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Vol. 44 No. 5 — June 2024

FEATURE

Macmillan provoked librarians to try legislative action to get fair terms. These efforts found some success at the state level: A Maryland bill became law, and a New York bill passed. The New York bill was vetoed by the governor under great pressure not only from book publishers, but by associations for film, television, music, and advertising—in short, any media outlet with a stake in having digital content licensed rather than owned by consumers. The Maryland law, which was based on proposed federal law, did not withstand a legal challenge in 2022. It was struck down under copyright as going too far by mandating that publishers set certain price terms.

However, librarians have learned from this example. Legislators in many more states have taken up the gauntlet, using new terms that are more likely to pass a legal challenge. From the librarian perspective, there is need for legislation: The Big Five—with their vast percentage of bestselling and high-demand titles—have still higher costs associated with them than before. Many libraries, especially smaller ones, struggle to provide digital content even though demand is higher than ever. In addition to legislation and advocacy, a number of innovative practices—and with medium-sized and independent publishers pioneering license terms—demonstrate some necessary progress toward more sustainable library digital content operations.

The Need for Action: Big Five Cost Increases to Libraries

A comparison of Big Five title prices for consumers compared to costs for libraries shows an interesting and conflicting trend. In ReadersFirst’s Publisher Price Watch (readersfirst.org/publisher-price-watch), there’s an apples-to-apples comparison on the same titles in audiobook and ebook formats between the two groups; it is instructive to see what the publishers are doing in the retail case as context for price changes in the library market.² Notably, Big Five prices for consumer titles in digital audiobooks (using Audible titles) have gone down markedly from May 2022 to December 2023, with the average being a decrease of 22.5% (see Table 1).

Ebook prices on the Kindle format for the same titles have risen slightly on average, up 1.8%, with one publisher making a larger increase and another a larger decrease (see Table 2).

Consumer print costs have gone up slightly more than consumer ebook costs, at 3%, perhaps reflecting higher costs in physical materials (see Table 3).

By contrast, the cost of these items for libraries on OverDrive has risen dramatically. Other library vendors might offer different pricing, but most vendors generally accept and pass along the publisher’s library retail price, often without lowering it (a habit we deplore) when the publishers may offer the infrequent sale. Digital audio shows a substantial increase, especially when compared to the even larger decrease that consumers are seeing. We thank Macmillan for lowering costs slightly, but HarperCollins—which had been offering somewhat better prices—has apparently decided that library costs should be much, much more. A 17.5% increase in a year? Really?

The average costs are up nearly 4%. Titles are now on average 3.85 times above the cost for the same consumer title (see Table 4). Ebook costs have also increased for libraries and at a higher percentage than for consumers. We thank Penguin Random House and Macmillan for holding the line. We call out HarperCollins again for a huge increase (see Table 5).

That libraries are paying four times as much on average than consumer digital costs is nothing surprising. Librarians have long noted a figure of three to four times the consumer amount, so that ratio is simply holding true. More interesting is that libraries are paying for digital more than three times what consumers pay for print, when libraries actually pay even less for print than consumers. Through our print jobbers, discounts off new-title Big Five hardcover prices are typically more than 40%. With Big Five titles, libraries buy many, many more print copies than we license in digital. But library print buying is not generally seen as a threat to publishers’ existence or to authors’ royalties in a way that, as we shall see, library digital is sometimes portrayed. Indeed, publisher participation in library conferences is common and even lavish. This discrepancy begs the question of why libraries are charged so much more in digital. We shall explore this topic later, but for now, we suggest that it is little wonder why libraries increasingly find digital content unsustainable.

We cannot offer as many titles as we could even 3 years ago, especially since most libraries are unable to raise their materials budgets, with everything else costing more and funding often remaining flat. Shifting funds from print to digital is problematic: We cannot ignore our print readers, especially children—the print book experience is often better for young readers than digital is—and those on the wrong side of the digital divide. Even factoring in the need for processing, shelving, and moving between branches, print still offers a far better “bang-for-book.” It is hard to justify paying $75 for a 2-year ebook license on Colleen Hoover’s Too Late and Erin Hilderbrand’s The Five-Star Weekend when the print price is $11.50; a hardcover often easily lasts more than 2 years and even 100 or more circulations. Higher prices than the already previously high costs when compared to print are driving increasing librarian advocacy.

The need for action is exacerbated by the other licensing terms under which we get digital. We thank Penguin Random House for adding a 1-year metered license to the existing perpetual (not that we think any license will be forever) one-copy/one-user model on e-audiobooks. A lower-price metered license coupled with a perpetual license better allows libraries to meet high demand up front without paying over and over for the same titles. We wish Penguin would adopt this option for ebooks as well, as our collection breadth is negatively impacted by continually replacing ebooks rather than diversifying our holdings with new books, as we do with print. We surveyed four library systems to get some idea of just how much library budget must go to trying to maintain the existing digital collection (see Table 6).

No system replaces digital titles unless they have at least one existing patron reserve. Existing demand and the need to keep up with high-demand new titles generally prevent even well-funded libraries from keeping titles without holds once their license expires. The proportion of titles with expiring (aka “exploding”) licenses has increased since 2018, now comprising 60%–70% of the collections. The percentage of the budget spent on replacements varied widely by library/consortium, depending on the demand for items, holds ratio, price of items, number of copies originally licensed, need to keep up with new titles on limited budgets, importance of keeping a title in the collection for long-term use (especially, perhaps, popular series titles), and length of the item (especially if an audiobook is many hours long). Little wonder, then, that at least for Big Five titles, library digital collections are a shadow of our print holdings. Building a deep and rich digital collection featuring worthwhile older titles, debut authors, or niche publications is all but impossible under today’s license terms. Libraries are generally unable to make a shift to primarily digital holdings even as the number of patrons who want digital comes to rival or even exceed the number of patrons who want print.

Library Response

Libraries have responded to the challenge of unsustainable digital collections through formal legislative action, by partnering with some smaller publishers, and by developing new and creative selection processes. The legislation, it should be noted, is generally aimed at the Big Five and some large academic publishers that generally offer perpetual access but at prices that can range into the many hundreds of dollars. The aim is to create more fair licensing options while stretching limited funds as much as possible.

Legislative Efforts

While the Maryland ebook law being struck down was a disappointment for libraries in 2022, the setback has suggested more fruitful legal strategies. Six state legislatures have put forward bills since then: Connecticut, Hawaii, Massachusetts, Rhode Island, Tennessee, and Vermont. At the time of this writing, none have passed; however, Connecticut and Massachusetts’ bills look poised to be the next ones to become law. The Association of American Publishers (AAP) has launched determined opposition, including hiring lobbyists and sending letters to legislators threatening to sue. A last-minute lobbying tactic derailed the Hawaii bill in 2023, vacating a vote by a favorable legislature. Legislators are generally favorably disposed to the library cause, as an article from two Connecticut bill sponsors suggests.³ Legislators support bills to ensure greater access to content, especially by less advantaged constituents, while pointing to a fiscally irresponsible drain on tax dollars under the current terms.

State library associations and librarian advocates have been instrumental in helping to bring the bills forward, but they have been mightily assisted by Kyle Courtney and Juliya Ziskina of the Ebook Study Group (ebookstudygroup.org). Both are attorneys and copyright experts. They have drafted sample legislation, “law based on consumer protection, contract law, and contract preemption to regulate library ebook contracts with publishers,” and they will customize proposed legislation based on an individual state’s existing consumer laws.⁴ Rather than mandate that a publisher set prices, as the Maryland law did, the new language stipulates what a state considers fair pricing. Publishers do not have to adjust their prices accordingly, but they can only license in a state under the state’s fair terms. Publishers that do not meet those terms are locked out. Unlike the Maryland law, these bills do not run afoul of copyright: “They do not mandate contracts between publishers and libraries or force publishers to sell to libraries. Instead, they regulate the terms of those contracts.”⁵ Some legislation adopted by various states includes other important terms, such as the following:

• Libraries may make preservation copies, even of licensed titles, as they are allowed to do with print works.
• Libraries may lend digital works via interlibrary loan systems, a practice that Big Five licenses often forbid.
• Libraries are not blocked from licensing materials at the time of publication to the public.
• Libraries are not prevented from sharing the terms under which they license digital materials. (Revealing contractual terms is currently prevented by many vendor licenses.)

If these laws pass, libraries in those states could see Big Five publishers cease to license there, leaving the market to independent publishers, which mostly already offer fair terms. Major publishers that choose this course would also be facing risk. Librarians in other states might voluntarily choose to refrain from licensing from publishers that pull out of markets. Libraries spend considerable sums on digital content. The Big Five publishers have seemingly been uncomfortable in the library ebook market, but losing a large share of it would arguably not be in their economic interest.

Public Advocacy

Advocacy with the public, often in support of ebook bills, has been undertaken by many groups. ALA,⁶ state library associations, the Urban Libraries Council and Canadian Urban Libraries Council,⁷ Chief Offices of State Library Agencies (COSLA) and its members,⁸ and the Digital Public Library of America (DPLA)⁹ have worked to expand library access and to call out unfair terms. The ReadersFirst Working Group—to which both authors belong—has pivoted from advocating for a better library digital experience through technology to advocacy of, and studies on, fair terms.¹⁰ Fight for the Future has created a petition signed by more than 1,000 authors, opposing a future in which “libraries are reduced to a sort of Netflix or Spotify for books, from which publishers demand exorbitant licensing fees in perpetuity while unaccountable vendors force the spread of disinformation and hate for profit” and saying that “[p]ublishers must balance profits for the most prominent authors and shareholders with the right of the public to free, unsurveilled access to knowledge and information—as well as the right of emerging authors to be collected, preserved, and discovered.”¹¹ In 2024, Library Futures (libraryfutures.net), led by Jennie Rose Halperin and Michelle Reed, in addition to other advocacy efforts, released the Ebooks For Us (ebooksforus.com) site. It includes comics and games such as The Price Is Wrong, in which visitors are asked to guess what costs less than $500 among an espresso maker, a stand mixer, or a library ebook. Upon guessing, the visitor discovers that “[d]igital textbooks can cost over $600 for e-books that are limited to one user,”¹² with specific examples. The aim is to bring awareness, and concern or outrage, to the problem for people who are not library insiders. The site can be useful in states that are putting forward legislation. It does have a Take Action option, in which citizens or legislators can sign up to get more information. Should a coalition of the aforementioned groups decide to act in concert nationally, or internationally with Canadian libraries and readers, the site could be one place to organize efforts.

Publisher Partnerships

While the Big Five terms are making library digital content unsustainable, librarians cannot lay all their troubles at the doors of the publishers. By continuing a model in digital that works well enough in print—boosting circulation and pleasing many patrons by loading up on many copies of popular titles—librarians have exacerbated the problem. Of course, we want to give as many readers as we can what they want as quickly as we can. But paying high prices for this premium Big Five content, as we have seen in many instances, gives publishers no incentive to compete and all but guarantees that our ebook holdings will largely remain boutique collections. Some vendors and librarians have begun to experiment with ways to deliver more sustainable, but still quality (if not the top bestselling), titles.

The DPLA has been one leader in this movement, under the guidance of the director of ebook services, Micah May. One effort has been to bring both exclusive Amazon and Audible content to libraries for the first time, through the independent and nonprofit Palace Project. The Audible exclusives in particular, available through no other source, are likely to be in high demand. Of particular note are the licensing terms. Titles may be licensed for 40 circulations (10 of which may be simultaneous) for 2 years with unlimited loans (one at a time), 26 loans, or five loans. This variety provides librarians with some choice for spending funds most effectively, and we wish the Big Five would consider greater flexibility. Older titles are priced very competitively, while new titles are at least competitive with Big Five prices. On the downside, no perpetual access licenses are offered, complicating long-term access to titles we might wish to keep.

The DPLA has been able to strike deals for the same variable licensing with some 100 medium-to-small publishers and include a perpetual option at competitive pricing. Also available on a perpetual license are high-quality titles from independent publishers. For example, Jon Fosse, who won the 2023 Nobel Prize in Literature, has perpetual access books (in translation) on license for $17.95. And while some of these works would be available from many library ebook vendors, the DPLA has gone a step further with the Indie Selections project. Reviewers pick out titles that may escape more traditional library review sources, bringing notice to worthwhile reads, including diverse material, and supporting lesser-known authors on terms that are very sustainable for libraries. Discovery is one of the main challenges preventing a great deal of library access to such works. This is a worthy adjunct to the long-standing work of the Indie Author Project, which has “assisted in getting more than 12,000 indie authors into their local libraries [and] worked with top curation partners and librarians to identify hundreds of these as the best indie ebooks available to readers—so they can be sustainably circulated to library patrons with confidence.”¹⁴

The DPLA and Palace Project have worked with Unlimited Listens to bring more than “3,500 titles [including] Christian, Classics, Children’s, Westerns and Clean Romance titles from more than 60 publishers. More than 50 titles per month will be added, [with] Spanish, Self-development, and other catalog verticals by Q4. Unlimited Listens offers a tremendous value with its unlimited access subscription model start[ing] as little as $500.” When one 2-year audiobook license from the Big Five can cost $135, it is nice to see a possible bargain. It is also nice to see an organization offering a subscription model. Having a variety of titles always available at a set cost is advantageous. Pay-per-use models—in which patrons select from a range of titles and the library pays every time—can be budget busters. They can create patron resentment if a library needs to scale back services. The proof of utility will be in the title list. Will patrons want them? With patrons often choosing something that is on hand at the moment even as they wait for high-demand titles, it seems likely these titles will be a helpful and cost-effective supplement.

Libraries and (again) some small publishers are further experimenting with an ownership model. Rather than licensing, libraries would actually own the ebooks, as they do with print, doing away with the licensing model that the big publishers are working so hard to keep. The Brick House Cooperative has been one pioneer through its BRIET project, which touts “ebooks, for libraries, for keeps.”¹⁵ Authors and publishers upload their ebooks by invitation and tag them with metadata. Librarians can then browse the titles, buy them for costs in the $10 range, and upload them into catalogs accessible for online reading. Integration into ebook platforms, where most librarians would like them, may require some additional work. Still, this is a promising start. Ownership would certainly solve the problem of long-term access presented by licensing, even the so-called perpetual access model, which only holds for as long as the publisher has the rights.

The DPLA has also begun work on a model that would allow owned digital titles to be accessed without “building the tech infrastructure required to host hundreds of thousands of ebooks. … [I]n the model we are developing, libraries would own the titles, just as they do with physical books. Libraries would be able to both transfer their books to other libraries and to update books as needed for preservation or to adapt to new formats. Rights holders would retain copyright to their works and all subsidiary rights. Lending would be restricted to one reader at a time with DRM unless waived by the rights holder. We would also provide libraries the option of hosting their books in Palace Marketplace or another provider.”¹⁶ Seamless ownership of ebooks integrated into libraries’ existing digital platform offers great advantages for possible preservation, especially of important local content. We doubt that the Big Five will ever embrace this model, but partnerships with other publishers have considerable potential for sustainable and quality digital content.

Variable Hold Queues

The problem of meeting increasing demand in a time of rising costs has prompted some librarians to question the traditional licensing strategy of meeting demand for pricey Big Five bestsellers. Ordering librarians typically have a hold ratio: the number of reserves that are placed against the quantity of copies owned before obtaining more. For example, a well-funded system might have a hold ratio of 2-to-1 for bestselling hardcovers. If 10 copies are owned, more copies will be ordered if more than 20 patrons place reserves on the title. Digital titles are also ordered based on hold ratios, but it would be the rare library in which digital books use the same hold ratio as the print collection due to the higher digital costs. A hold queue of 6-to-1 might be more common, but these numbers vary greatly by library. Rather than relicense all titles at this standard hold ratio, however, ordering librarians are looking at how less costly but still-in-demand items might instead be prioritized by using variable hold queues. Parker’s hold ratios look like Table 7.

Items exceeding $80 on a 2-year or perpetual license will only have copies added if at least 18 patrons are waiting for every copy, while items under $40 will be relicensed more frequently. This way of selecting is a significant paradigm shift. In effect, high-priced digital audiobooks—many of which cost more than $80—and some expensive ebooks will be relicensed but only when demand is spectacularly high. These titles might be eagerly sought by patrons, but the waiting list will be long. Meanwhile, less costly items are likely to become more readily available. Since adopting these variable ratios, Parker’s consortium has seen the collection grow while the cost-per-circ fell by 25%. As much as we might wish to provide ready access to pricey titles, the practice is simply not sustainable. We know from one study that the most avid digital readers like bestsellers but are satisfied with waits on those titles if many other interesting titles are available to read in the moment.¹⁷ This strategy has proven beneficial in the following three ways:

• More books are immediately available—Browsing patrons who want something new to read right away have much more to choose from. There are hundreds of indie publishers offering excellent, reasonably priced books in a range of genres and subjects.
• More books will remain in the collection over time—Indie publishers mostly offer perpetual use licenses, so this tactic allows the collection to grow and get better, rather than remaining static.
• We use taxpayer funds more responsibly—We still offer access to the most popular bestsellers from the Big Five but constrain how many of their expensive titles we offer in the midrange of popularity. We channel the longtail of our purchasing to the publishers who provide books that are just as good as those of the Big Five, with prices and terms that are much more aligned with our stewardship obligations.

Intellectual Freedom and Digital Books

The biggest threat to library access for many Americans is not Big Five licensing practices or even (for once) public funding for libraries. Rather, it is unprecedented legislative efforts to ban books fueled by small, but vocal groups based on partisan political grounds. Some bills go so far as to threaten librarians with fines and even jail time for providing access to “obscene” books, even though none of the books in question meet the definition of obscenity. Library digital content provides an innovative way to support reading while these frankly unconstitutional laws go down in legal battles. We laud the efforts of Books Unbanned, a group of five large urban libraries that provide free library cards to anyone age 13–21 nationwide to access books that are banned in many areas.¹⁸ The funding comes from library foundations, since local public funding cannot work outside local areas. We also salute the DPLA’s Banned Book Club, which uses geolocation to offer a free Palace Project card to anyone living in an area where books have been banned, enabling access to frequently removed works.¹⁹ Although funded in part through grants, the DPLA is a nonprofit. The ability to protect reading through digital works will be difficult under current Big Five licenses, at least if their works are to be included.

We also wish to thank the Big Five publishers, most especially Penguin Random House, for their work supporting libraries and fighting legislation that’s hostile to reading during this time. Perhaps this shared fight will be one path to a better partnership. Librarians need quality works to fulfill our mission and thus need publishers. Publishers, we assert, need libraries. Would print-equivalent library digital prices, even under licensing, really disadvantage publishers—and their authors—when a balanced print book market has existed with libraries for hundreds of years? We think not. Until such time as federal action might clarify how copyright law is to apply to licensed work, however, libraries will have no choice but to continue legislative advocacy, increase partnerships with and reward innovative smaller publishers, and form creative, new strategies to fulfill our traditional mission of providing reading through shared public resources in an increasingly digital age.

A Justification of Library Advocacy

Until now, this article has made much of how current Big Five terms are unfair, without examining the publishers’ concerns or counter arguments. We should, in fairness, consider those. We will not engage in mere straw-man arguments. The AAP (Association of American Publishers) presented arguments on behalf of the publishers in testimony about the Massachusetts ebook bill, as fairly represented by Alison Kuznitz. We summarize from her report:¹³

Library ebooks bills conflict with the U.S. Copyright Act.

False. Publishers can publish what they want and charge what they want. They just can’t license in states with ebook laws except under the state’s fair terms.

Under these bills, authors will not be compensated.

False. If given fair terms, librarians would probably put more funds into digital licenses. In fact, more authors would be compensated, especially those whose books are not bestsellers, as libraries strive for varied and deeper content. The income might be distributed differently, but the total amount of income could grow. Readers would discover—and perhaps buy—more books. Libraries, we argue, help with discovery of titles. Access through us often leads to sales, especially of new authors. We suggest that the library/publisher relationship is symbiotic. Publishers could easily ensure authors were compensated with the additional amounts.

Intellectual property would be devalued.

False. We pay far less for print per title than for digital, and fair digital costs would simply reflect roughly what publishers get from print from libraries. How would this devalue the content?

Greater access to ebooks through libraries would lead to piracy.

False. Piracy is a problem, but it does not stem from library ebooks. They are digitally protected. The people borrowing them don’t need to pirate. Not only is there no proof of this claim, but it defies logic.

This legislation threatens the entire creative economy.

False. Fair ebook laws do not undermine licensing, if that is the concern, as it appears to be. They merely regulate licenses. These laws would discourage the publishers from taking advantage of a loophole in current copyright that allows them to charge unfair prices when compared to print through licensing.

Referencing licensing as the basis of the creative economy brings up a point that the AAP seems eager to hide. Digital is being treated differently—and arguably unfairly to libraries and readers—than print. They are all books. It is high time to look at copyright with an eye to fulfilling its dual purpose. It exists to protect creator rights but also—as copyright law dictates—to “promote the Progress of Science and useful Arts.” Why should licensing be allowed to be so unfair when compared to hundreds of years of practice that has led to a balance between author and reader? Does it make sense for libraries to pay far more for something they will never own? Perhaps if four or five states pass fair ebook laws, Congress will find reason to act.

Endnotes

1. For a detailed treatment of this history, please see the ReadersFirst “eLending Position Paper”; readersfirst.org/position-papers.

2. We draw these figures from ReadersFirst’s Publisher Price Watch; readersfirst.org/publisher-price-watch.

3. Blumenthal, Matt and Eleni Kavros DeGraw. (2024). “Opinion: Publishers Have Libraries in a Bind. We’ve Got a Novel Solution.” CT Insider. ctinsider.com/opinion/article/opinion-e-books-interfere-libraries-core-18695477.php.

4. “About the Ebook Study Group.” (2023). Ebook Study Group. ebookstudygroup.org.

5. “New State Bills Aim to Improve Access to Ebooks for Libraries.” (2023). Ebook Study Group. ebookstudygroup.org/solving_problem_state_by_state.

6. See especially “The Need for Change: A Position Paper on E-Lending by the Joint Digital Content Working Group.” ala.org/tools/sites/ala.org
.tools/files/content/The-Need-for-Change-A-Position-Paper-on-E-Lending-by-the-Joint%20Digital-Content-Working-Group-2.pdf.

7. See especially Fair E-Book and E-Audiobook Lending for Libraries. urbanlibraries.org/initiatives/racial-equity/fair-e-book-and-e-audiobook-lending-for-libraries.

8. See especially “COSLA Position on Access to Ebooks.” cosla.org/access-to-ebooks.

9. See especially “Expanding Access Through Content Licensing.” dp.la/news/expanding-access-through-content-licensing.

10. See the Projects link on the website for our studies and position papers; readersfirst.org.

11. “1,000+ Authors for Libraries.” (2023). Fight for the Future. fightforthefuture.org/Authors-For-Libraries.

12. “E-Books for Us.” (2024). Library Futures. ebooksforus.com.

13. Kuznitz, Alison. (2023). “Publishers Look to Make Edits to Mass. Lawmaker’s E-Book Access Bill.” MassLive. masslive.com/politics/2023/10/publishers-look-to-make-edits-to-mass-lawmakers-e-book-access-bill.html.

14. Indie Author Project. (2024). indieauthorproject.com.

15. BRIET. (2024). briet.app.

16. May, Micah. (2023). “Towards a Digital Library Ownership Model.” The Digital Public Library of America. dp.la/news/toward-a-digital-library-ownership-model.

17. See “Digital Patron Segmentation Study 2022” posted on ReadersFirst.org. static1.squarespace.com/static/53765f6fe4b060b2a3d3586b/t/6414fb4c4f2ebf0887b889e5/1679096653255/Digital+Patron+Segmentation+Study+2022.pdf.

18. See Books Unbanned. bklynlibrary.org/books-unbanned.

Michael Blackwell (L) (mblackwell@stmalib.org) is director of St. Mary’s County Library and the project and communications coordinator for ReadersFirst. A past chair of the ALA eBooks Interest Group and a member of the ALA Digital Content Working Group, Blackwell has frequently presented and published on public library ebook matters.

Carmi Parker (R) is a librarian with Whatcom County Library System and an executive committee member for the Washington Digital Library Consortium. She is also a guest faculty member with the University of Washington’s iSchool and a ReadersFirst Working Group member. Parker is honored to be named a 2021 Mover & Shaker by Library Journal.