Archive for November, 2011

Amazon and Library E-book Lending

November 28, 2011

The latest chapter in the ongoing saga of  the  uneasy relationship between book publishers and Amazon.com began to unfold last week.  Penguin Books  announced that they were suspending their distribution of new digital books in the Kindle format to libraries. Penguin  and other major publishers will continue to license e-books in Adobe EPUB format, the format favored by all e-reader vendors except Amazon. If you have an Apple iPad, a Sony Reader, a Nook or use any of the readers running Android operating systems, you will be reading EBUB formatted books. If you are using a Kindle, you can only read books in the Kindle format.

The reasons given by Penguin are opaque; they mentioned “security considerations” (whatever that means.) As in all matters associated with e-books,  there are lots of issues and interests at stake in this decision. Let’s try to  ferret out the real back story of all this.

Publishers have always been uneasy about licensing e-books to libraries. They will tell you that they support libraries as the institution in America that creates readers and builds literacy that, in turn, allows  publishers to flourish. Most people won’t argue about this. However with the advent of e-books and e-book library lending programs, publishers are  concerned that this will harm their own  sales of e-books. The reason that they are more concerned about this  than they have been about traditional library lending is because it is so much easier to check out an e-book than it is a physical book, and an e-book is always in pristine condition no matter how many times it is lent out. The reader need not worry about those nasty spots and  unsanitary stains that populate the margins of the pages of a typical library book.  In the past in order to check out a library book, the reader must actually go down to the library and go through the normal hassles, parking, stepping over undesirables, etc.,  in order to be told that the few  titles  that the customer would actually want to read have  waiting lists for the next 3 months. Using the library e-book check out service, you can get a copy of your favorite book while at home  by downloading it  any time day or night.

To be perfectly fair, libraries have managed  in their new e-book services   to recreate every reason that you have avoided   going  to the library in the first place.  I belong to the Oakland Public Library and have availed myself of the service from time to time. And it is convenient when a book I want to read  is in stock and available.  I lie in bed, I hit a button on my new iPad, I get my book. Sweet! However, as with traditional books, the financially hard pressed libraries can only order a limited selection of popular titles and those in  small quantity.  So I still have to wait weeks or even months for the books I want to read.  Of course there  are always lots of books immediately available that are less in demand. In Oakland, most  of these books seem to be  in Chinese or Spanish and accordingly are not of great  interest to me. They have a pretty good selection of Berenstain Bears titles as well.

The e-books  at libraries are being managed by a company called Overdrive. When the programs first began last year, books were only available in the EPUB format and the largest segment of e-book customers, Kindle owners, were not able to participate. Earlier this year Amazon allowed the libraries to license Kindle editions. But  as is  Amazon’s wont, they managed to design the system so that the customer could not just hit a Kindle button on the Overdrive site. Rather they were directed to the Amazon site where there are a myriad of buttons encouraging the library patron to buy the book instead of borrowing it and, while there, to buy a plethora of other Amazon merchandise from cameras to condoms.

This is standard operating procedure for Amazon (and good retail marketing too). Amazon discounts selected items heavily, even using them as loss leaders, to get customers to the website where they then engage in an orgy of buying from Amazon’s vast selection. So Amazon has  been heavily promoting the Kindle library lending program. Sure, it takes away book sales a little bit. But a few lost book sales is a small price to pay for a magnet to bring customers coming back for more stuff.

For now the other major publishers are sitting on the sidelines. Some of them aren’t participating in the Overdrive program at all. Others, like Random House, have responded with even more obtuse comments than Penguin (“We are always evaluating all of our publishing programs.”)

So what does all this mean? For librarians this is about the fact  that they just want their e-books available and don’t want to get caught in a dispute, not of their making,  between the publishers and Amazon. For publishers, already uncomfortable about the e-book library program, this  is about the fact that they don’t want Amazon using free books to drive traffic to their web site to the detriment of e-book sales. For internet gurus and geeks,  this is an example of  the  “legacy” media dinosaurs fighting another losing battle against the brave new world of internet where “information wants to be free”.  For authors this is about whether they have a right to be paid for their work, just like everybody else. (European libraries give authors a small royalty every time their book is checked out. See my previous blog post: Revenge of the Killer Librarians ).

Amazon’s Latest Indignity: Free Lending

November 14, 2011

Last week I was in New York City for 3 days conferring with editors. 25 of them to be exact. I’m exhausted. I’ll write about this more in  the next few days.

I frequently talk about how difficult it is to gauge editors’ reactions to submissions. It is all very subjective and editors have a pretty broad diversity of sensibilities. But there appears to be one subject that elicits strong feelings across the spectrum. That is a loathing for Amazon.com. This is a little puzzling since Amazon has surpassed Barnes and Noble as the largest purveyor of books in America. Usually publishers, who are no different from any other business, are pretty circumspect about criticizing their largest account. Not so with Amazon.com.

The newest Amazon indignity that is causing a huge uproar with authors, agents, and publishers is the  free book lending policy that is offered as part of Amazon’s new “Prime” program. The  cost of joining Amazon Prime is $79.95 per year. It’s  a pretty good deal.  You can get free shipping from Amazon on all orders and receive thousands of streaming videos at no extra cost. But the  part of the package that is upsetting authors is the lending program that allows Prime members to borrow a book for free once a month.

There seems to be some question as to whether  publishers can and will  license their books to be read for free by Amazon,  and authors are incensed that they have  not, possibly will not be consulted in the event that the program takes off . First of all, the good news is that there are only 5000 books being offered and a lot of them will be of no interest to most readers. Amazon approached the 6 largest publishers: Random House, HarperCollins, Macmillan, Hachette, Penguin, and Simon and Schuster. All of them turned Amazon down. The next tier of mid-size publishers: Norton, Houghton Mifflin, and Bloomsbury apparently refused as well. But Amazon went ahead without their permission  putting some few  of  their books on the list. Amazon claims that if they pay the publisher the cost of an e-book every time one is checked out (thus treating it like a sale), the publisher has no say in the matter. Publishers argue that they never intended that their books be used in this manner, essentially as premiums to induce customers to buy hardware or services.

Probably the heart of the problem is concern by authors and publishers that the new culture of “free” or, at any rate, “almost free” will further degrade the public’s sense of the inherent value of books and writing. Amazon has been cultivating this sensibility for a long time. The most extreme examples are the used books that are being offered for 1 cent all over the Amazon site. But Amazon has been attempting in other ways to dictate what the inherent value of e-books should be. They have been willing to sell e-books below cost. That is no problem for Amazon. Once  customers gets on the site, they are more likely to buy other merchandise. For instance: cameras, computers, or condoms.

The Authors Guild,  which is the largest organization representing authors, is practically apoplectic over this. They are particularly concerned that authors have no say in this matter, that there is no equitable formula for compensating authors if a publisher sells a license to Amazon for this use,  and that the existing book contracts could only permit this use under a tortured interpretation.

I’m sure we will be hearing more about this soon. So stay tuned.


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