A while back, I did a post that tried to unpack library ebook pricing but ended up as a digression on copyright law and physical books that laid the foundation for another post on ebook pricing. This is that post. It’s been a little bit, so if you want to go back and check out the prior post, you can read that here

This brings us to the really confusing world of ebook pricing and libraries.  

Consumer prices for books are easy to explain: I know roughly what I’d pay for a physical book at a bookstore. List price for hardback fiction is usually in the $30 range, and if it’s a recent release, there’s probably some kind of discount. Similarly, I know that if I’m going to buy an ebook, it’ll cost about $10-15. This makes logical sense. There are costs associated with producing an ebook (most notably editorial, marketing, and royalty to the author) but the physical cost of the book and all the mechanics of distributing a physical book vanish in the ebook world. So, say a consumer pays roughly half as much for an ebook as for a physical book. 

As I pointed out before, you’d think that library costs would be similar. What we pay for physical books is similar-ish, after all.  Libraries do get to lease physical copies of books, and we do get some pretty high-volume discounts because of how many books we buy, but it’s all in the same ballpark. 

You’d think it would be similar. 

You’d be wrong. 

In fact, what libraries pay for ebooks is significantly MORE than what a consumer would pay. There are a few business-y reasons why this is the case: 

  • Ebooks take us out of the realm of “First Sale Doctrine” and into the realm of Digital Rights Management (DRM). There are different legal rules applied to digital content than physical books, and this really does need to be a different set of rules because we’ve moved from a world of low-cost replication of content into a world of NO-cost replication of content. Without some sort of legal oversight, one book could easily turn into a million books.  Are you old enough to remember conversations about the music industry and music sharing sites like Napster/LimeWire? If you were paying attention to the news in the early aughts, you probably remember a thing or two about these businesses and how legitimately scared of this model musicians were. 
  • Secondarily, publishers recognize that digital copies of ebooks do not wear out or otherwise get damaged in ways too numerous to detail here (ask a librarian for their weirdest damaged book story; most of us have them, and they usually involve random gross substances and a rightly-earned fear of touching items stained with hard-to-identify varieties of goo). Publishers want to bake that limited shelf life of a book into their pricing model, and so our titles do expire, usually after 2 years. In the world of DRM, you are essentially licensing content and not buying the thing outright. Is two years an equitable number for this expiry? No one really knows. We will understand the impact of needing to, essentially, repurchase our entire digital collection every two years. Just like the rest of ebook pricing, though, it will never match up exactly to the way we manage our physical collection.  
  • Sixth and lastly (can you tell I’ve recently seen Much Ado About Nothing?), because DRM is really complicated when the content is being lent, libraries have a third-party vendor who handles that bit of the process for all of us, meaning that the publisher now has 100% visibility into which sales are going to libraries and which are going to individual consumers. And now they can make a case for charging different amounts for the items when libraries purchase them. The cost libraries get charged for a two-year single user license for individual ebook titles is about four times what you are buying your own personal ebooks for. Yep, about four times as much for a temporary license. This becomes harder to manage as more people find the ebook format their preferred format for reading books. 

…and honestly, this only applies to the Overdrive model of licensing.  Things get even more complicated when we add in the Hoopla content that many libraries have, which is charged to libraries on a per-use basis. The means that every time a Hoopla book is checked out, there is a charge at the library end. This is definitely not how libraries are used to functioning, since our typical way of working with items in our collection is to maximize the use of them and thereby the value to the entire community. 

So there’s a combination of things happening here: multiple industries trying to learn how to adapt their old business model in the new-ish DRM world. AND a search for equilibrium in terms of how to adapt to the realities of this shift in a way that allows authors/publishers fair compensation while still allowing libraries to continue to function. At this point, libraries are increasingly stating that the current pricing model is not sustainable for them, and everyone is really curious (and maybe a little scared) to see what happens next. 

Already you are letting us know that the wait time on our ebooks and audiobooks is longer than you would like. Some libraries are reducing the number of holds that patrons can place. Others are simply allowing wait times on holds to get incredibly long, rather than buying additional copies to keep what is called a “holds ratio” low. There are trade offs associated with both of these strategies for patron experience. 

Most librarians will tell you that they don’t believe that the current pricing for ebooks is sustainable on the library side. Most of us use Overdrive, but our actual purchasing is happening at the individual title level. Our purchasing is very community driven, and each individual library has limited power to use its purchasing power to communicate this lack of sustainability to the publishers in any meaningful way. Meanwhile, last year, nearly 85% of best sellers were published by one of the “Big Five” Publishers. These five publishers have a lot of power to determine pricing for the entire market…and maybe a look into the consolidation of publishing in the US might be a good topic for a future blog post…but I’ve still got some more work to do unpacking the importance of school libraries first!