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Originally Posted by DNSB
An interesting claim. I somehow doubt that any publisher is far enough removed from reality to believe that if the library did not have the book to loan, every person who would have borrowed the book would have gone out and purchased their very own personal copy.
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Nor do I claim they do. A lost sale is not always something you -can- get back. I have in fact spelled out previously that this would fall into the accounted for losses. But any business worth a damn is still going to factor in losses they can not prevent.
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I just checked the 27 ebooks added to my local library in the last 7 days. 16 of them had wait times over 6 months. 1 of them had a 2 week wait time, 2 had a 6 week wait time with the remainder pretty much evenly scattered over the 8 to 20 week wait times.
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Which:
1) assumes no one on those lists returns them early
2) provides no information on the number of licenses the library has for those books
3) provides no information about the buying intentions of anyone on those lists
4) does not account for people who may be part of multiple library systems one of which you're looking at
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As for lost sales and lost profits, given the pricing of ebooks for library loans, the profit margin on a single library sale is much higher than the profit margin on a single retail ebook purchase. This would have to be balanced against the potential profit of the possible sales lost due to the 26 to 52 loans allowed by publishers on that "sale" to the library.
As an example, one ebook recently purchased by my local library cost them $49.30 Cdn for 26 loans or 1 year (whichever comes first). I can purchase the book from Kobo for $8.99 Cdn -- a mere $40.31 less than the library paid. A rather different situation from pbooks where the library can buy the book for it's SRP or less from any retailer, no loan limits, no drop dead dates.
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Yes, a library will pay more for a given books license. You'll note I did not claim the publishers weren't making good money off the library. My only claim has been that they count the borrowed books as lost sales. Of course with your own example the publisher only needs to entice 5 people in that 90 day period to not wait for the library to have the book before the those sales overtake the library sale.
As I've said before, a publisher isn't going to just sit back and say "well we sold to the library for a nice profit, lets just leave the possible extra money on the table'. That's not how businesses operate, they want to maximize their profit.
So Macmillan limits libraries to 1 license for the first 90 days, in that 90 days it's fully possible greater than 5 people will buy the book. The probability only goes up using the figures you provided above with longer and longer wait times. And as I demonstrated in an earlier post those 5 sales start to mean a lot of profit as you crunch the numbers.