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The Debate Around Ebooks and Libraries

November 26, 2012 by

As the popularity of ebooks rises, the tension between publishers and libraries has heated up. It’s a legitimate tension. After all, the library “is an organized collection of resources made accessible to a defined community for reference or borrowing. It provides physical or digital access to material….” – Wikipedia.

A for-profit publisher, on the other hand, is in the business of maximizing stakeholder value, of which income is the core component.

In the print world, there is not much of an issue. The legislative and judicial branches of our government have determined that once a physical product has been sold, it can be used in a multitude of ways, including being lent. This is known in the intellectual property world as the “first sale doctrine.”

In the ebook world, the product is different. Rather than being a hard-to-reproduce physical, tangible product, it’s a simple-to-copy digital file. Librarians understandably want content available to their patrons, but in this case, libraries don’t buy ebooks, they license the content. The first sale doctrine does not currently apply. Publishers are understandably concerned about those files getting out into the open, and there is a widespread belief that piracy is rampant.

Libraries drive a significant portion of a publisher’s print revenue. Conceptually, one would imagine that they would be happy to generate digital revenue, and therefore their goals would be aligned. However, there are several issues that prevent the current physical lending model from working for publishers, including the following:

  • Physical books typically have a lifespan of 26 borrows. While few books reach this threshold, popular books require libraries to re-purchase those titles. With the current lending models of digital books, this revenue opportunity would be eliminated. There is no limit to the amount of times one can lend out a digital file without it degrading.
  • Digital Rights Management, known as DRM, is widely considered to be a weak technology. DRM prevents digital files from being used beyond the scope of the license agreement. For example, as HarperCollins has expressed interest in doing, one could theoretically limit the number of loan-outs to, say, 26. The problem is, DRM doesn’t help much in its current form. It’s cumbersome to use and relatively easy to hack (so I’m told).
  • Despite some biased studies to the contrary, publishers believe that ebook lending will cut into their sales.

I am optimistic about this issue being resolved at some point, the big question is when. My gut tells me that there is a solution that enables everyone to win. Hopefully, the two parties can come to agreement on what that will look like. It’s not always pretty, but in the end the consumer will benefit.

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