Library Wars: Amazon and Publishers Vie for Control of E-Book Rentals

The widespread downloading of e-books unnerves publishers because digital files can be easily shared and proliferated at no profit


As the digital era unfolds, the role of libraries in the distribution of e-books has emerged as a significant issue of contention. While print books are still the mainstay of most libraries, and audiobooks are accepted as a regular feature, there is considerable uncertainty about how to handle e-books. Among the six largest trade publishers, only Random House has been selling e-books to libraries without restrictions, and a spokesman said that it is now "actively reviewing" its position. Macmillan and Simon & Schuster do not sell e-books to libraries at all. Hachette and Penguin withhold their newest titles, and HarperCollins caps the number of times a book can be loaned at 26 after which, in principle, it needs to be repurchased.

The soaring popularity of e-books and the dominance of Amazon and its proprietary Kindle reader have apparently made these publishers wary of the impact on sales. Smaller publishers and academic presses share those concerns and recognize that e-books could, over time, replace print books as the format of choice among students and scholars, which would seriously undermine their revenue model. About two-thirds of libraries across the country now offer some access to e-books, mostly working through OverDrive, which is the leading provider of digital books to institutions. Initially, Amazon did not make its Kindle e-books available to OverDrive. When Amazon changed that policy this past September, library patron access to e-books substantially increased, and publishers privately expressed concern that substantial numbers of e-book buyers would become borrowers instead. Steve Potash, chief executive of OverDrive, told the New York Times that connecting libraries to the Kindle "is going to bring millions of readers to the public library."

Libraries are a valued pillar of the book business, but the prospect of widespread downloading of e-books unnerves publishers because digital files can be easily shared and used in perpetuity, and because Amazon has proven to be an especially tough negotiator over terms in other aspects of the book business. Announcing before Thanksgiving that it was limiting the sales to libraries of new titles in e-book formats, Penguin said that, "due to new concerns about the security of our digital editions, we find it necessary to delay the availability of our new titles in the digital format, while we resolve concerns with our business partners." In response, Carrie Russell, director of the American Library Association's Public Access to Information program, said "Penguin says that they have security concerns with library sales which we find puzzling. There is no evidence that security breaches have been tied to public libraries or library users. One would think this is more of an issue with everyday consumers or hackers who do not want to pay for ebooks."

In fact, the publishers' real concern is turning over an ever greater share of business to Amazon; in particular, its recently launched Kindle Owner's Lending Library. "Now with the right credentials," Jeffrey Van Camp wrote on the website Digital Trends, "a person could technically get on his or her computer and start borrowing new books and not paying for anything with relative ease. Of course library lending must have always been a source of contention for publishers as users don't pay for rented books, but this new service makes it more convenient, which may scare Penguin and other publishers."

Driving home the point, the post continued, "Amazon has been known to be pushy about new features, usually for the betterment of its users, but sometimes to get an edge on the competition." A number of publishers have complained that their books have turned up among the offerings on the Kindle Owner's Lending Library, even though they have chosen not to participate in the program. Publishers Weekly made a similar argument, asserting that Penguin's move, as well as the stance of the other large publishers, "is yet another sign that despite considerable talk of librarians and publishers coming together to work out solutions, tension over digital content is in fact escalating. In 2011 alone, two major publishers have scaled back their policy on library ebooks; [and] the Authors Guild is suing university libraries over its plan to digitize out-of-print and orphan works for use in an educational setting."

Librarians, encouraged by the dramatic increase in e-book borrowing since the September launch of OverDrive's library lending program for the Kindle, are eager to refute the publishers' complaints. OverDrive executives say that e-book checkouts have tripled this year over 2010, with two million new users signed up as digital borrowers. According to Publishers Weekly, Ruth Liebmann, director of account marketing at Random House, made the best case on behalf of the libraries earlier this year. "A library book does not compete with a sale," she said, "A library book is a sale." Libraries are comparable to independent booksellers as a percentage of business, and they "never send books back." Liebmann said that Random House's goal was to have books in libraries in multiple formats, as they are in retail. That may well turn out to be the long-term position, but in the meantime, as the spokesman said, the company's policy for library e-book sales is under active review.

Digital Trends sees the dispute as a tug-of-war between publishers and Amazon, in which the libraries are caught in the middle. "Is this an industry squirming because times are changing or is this Amazon pushing its power too far?" The question is an intriguing one.

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