Doctorow on the e-book rip-off for libraries

[SteveEisenberg]

If I understand correctly, some here are proposing that the publishers decrease their revenues by charging libraries substantially less than what their business people have determined are optimum prices.

Questions:

-- Who should the publisher take this money away from?

Authors?

Editors?

Stockholders? (good answer only if they pay dividends)

Executives? (easy answer, but these are publishing executives, not computer executives, so I doubt there is enough money for the purpose in that well).

-- Is it any different if the publisher is non-profit? A lot are. Should Harvard reduce financial aid to pay for this?

-- Does it matter if the government you are giving this financial gift to is in one of the world's richest countries?

-- Does it matter what kind of book it is?

My personal view is that charging suboptimal prices is only justifiable as part of the corporation's charitable giving. If on the board of directors, I would favor reduced prices to libraries in a few of the world's poorest nations. And I might favor reduced prices for medical journals, because of the social value of those publications. I certainly favor low prices for medical journals shipped to low income countries. But I'd be against charging western governments a suboptimal price for ordinary popular books.

[BadBilly]

Originally Posted by PurpleStar

I wouldn't pay a fee every time I check out a library book, if that's what you all are talking about. I mean the whole point of the library is so you don't have to pay, aside from the cost of the library card. Might as well buy used/cheap books if I have to pay anyway.

I agree. My taxes pay for the library and the services it offers. There are many services it offers that I do not use but I see how there is a benefit to the system as a whole in having them. In return, I want my e-books. Creating a two-tier library, where some services are free but the nicer services have to be paid for doesn't sit well with me.

[BadBilly]

Originally Posted by Barcey

The problem is that the current copyright laws have broken the free market system, it doesn't work when one side can make all the rules. The publishers have demonstrated that they won't negotiate a fair deal with the libraries. The governments need to step in and mandate what the publishers will be paid via the library system.

The libraries are not required to purchase the books. I'm pretty sure that's how the system works. It would also be good if they let their patrons know why they do not have these books and give them contact details for the publishers.

[tompe]

Originally Posted by BadBilly

I agree. My taxes pay for the library and the services it offers. There are many services it offers that I do not use but I see how there is a benefit to the system as a whole in having them. In return, I want my e-books. Creating a two-tier library, where some services are free but the nicer services have to be paid for doesn't sit well with me.

Why do you want to have compensation when you see how it benefits ths system even if you do not get the specific compensation you want?

Also the library can never work if each person should be compensated for the tax ha pays to the library. Isn't one of the main idea of a library to make things available to people who would not have them available otherwise.

[BadBilly]

Originally Posted by tompe

Why do you want to have compensation when you see how it benefits ths system even if you do not get the specific compensation you want?

Also the library can never work if each person should be compensated for the tax ha pays to the library. Isn't one of the main idea of a library to make things available to people who would not have them available otherwise.

As I was responding to the previous comment that I do not agree with the idea that e-books are in a special category and I should have to pay a fee to borrow them from the library. I already pay for the library with my taxes. I don't expect that every penny be spent on things I want, but I do thing I should get a share of the resources.

[dalai]

Originally Posted by SteveEisenberg

If I understand correctly, some here are proposing that the publishers decrease their revenues by charging libraries substantially less than what their business people have determined are optimum prices.

How do you define optimum prices? I am guessing that publishers try to charge the highest amount possible without turning away customers. In that respect, they have the libraries in a bind. The library patrons want ebooks and they, not unreasonably, believe they have already paid for those ebooks through their taxes (and likely a library subscription). Libraries have little power to negotiate better licensing terms.

So lets reverse the question. Where do you think the library should get the extra funds to pay for the arbitrarily higher prices of ebooks they have to pay for? The taxpayers?

Anyway, in my opinion the problem is in the licensing. As it stands publishers can impose any restrictions they want. Some have commented that it comes with being in a free market, but to me it seems more like small monopolies. Personally, I would support having a set of "minimum rights" associated with purchasing an ebook that you cannot sign away by accepting a license (whether you are a library or consumer).

[pdurrant]

Originally Posted by HarryT

But different people. If you read the licence agreement at any ebook store you'll see that the book is licensed to you personally, not to anyone else. You can't (under the terms of the licence) buy an ebook and let your friend read it. A library is purchasing the right to let multiple people read the book.

This varies by ebookstore. Amazon are happy for your friend to read the book, providing it's on a device linked to your account.

[zerospinboson]

Originally Posted by SteveEisenberg

If I understand correctly, some here are proposing that the publishers decrease their revenues by charging libraries substantially less than what their business people have determined are optimum prices.

Questions:

-- Who should the publisher take this money away from?

Executives? (easy answer, but these are publishing executives, not computer executives, so I doubt there is enough money for the purpose in that well).

-- Is it any different if the publisher is non-profit? A lot are. Should Harvard reduce financial aid to pay for this?

I'd say a combination of cutting the dross from the management layer (say, a 60% reduction in management fte), and reducing management pay levels.. Everyone else has been suffering from stagnant wages for decades already, why not them?
Also, a lot of companies have been saddled with debts to their investor owners, with the effect being largely the same as paying dividends -- if cast in a different legal form for tax (evasion) purposes. Often in such cases, the loan sum is given back to the investor/owner as a 'superdividend' or whatever the euphemism is; if those kinds of structures were forbidden/recognized for the tax dodges they were, publishers would have more money left over for actual publishing (at lower costs)..

A bit off-topic, but why on earth should Harvard (etc.) UP reduce financial aid?
As I see it, they have lots of options.. to name just a few:
1. Sue Larry Summers for mismanagement of Harvard University leading to the loss of the something like $2B, and force him to give up everything he owns from now until his death..
2. dial down the super-star salaries for their tenured faculty for moral purposes and give non-tenured faculty and other workers more reasonable wages instead; cut away the management layer that has sprung into existence over the past 30 years or so.
3. I don't know if the profits from harvard's (etc.) publishing arm are required to go into student aid, but if not, I'd say Harvard could do with a few less prestige projects (new, dysfunctional but pretty or imposing buildings...), while continuing to offer 'student aid' at the low levels they do today, justified by the ridiculous fees they charge for access.

To sum up, I have doubts about your implicit suggestion that the companies are being run 'efficiently' in a meaningful sense of the word..

[doctorow]

Originally Posted by jehane

I find it odd that you consider an ebook/pbook comparison invalid, but an ebook/car comparison perfectly valid. Especially when they are used in completely different ways, and I don't mean reading vs driving.

I don't find an eBook versus pBook comparison invalid. What I find invalid is taking the weaknesses of paper and trying to somehow reproduce them on eBooks (such as the 26-circ cap).

Books are also less commodified than rental cars. An individual is unlikely to go to the car rental place and specify exactly which make and model they want (unless it's high end of course), rather, they select a type, eg medium-sized, and the car rental place will give you what *they* choose. However with books, it's unlikely that an individual will go to a library and say they want something from genre X, and leave it up to the librarian to choose something for them.

I am not sure I follow. How is this relevant?

If you want to compare business models, then consider the considerable "wastage" of having books idling on shelves, even electronic ones. In the transport industry (to which car rental companies belong), such idling indicates vast overstocking and the solution would be to massively cull the excess. I am guessing you would not be supportive of such an action by libraries?

Uhh? I don't understand the relevance.

I made the analogy to point out that it's not reasonable why wholesale merchants (like libraries) should pay a premium merely based on the assumption that an eBook is lent out and thus read by more than one person.

[latepaul]

Originally Posted by dalai

How do you define optimum prices? I am guessing that publishers try to charge the highest amount possible without turning away customers. In that respect, they have the libraries in a bind. The library patrons want ebooks and they, not unreasonably, believe they have already paid for those ebooks through their taxes (and likely a library subscription). Libraries have little power to negotiate better licensing terms.

Little power but not none.

Publishers will only get the message that they're overpricing their licenses (if that's the case) if enough libraries refuse to pay.

As for having "already paid" you could argue the same for other items such as DVDs or whatever. But whether or not they charge a fee they should make it clear to their patrons why, or why there aren't more ebooks available.

Trouble is there are plenty of taxpayers who'd happily see libraries disappear.

[Sregener]

Originally Posted by BadBilly

As I was responding to the previous comment that I do not agree with the idea that e-books are in a special category and I should have to pay a fee to borrow them from the library. I already pay for the library with my taxes. I don't expect that every penny be spent on things I want, but I do thing I should get a share of the resources.

As a heavy library user, I understand your perspective. Here's the problem. Say the latest bestseller comes out and your library wants to buy a couple of copies so they can meet demand. They shell out $19/copy (Amazon discount) and put 4 books on the shelves for about $80. It develops a long hold list of 100 people, but with 2-week lending for "new titles" the list clears in a year. At the same time, they purchase one e-book for $80. It develops a long hold list of 100 people, but with 2-week lending, it takes 4x as long to clear, except that the publisher has restricted downloads to 26 copies for the eBook and then it disappears. So they have to buy the eBook 4x to clear their list, or $320.

Now, as a library patron, of course I want everything to be free. And I appreciate and enjoy the convenience of borrowing eBooks. I dislike the limited selection and the long waits that come with it. But it is hard for me to say, "Hey, spend 16x as much on one eBook as a printed copy would cost." It is hard for me to look at the selection of children's books and say, "We could have a lot more new titles if eBooks weren't so darned expensive." So while I agree that eBooks are popular, and library patrons want them, I don't see how they are cost-effective if the library can't pass the costs on somehow.

Perhaps we could start a referendum in every town in America to raise funding for eBooks through a tax hike. But I doubt it would pass. So if patrons can't pay a fee and taxpayers wouldn't raise taxes to pay for eBooks, it means that every eBook means at least 4 physical books don't show up on the shelf. And over time, that will reduce the availability of information to patrons. Thus, as much as I dislike it, I'm willing to pay a small fee to borrow an eBook.

[SteveEisenberg]

Originally Posted by BadBilly

The libraries are not required to purchase the books.

Correct.

Now, if I am searching correctly, your library has 30,528 encrypted ePUB titles, making it one of the world's best for us:

http://toronto.lib.overdrive.com/780...rtBy=Relevancy

When you add in the duplicate copies, not included in my count, this arguably amounts to a branch library without the costs of construction and physical maintenance.*

8,347 titles have been added in the past six months, showing that the apparently profligate Toronto library continues to feed the alleged beast:

http://toronto.lib.overdrive.com/780...rtBy=Relevancy

Originally Posted by latepaul

Publishers will only get the message that they're overpricing their licenses (if that's the case) if enough libraries refuse to pay.

Absolutely correct. If Toronto stops buying books over a certain dollar limit, publisher data mining systems will notice, and the executives will reconsider pricing. Maybe they will lower their salaries to compensate for lost revenue. Maybe Toronto will lower taxes. More likely, neither.

Because many readers still don't use eReaders, I think that libraries should spend the bulk of their acquisitions budget on paper books. But for those which can, with eBook purchases, afford to support the kind of publishers who offer advances and provide substantial editorial assistance by paying US$90 for a Random House eBook, good for them.

Unless relatively rich cities like Toronto change their ways, the publishers would be mistaken to charge less. It is wonderful that Toronto has enough money to support the book creation industry in this way. But if a community doesn't have the money, just buy paper books, with a mix of regular and large print.


________________________
* This isn't to negate the value of librarians and non-borrowing library services. I'm just pointing out that copyrighted eBooks, while more expensive to buy than paper, save other costs.

[Barcey]

The library system has been able to successfully coexist with the publishing industry for hundreds of years. Despite it's existence the publishing industry has been able to pull in billions of dollars of annual revenue and hundreds of millions of annual profits, this is not a destitute industry and it's not a balance that was broken.

The library Overdrive lending system was designed to exactly mimic the lending of paper books except the publishers have decided to band together and either completely withhold ebooks or charge 4 to 6 times the equivalent paper book costs. They've openly admitted that their goal is to cripple the library system or to use their language "introduce friction". It's disingenuous to suggest that the libraries can just stop buying from them, the publishers would be thrilled. Oh sure they'd put on a face that they're losing revenue but they would be laughing.

When prices suddenly jump by 400 to 600 percent it's a clear indication of a free market failure. It's not surprising because the library system is not a free market system, it's a government service funded (mostly) by taxpayers. I not only believe it's appropriate for the government to step in, I believe it's their responsibility to. They can't keep pretending the free market system will fix it.

[Sregener]

Originally Posted by Barcey

When prices suddenly jump by 400 to 600 percent it's a clear indication of a free market failure. It's not surprising because the library system is not a free market system, it's a government service funded (mostly) by taxpayers. I not only believe it's appropriate for the government to step in, I believe it's their responsibility to. They can't keep pretending the free market system will fix it.

As you point out, the system is not a free market failure because when dealing with the libraries, it's not really a free market system.

In a free market, it is the job of the consumer (in this case, the libraries) to demand as much product they can for as little cost as they can. It is the job of the producer (in this case, the publishers) to demand as much money for as little product as possible. It is not a free market failure if one side or the other changes the terms and conditions of the deal. If you stop buying beef because it's become too expensive, that's not a free market failure. And if libraries stopped buying eBooks because the publishers are demanding too much money, it is also not a free market failure. But the very fact that libraries are and continue to buy eBooks at the prices publishers are demanding means that they must believe they are getting fair value for their purchase.

What you seem to think is that because the libraries are paying a price that is higher than the one you think they should, the government should insist that the publishers charge less. Which could very easily drive the publishers out of business, since no business does well when people who lack the skills to run a business attempt to use their threat of force (which is precisely how governments do anything) to run it. In any other situation, we'd call that thuggery, criminal behavior, or outright theft, but when the government does it, we call it "in the public's best interest."

There is no way a 400-600% rise indicates that the free market has failed. Especially when dealing with new products where companies have not yet established long-term buying habits and trends.

[dalai]

Originally Posted by Sregener

But the very fact that libraries are and continue to buy eBooks at the prices publishers are demanding means that they must believe they are getting fair value for their purchase.

Obviously that is not the case. The whole thread started because librarians and the ALA find the ebook licensing terms unfair. The reason they continue to buy ebooks under those terms is that if they don't, in a few years they will be obsolete. I am not at all convinced that publishers will lower their prices if libraries stop buying, it is more like that's what they want.

Originally Posted by Sregener

What you seem to think is that because the libraries are paying a price that is higher than the one you think they should, the government should insist that the publishers charge less.

In my opinion, the government should only insist that libraries are not discriminated against. Just like a library can buy a pbook or DVD at the same price as you, they should be able to do the same with ebooks. There is no real reason for different pricing and licensing terms just for libraries.