Random House's new library pricing increase revealed

[Andrew H.]

Originally Posted by Sil_liS

Supply and demand doesn't work with monopolies, and copyright gives monopoly over books. With pbooks the libraries at least have another source for books: donations. With ebooks there is no such luck.

A monopoly is significant control over a market, not a product. Otherwise the term is meaningless - i.e., Coca-Cola has a monopoly over Coke products; Pepsi has a monopoly over Peps products, Apple has a monopoly over Apple products, etc.

Copyright only gives you exclusive control over products, not markets. But brands always have monopoly power.

Considering the last Apple vs. Motorola case I would say that it's imposed by courts.

It's sort of complicated, so you are right and wrong.

If you have a patent, you have no general obligation to license it on FRAND terms, no matter how useful it is. But if you have a patent that you want to be used as a part of a "standard" - like IEEE 802.11n for wifi, or the "3G" standard for cell phones, the organization that creates the standard will require your patent to be offered on a FRAND basis if you want it to be part of the standard. (There are often several thousand patents in a standard). You are free to decline this and not be part of the standard. (Although the net result will be that the standard will use some other patent that agrees to be offered on a FRAND basis and you will be left out in the cold, since the market for wifi that doesn't comply with 802.11a/b/g/n is tiny, if it exists at all). And even though your FRAND license may be tiny, you do get to collect it on almost every wifi device sold - since they all want to comply with the standard).

More significantly, though - companies getting together and setting a standard for a particular device raises antitrust and monopoly issues. The companies holding the wifi patents do have monopoly power, and they got this by getting together with some other companies and fixing prices. This would be illegal *except* that there is an anti-trust exception for companies that use FRAND licensing.

This is what got Motorola in trouble - they have patents that they agreed to make part of the 3G cellphone standard. But they do not appear to be offering them on a FRAND basis to Apple. This means that the anti-trust exemption does not apply to them and thus they may have violated anti-trust laws.

Libraries can't boycott publishers. Publishers don't want to sell books to libraries. They see it as a loss, not a source of revenue.

Libraries can boycott publishers, although I'm not sure how effective it would be.

It's not the public that decides the budget of the libraries.

Not directly, although they do have influence - mismanagement of our library's expansion a few years ago led to the library board being replaced. And more generally, the board has to justify its budget to the city council, which they tend to do by showing the number of people using the library.

This is what the publishers want the libraries to do. Giving in like this would just make publishers increase the prices of ebooks until it's impossible for the libraries to justify buying them.

Most publishers don't make their e-books available to libraries at all, though. And of those that do, I think RH is the only one that makes its new releases available. So we're almost in a situation now where libraries won't have e-books. I'm not sure that there are any good choices, really.

[Andrew H.]

Originally Posted by catsittingstill

I would argue that providing books people want to read has a great deal to do with literacy promotion. To be any good at anything people have to practice--and books that make them want to practice reading promote literacy.

I don't really buy this at all, at least not for adults. My library has adult literacy programs, but the students aren't reading Jonathan Franzen - or even James Patterson. I think that fiction books like this are aimed squarely at people who have no literacy issues at all. (Well, maybe addiction problems)

Originally Posted by catsittingstill

And also I would suggest that the market is not setting the price of library e-books until we have lots of publishers, all competing with each other to sell similar products, and libraries can pick and choose freely among them.

When a five-publisher coalition controls a lot of the market, the market isn't free. At which point taking action to offset that doesn't seems reasonable to me.

It's a free market. There are six big publishers, none with monopoly power, all competing with each other to sell similar products. There are also a significant number of smaller publishers, many with important authors. (Suzanne Collins, J.K. Rowlings). That's plenty for a free market - dividing the available books among, say, 4 more publishers won't change anything.

[MrsJoseph]

Originally Posted by SteveEisenberg

Someone please correct me, but I am thinking just the opposite. Wouldn't any attempt to regulate the prices multi-national publishers charge US-based governmental libraries go against international laws enforced by the World Trade Organization? Even if I am wrong there, forcing publishers to charge every class of customer the same price is politically impossible in almost all countries, and certainly in a center-right country like the US.

Question to any librarians on the thread: To what extent do public libraries based acquisition prioritization on the price of the book?

Price gouging is a pejorative term referring to a situation in which a seller prices goods or commodities much higher than is considered reasonable or fair. This rapid increase in prices occurs after a demand or supply shock...

I have no clue if there is a law against it nationally - but in this case I think that price gouging is an apt term to describe what is happening to libraries.

While I don't expect that libraries will ever get books for the same price as you and I (and AFAIK they never have)... a 300% price increase for the same product is pretty immoral and I think it should be illegal. The fact does remain that libraries are where the majority of the reading public get access to literacy. There is no way to have a democratic nation without literacy. So, in effect, there is no America as we know it without libraries.

[Kali Yuga]

Originally Posted by MrsJoseph

I have no clue if there is a law against it nationally - but in this case I think that price gouging is an apt term to describe what is happening to libraries.

There is no such law, and it's not apt.

"Price gouging" in the law refers to a sudden rise in prices due to an external shock. For example, if there is a hurricane that knocks down a bunch of power lines, and the local hardware store charges $750 for a $250 generator, that might qualify as price gouging.

It is not universally held that raising prices like this is awful. Some people innately react to this as taking advantage of a situation; others innately react to it as a method of ensuring that a vital resource is not depleted rapidly in an emergency.

A publisher who asks a library to pay more than you believe they should pay -- for a good that is completely optional and upon which life and livelihood does not depend -- does not qualify as "gouging" in the legal sense.

Originally Posted by MrsJoseph

While I don't expect that libraries will ever get books for the same price as you and I (and AFAIK they never have)... a 300% price increase for the same product is pretty immoral and I think it should be illegal.

How is this "immoral?" Do citizens have a moral right to free short-term access to Stieg Larsen's works? Is the price of a good is set in stone from the first instant it's offered? Would a 50% increase be acceptable? 100%? 200%? On what basis do we determine the magic number by which a price increase is allowed?

What if I believe that an iPhone is three times more expensive than it "ought" to be? Do I have a moral right to demand that Apple cut its prices by 1/3? That the government ought to step in and adjust prices?

No one is forcing the libraries to purchase Random House's titles. There is no inherent price to any good -- only what the market will pay. If Random House sets its prices higher than the libraries are willing to pay, then either RH will lower its prices or lose the business. Libraries make up about 5% of the annual market, and can coordinate via professional organizations such as ALA.

Government threats won't help the situation -- since the most likely response is for Random House to just stop selling ebooks to libraries. No sales, no accusations of "price gouging." Not much of a solution.

I.e. library protests with public support makes sense. Expecting government to step in and interfere with the process does not.

Originally Posted by MrsJoseph

The fact does remain that libraries are where the majority of the reading public get access to literacy. There is no way to have a democratic nation without literacy. So, in effect, there is no America as we know it without libraries.

Libraries are a public good, and have many benefits for society.

However, your statement is definitely an exaggeration.
• Schools are the primary drivers of literacy
• Free / public libraries are actually a relatively recent part of American life; e.g. the Boston Public was only founded in 1848.
• the role of libraries is rapidly changing anyway, with less influence placed anyway on the literacy role

And of course, almost every nation in modern society reinvents itself constantly. The "America as we know it" will be gone in 20 years anyway.

[SteveEisenberg]

Originally Posted by anamardoll

I absolutely favor government intervention to keep prices set the same regardless of the customer.

So all car dealers will have to post firm no-haggle prices? I love it. Too good to ever happen!

Random House can't charge me 300% of what they charge everyone else

They aren't organized in a way to do so. But so long as they don't discriminate by race or gender, they can do so legally. I can't think of any reason a bookseller isn't allowed to check out who posts against their industry on the internet, and try to charge them more. Even if they engaged in blatant sex discrimination (2/3 off when a guy buys romance books this weekend), they might get away with it.

In some parts of the world, you surely can haggle with retailers over the price of a book. I'd be surprised if lots of people (say, tourists) weren't charged 300 percent more than others for a Random House title.

why should libraries be any different?

When one of our sons receives his student-rate Journal of Herpetology, he's the only one who will read it. When a library receives its institutional rate copy, at least a few people will hopefully read it. However, that's not the real reason the libraries pay way more than individuals. The real reason is that libraries comprehensive enough to even consider an obscure title like that tend to have a lot of money.

Publishers tend to be joint stock companies that would face hostile takeovers if they charged much less than the revenue-maximizing price.

[SteveEisenberg]

Originally Posted by MrsJoseph

There is no way to have a democratic nation without literacy.

I'm all for literacy, but are you sure about this? India had democracy, with an illiterate majority, for over forty years (before becoming 50 percent literate around 1990).

For the past decade or so, a lot of the best-setting non-fiction, in the US, has been on the theme that people of other political persuasions are all idiots or knaves. Maybe it would have been more helpful to democracy if the readers had been watching TV instead!

You can have democracy without literacy, and dictatorship with it.

What you can't have without literacy is economic prosperity.

[MrsJoseph]

Originally Posted by Kali Yuga

There is no such law, and it's not apt.

I believe you about the law - the "apt" part is your opinion.

Originally Posted by Kali Yuga

How is this "immoral?" Do citizens have a moral right to free short-term access to Stieg Larsen's works? Is the price of a good is set in stone from the first instant it's offered? Would a 50% increase be acceptable? 100%? 200%? On what basis do we determine the magic number by which a price increase is allowed?

I'm not going to play "guess the price amount" game with you. But (since you bring up schools) who pays for education? Everyone who pays taxes educates our population...or at least tries to have them educated considering the quality of certain school systems (so I'm not even going to touch your comments about schools - since the "drivers of literacy" being a school 100% depends on the quality of the schools children have access to. And around here...most of the kids don't get their education in school...see Atlanta for example). So how is it that the authors and publishers take part in the benefits of our society and then are not required to give back? That's a very selfish point of view. Yes, citizens who helped to educate and support authors and the people who publish them deserve something back for their support. I think paid for copies of books are the least that can be done.

And there are no "free access" to any of these works. These books are paid for. Paid for. Not free. Each and every one is paid for with my dime and your dime AND they are MORE EXPENSIVE than what is available commercially.

[Kali Yuga]

Originally Posted by MrsJoseph

Each and every one is paid for with my dime and your dime AND they are MORE EXPENSIVE than what is available commercially.

They're also utilized more frequently and by more people than when I, as an individual, purchase an ebook. They're less expensive to maintain, they don't need to be replaced (even if the whole library burns down), they can be checked out much faster and more frequently than paper books. Thus, it does make sense that library ebooks may carry a premium, especially if RH does honor the "perpetual" aspect.

Originally Posted by MrsJoseph

....I'm not even going to touch your comments about schools - since the "drivers of literacy" being a school 100% depends on the quality of the schools children have access to.

...and then you proceed to talk about schools for a full paragraph.

I'm not saying that every school is 100% perfect. I'm pointing out that while many libraries do offer literacy training and are an excellent resource for their communities, it's screamingly obvious that the overwhelming majority of people learn to read in schools, not in libraries.

I.e. if every public library in the US closed its doors today, society would be negatively impacted, but literacy rates would not drop significantly.

Originally Posted by MrsJoseph

So how is it that the authors and publishers take part in the benefits of our society and then are not required to give back?

They are, in the same way as everyone else: They are taxed, and encouraged to donate to charities.

If a publisher chooses to contribute their products as a public good, that's their choice. If you threaten them with prosecution because they charge too much, that's going to end up detrimental -- especially if they decide to stop library sales altogether, in order to avoid prosecution.

Originally Posted by MrsJoseph

citizens who helped to educate and support authors and the people who publish them deserve something back for their support. I think paid for copies of books are the least that can be done.

And I disagree. Free public Libraries are a public good and a government service. As such the cost of them should be primarily borne by the public, who wants those services.

It's no different than any other government service. A fire or police department should not be able to force vendors to fix prices for them or apply discounts; that should be at the discretion of the retailer. Someone who owns a well-reputed work of art and chooses to sell it to the highest bidder should not be required by law to sell it to the Smithsonian, and only charge 50% more than the price she paid for it. If a hospital has a bad credit rating, the normal procedure is for a lender to charge a higher interest rate to compensate for the risks; should this be classified as "gouging" and therefore declared illegal?

I.e. you need a little something more than a gut feeling before you insist that government step in and fix prices.

[Sil_liS]

Originally Posted by Andrew H.

A monopoly is significant control over a market, not a product. Otherwise the term is meaningless - i.e., Coca-Cola has a monopoly over Coke products; Pepsi has a monopoly over Peps products, Apple has a monopoly over Apple products, etc.

Coca-Cola and Pepsi can't say "you can only buy directly from us at triple the price that our distributors are offering".

Originally Posted by Andrew H.

This is what got Motorola in trouble - they have patents that they agreed to make part of the 3G cellphone standard. But they do not appear to be offering them on a FRAND basis to Apple. This means that the anti-trust exemption does not apply to them and thus they may have violated anti-trust laws.

The publishers get the right to have a monopoly over specific titles, shouldn't that right come with some duties as well?

Originally Posted by Andrew H.

Not directly, although they do have influence - mismanagement of our library's expansion a few years ago led to the library board being replaced. And more generally, the board has to justify its budget to the city council, which they tend to do by showing the number of people using the library.

Indirectly the publishers get their profits from the consumers, that doesn't mean that the consumers get to make decisions on the financial management of the publishing houses.

Originally Posted by Andrew H.

Most publishers don't make their e-books available to libraries at all, though. And of those that do, I think RH is the only one that makes its new releases available. So we're almost in a situation now where libraries won't have e-books. I'm not sure that there are any good choices, really.

They can't stop a library from having print versions of the books. Why would they get to deny access to the digital versions?

[Sil_liS]

Originally Posted by Kali Yuga

It's no different than any other government service. A fire or police department should not be able to force vendors to fix prices for them or apply discounts; that should be at the discretion of the retailer. Someone who owns a well-reputed work of art and chooses to sell it to the highest bidder should not be required by law to sell it to the Smithsonian, and only charge 50% more than the price she paid for it. If a hospital has a bad credit rating, the normal procedure is for a lender to charge a higher interest rate to compensate for the risks; should this be classified as "gouging" and therefore declared illegal?

Are you seriously saying that wanting to pay less than 300% is a discount?

[Kali Yuga]

Originally Posted by Sil_liS

Are you seriously saying that wanting to pay less than 300% is a discount?

My friend, you are way too literal.

The point is that government-mandated prices are a bad idea, even when the recipient of said largesse provides a public service.

[Kali Yuga]

Originally Posted by Sil_liS

Coca-Cola and Pepsi can't say "you can only buy directly from us at triple the price that our distributors are offering".

Yes, they can. And do.

A publisher can sell you a book directly at full price, while a retailer slashes the price by 50% or 75%. It happens all the time, with retailer discounts, used books and remaindered books.

Originally Posted by Sil_liS

The publishers get the right to have a monopoly over specific titles, shouldn't that right come with some duties as well?

Sure. They have to pay their taxes and obey the laws, just like everyone else.

If I self-publish a book, I get full control over how that book is distributed. I am not legally or morally required to provide the public with anything. If I decide I don't want libraries to distribute my book, should I be forced to do so?

Why stop at imposing extra duties on publishers? What's so special about libraries, since there are so many public goods? Why not require gasoline companies to provide gas for free to fire departments? Free bullets to police? Free medicines to hospitals?

[MV64]

Originally Posted by SteveEisenberg

I'm all for literacy, but are you sure about this? India had democracy, with an illiterate majority, for over forty years (before becoming 50 percent literate around 1990).

For the past decade or so, a lot of the best-setting non-fiction, in the US, has been on the theme that people of other political persuasions are all idiots or knaves. Maybe it would have been more helpful to democracy if the readers had been watching TV instead!

You can have democracy without literacy, and dictatorship with it.

What you can't have without literacy is economic prosperity.

Well, to split hairs, India was a very corrupt anti-democratic democracy.

[azazel1024]

Originally Posted by Kali Yuga

Yes, they can. And do.

A publisher can sell you a book directly at full price, while a retailer slashes the price by 50% or 75%. It happens all the time, with retailer discounts, used books and remaindered books.



Sure. They have to pay their taxes and obey the laws, just like everyone else.

If I self-publish a book, I get full control over how that book is distributed. I am not legally or morally required to provide the public with anything. If I decide I don't want libraries to distribute my book, should I be forced to do so?

Why stop at imposing extra duties on publishers? What's so special about libraries, since there are so many public goods? Why not require gasoline companies to provide gas for free to fire departments? Free bullets to police? Free medicines to hospitals?

Actually within reason, yes, you should be forced to sell to libraries. Within reason, if you are targeting a large enough portion of the public, you don't have a right to not sell your product to catagory of someone.

A great example is Netflix, Redbox, et al. Warner Brothers and others have come out with 30 day and starting soon in some cases 60 day blackouts in when Netflix, Redbox and others can rent new releases. However, that only applies to movies sold to those companies through wholesale rental copy deals with them. The companies can go out and buy the movies at retail price and rent them to their hearts content day 1 without the movie publishers being able to say a thing.

Within reason, libraries versus publishers should/is the exact same situation, but it isn't playing out that way. I firmly believe electronic media, software, etc should be treated exactly how physical media is. If the library can legally purchase a book and lend it, then there should be nothing stopping them from buying the ebook however they want and lending it. Yes, there are some additional strings attached when it comes to electronic means.

It isn't ethical, let alone legal (and grey area there) to buy a single ebook and lend it concurrently to multiple people. However, my public library damn well should be able to buy 50 copies of a kindle book off Amazon and lend it up to 50 times at once without anyone being able to tell them differently.

[faithbw]

Originally Posted by HoopyFrood

I don't see the problem, if the e-books are too high the library shouldn't buy them. Buy the dead tree version. I mean this is like a no-brainer. I like e-books, but I don't want my taxes financing the greed of these e-book publishers.

But I've always felt the library is for and about books, not CD's, not DVD's, not video tapes...you get the idea. Books and reading pure and simple.

Originally Posted by SteveEisenberg

They could go a long way in that direction with no complaint from me.

I've never read this, but I think acquisitions librarians must experience some tension between catering to the public desire to read the latest bestseller and the traditional library mission of building a permanent collection of the best-reviewed books on virtually all subjects. Suppose that the only fiction purchased, by a small town library, consisted of single copies of titles that had won, or been nominated, for any of the many annual awards program existing for both literary and genre fiction. This would build an excellent collection while virtually eliminating overpaying for recent releases. But it would also eliminate a lot of public support for libraries.

This is off topic but the mission of the modern library (going back to the 19th century when library science started to emerge) has never been about providing only books and definitely not only "the best-reviewed books on virtually all subjects". The mission of libraries is primarily to provide information, in whatever form it may be. They also serve other missions such as promoting literacy and even serving as places where people in a community can gather for things as various as a book or teens in a gaming tournament.

Librarians are taught to try to be as impartial as possible when including material in a library's collection. This doesn't mean there is no discretion at all but we can't rule out a book just because one person may consider it fluff or because someone else thinks the library should store non-fiction books. So even though one librarian may only read book reviewed in the New York Times Review of Books or books published by academic presses, she can't limit the libraries collection to those books. That's limiting information, which we're not in the business of doing.

You may think that a novel doesn't provide information but information can be found in many places. Children's fiction often provides information about different subjects. They're fictional but they help children learn about a variety of issues. YA fiction can often have information on how teens handle topics such as sex, relationships, friendships, etc. Is it factual in the sense that a non-fiction will be? No. Still, many adolescents can still gain some useful information.

Even adult fiction can be informative. I can't begin to count all of the things I've learned about different time periods, people, cultures, etc. from reading novels.

Additionally, information doesn't only come in books. It can come in the form of a book on tape, a CD of Chopin's greatest hits, a DVD of a documentary and more.

So my point in all of this is that the mission of libraries as we know them is to provide information to their communities in a variety of formats. That's why the restriction of e-books by the major publishers is frustrating for librarians. I know that for now, nearly all books are still published as p-books but as e-books become more popular and even the preferred distribution for books, the restrictions on e-books will become more troubling.

I'm not even sure that boycotting Random House will make a difference. I think they're sending a message that they really couldn't give a rat's butt about whether or not libraries buy their e-books. They would rather have all those people who borrow e-books from the library buy from them directly. That would profitable for them. What better way to send that message than by making e-books cost prohibitive to obtain for libraries? It makes sense from their POV but it is still frustrating for libraries.