Amazon and Library E-book Lending

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 ).

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7 Responses to “Amazon and Library E-book Lending”

  1. Anonymous Says:

    good complete post Andy…

    Reuben

  2. Dale Copps Says:

    “European libraries give authors a small royalty every time their book is checked out.”

    You could say we do as well. Our libraries purchase the books they lend, and those books are typically lent out a fairly limited number of times before they either fall apart or settle down for a long shelf life. I have proposed a more transparently European model for eBook lending (see, The End of Libraries at http://alltogethernow.org/showtag.php?currid=85).

    The bottom line, however, is this: Authors want readers and readers want eBooks. Stand in the way of that relationship, and you face obsolescence. Facilitate it (as Amazon has begun to do with its Kindle Owner’s Lending Library) and the future is yours.

    There is no reason why libraries and publishers can’t get together to profitably produce the eReader’s Heaven: to borrow any title on any device at any time. If they don’t, Amazon, or some other commercial entity, is going to destroy them both. In the case of public libraries, this will be a national tragedy.

    • andyrossagency Says:

      Dale, I would urge all readers to read your thoughtful and exhaustive posts on this issue. I think you are exagerating that Amazon will destroy publishers and libraries if ebook lending is not made universal. There is still the issue of copyright. The authors own it and can choose to license it any way they desire. In a world where anyone can “borrow” an e-book, there are some very real questions about the rights of writers to be paid for their intellectual work. The existing model is not the only one. One can argue (as I would) that authors are undercompensated, particularly for ebooks. You can read about this in this blog (How ebooks are cheating Authors.)

      • Dale Copps Says:

        Andy, Thanks for the endorsement.

        If Amazon or any other commercial enterprise can put together a Netflix-like service–a comprehensive list of titles, a good interface, a reasonable price–then I think it not at all an exaggeration to say public libraries will fade from the landscape. No one can argue that libraries are doing a good job of serving their eReaders now. I hope they will find their way to an acceptable model. There are no signs they are doing so at present.

        Meanwhile, there is the First-Sale Doctrine, which says anyone who acquires a legitimate copy of a copyrighted item has the right to do anything they want with it–resell it, give it away, or lend it, serially, to one borrower at a time. This is what Amazon is doing, and if they ever figure out a way to do it profitably for new and bestselling books, well, game over.

      • andyrossagency Says:

        Dale, I’m a literary agent, not an intellectual property lawyer, so I don’t profess to have the final word on this matter. But it is my understanding that publishers license Amazon and other retailers to sell digital books. They are able to set the terms of the license and can limit the way Amazon (or any other licensee) uses it. It is significantly different than selling a used book.

      • Dale Copps Says:

        You are correct in matters of sales. However, Amazon, like any person, library, corporation, or other entity, is able to buy books and thereafter make use of them in accordance with the First-Sale Doctrine. Amazon is apparently doing that with those Lending Library titles for which they have not arranged “package deals” with the publishers.

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