It is also about substitution of library books for retail books. There are lots of ways that can happen. For example, one way is to find a book on Amazon, and then check to see it if it is available for free at the library.

                  This is a bit similar to the pleasant surprise I find when I go to Amazon intending to buy a book, and then find it is in KU. Truth in posting – I opt for the KU version.

                  Since we don’t know the magnitude of various upward and downward pressures, it’s not reasonable to eliminate any factor based on what we think, but don’t know, and can’t demonstrate.

                  And counterbalancing? How do we know the balance if we don’t even know the magnitudes of the factors?

            • Rakuten/Overdrive is the main sponsor of an ongoing series of analytical studies of the effect of library ebook circulation on book sales.

              https://www.panoramaproject.org/

              I’m slightly skeptical of the project because OverDrive is an obvious beneficiary of library ebook circulation so I expect the studies are somewhat biased in favor of libraries, but so far, their publications have looked sound to me, although I have not given them the scrutiny I would if I were not an advocate for free libraries.

              The American Library Association, Penguin Random House, Audio Publishers Association, Ingram, and a lot of others are members and support the project. I haven’t seen Macmillan or Blackwood mentioned in the membership.

              Panorama studies have generally confirmed that library circulation does correlate to increased book sales– one study observed Amazon rankings jumping significantly when books show up in libraries.

  8. I still say this whole thing probably started because some flunky at MacMillan showed her boss the Libby app on her phone and they said, “holy crap, it’s that easy?”

    • Agreed. How large is this demographic:

      1) People who like to read,
      2) and go to libraries,
      3) and can afford to buy books,
      4) and actually does buy books,
      5) but doesn’t buy more books from an author they first found in a library,
      6) whose book they liked?

      I will take Macmillan seriously when they prove that particular demographic exists, and exists in large numbers to boot.

      • Can we add people who
        like to read,
        buy books from Amazon,
        and now find it cheaper to look up a book on Amazon, and them borrow it from the library?

        These would be people who change their habits as availability of library eBooks increases and transaction costs of using the library decreases.

        This would also entail considering future consumer behavior rather than past behavior.

        And proof? Nobody cares enough to give it to me. And nobody at all cares if I take them seriously.

        I, however, will be delighted to take anyone seriously who can demonstrate the effect of library lending on retail sales. They don’t even have to prove it, just quantify what they know

        • What would those second set of people tell us? How are they different from the people who walked into Barnes & Noble, browsed for books, then went to the library instead? What are the chances the people in your hypothetical don’t fall into the opposite of condition 3 in my hypothetical?

          Macmillan’s plans make sense if the people in my hypothetical exist in large numbers, which would actually be noteworthy, as they would cause existential terror on the part of writers, publishers, and librarians everywhere. If they exist, that’s the lede in this story, at least for me.

          I would consider Baen to be a bellwhether here, since they’re also a publisher, and they have data on people who read for free and buy books, and Baen’s bottom line still depends on the existence of the latter. Yet they still have their library. When they join Macmillan’s side in this, I’ll believe that the hypothetical demographic I proposed exists in significant numbers to be threatening.

          Another way to check this: do authors who 1) have a series of books, and 2) offer up the first in the series permafree report that sales for the rest of the series falls off? What about when they do giveaways (temporary free)? I’ve always heard that either practice has a positive result for sales. So if that’s no longer true, it would be a new thing under the sun, and again, worthy of noting.

          What I’ve noticed is that Baen authors who previously had their books for free in the Baen library as well as for sale, started offering up a second editions when Amazon prevented Baen from offering the free and sale versions at the same time. The second edition is enhanced in some fashion, which routes around Amazon’s pricing rules. Note that these authors didn’t pull the free version entirely.

          If public libraries are detrimental to book sales, I’d expect large groups of authors to insist on contract clauses that forbid their books to be sold to public libraries. If that should happen, I’d want to know what those authors and their publishers are doing differently than Random Peguin and Baen et al.

          Here’s a report from the link Democritus Jr. listed above. Random Penguin, Sourcebooks (two actual publishers), plus Overdrive (an e-library) tracked sales across print and ebooks when libraries in assorted cities began a campaign to promote a particular book by a new author. The January sales reflect the fact that the book came out then, then there was a drop off until the libraries began promoting it during the campaign window in April.

          The study compared numbers across the country, with a specific focus on North Carolina, where there’s regional interest in the book, and Wisconsin, where there isn’t. I would also be curious to see results if Panorama tries this campaign with a genre midlist author.

          Community Reading Event Impact Report

          Quote:

          Discovery Impact from the Campaign

          ~5.6 million page views globally of the ebook title details page in public library digital catalogs.

          ~An increase in title’s Amazon Kindle sales rank—from below 200,000 prior to the library ebook club campaign to 7,833 at the close of the event.

          Brand Development Impact from the Campaign

          ~Over 13,000 Goodreads additions for the title during the campaign.

          ~400+ comments from readers, librarians, the author, and OverDrive forum moderator on the OverDrive moderated title discussion board.

          ~500+ mentions from libraries and readers on social media sites using #BigLibraryRead.

          Retail Sales Impact from the Campaign

          ~818% growth in ebook sales from March to April, 2018.

          ~201% growth in print sales from March to April, 2018.

          Sustained retail sales above pre-campaign (January–March 2018) volumes:

          ~April–June 2018 ebook sales continued at 720% above pre-campaign volumes.

          ~April–June 2018 print sales continued at 38% percent above pre-campaign volumes.

          • What would those second set of people tell us?

            I don’t know. I haven’t seen the data. Have you? What does it tell us?

            And authors insisting on contract clauses? They couldn’t insist on lunch. Look at the contracts. And how do they know the effect of library lending on retail sales? Perhaps they will tell us.

            I think we have advocacy without analytic support.

  9. It is possible for eBooks to be an almost perfect public good, as defined by economists. That is a good that is provided by government, can be accessed and used by all, and no individual’s access or use is curtailed by another’s use.

    Economists complicate the issue by saying the good is non-rivalrous (can’t be used up and doesn’t decline with use) and non-excludable (everyone can use it).

    For example, street lights. Everyone gets to use the light, and my use doesn’t stop anyone else from using the light. National Weather Service radio signals are another.

    The broadest use of libraries would make eBooks a public good. The library buys a license to distribute the good to as many patrons as ask. It’s non-rivalrous since sending a book to one patron does not diminish the stock available to another patron. It’s non-excludable since any citizen can ask for a copy.

    Think Amazon would sell many copies of an eBook distributed as a public good by a library?

    Anyone remember the slogan about how information wants to be free? I haven’t really heard it since the days of wait-persons in hemp ponchos serving sprout salads. But it’s never dead.

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