HCOD, eBook User Bill of Rights and Math

There was a moment today when I looked at the facts in front of me and became genuinely concerned – for the first time ever – for the continued existence of libraries.

Some background

HarperCollins, book publisher, has told Overdrive, an eBook distributor that is a major supplier of digital content to libraries, that they are only going to let libraries circulate HarperCollins eBooks 26 times. After 26 check outs, presumably the eBook version of Logan’s Run will occur and libraries will have to purchase a new digital copy to circulate.

Librarians are mad. Again.  You can follow the public discussion on twitter by searching for the hashtag #HCOD

Besides a lot of angry rhetoric, two interesting things have resulted from this latest vendor/publisher  clash.  One, an attempt at a boycott of Harper Collins is being organized.   Two, Sarah Houghton-Jan (aka The Librarian in Black) has drafted an eBook Users Bill of Rights. (Full text appear at the bottom of this post)

As you may remember, Gentle Reader, I recently wrote about why I think a boycott probably won’t work in law libraries.  Law, as a discipline, is constantly being updated and large amounts of money are dependent on law libraries providing correct and up to date information to their patrons.   But what about the public libraries?  Can they really put enough pressure on publishers to bring them to heel?

WARNING.  MATH AND STATISTICS AND NUMBERS AHEAD.

I decided to check out some stats.  I really wanted just a basic number…how much of of publishers annual revenue comes from public libraries?   It wasn’t immediately obvious or easy to find…so I decided to try and figure it out myself.  I have two main sources of information: The American Association of Publishers annual sales report and a Public Libraries survey from the Institute of Museum and Libraries Services (IMLS).  Two caveats before we dive in: (1) I am not a trained statistician. Nor am I a public librarian. Nor do I even balance my checkbook.  And as my students will tell you, I have problems with basic addition and subtraction.  Which is all just a long way of saying, I could be totally wrong and these numbers don’t mean what I think they do. (2) The most recent numbers I could get was from 2008.  Given the rise in digital content since then, I’m sure some things have changed even though it’s only 2 year old data.

Okay, deep breath…I’ll put some summaries in along the way for resting points for the math adverse.

According to the AAP, the industry had the following net sales in 2008:

Trade 8,079,423,000
Audio 220,412,000
Religion 723, 872,000
eBooks 113,220,000

Net sales by AAP $ 9,136,927,000
Net sales minus eBooks $9,023,707,000

SUMMARY: The American Publishing Industry nets about 9 Billion dollars a year for print publications.    And now for the library numbers…

Total Budgetary Expenditures – 10,724,925,000
Budgetary Expenditures dedicated for Collections- 12.8 % of total or 1,372,790,400
Print Collection Expenditures – 69.3 % of Collections expenditures or 951,343,474
Print and electronic expenditures – 80.6 % of total or $1,106,469,062

Percentage of AAP Net Print Sales Attributable to Libraries – 10.5%
Percentage of AAP electronic and print sales attributable to public libraries – 12.1%

SUMMARY: Public libraries in the U.S. spend a little under a billion dollars a year on print materials.  This amounts to about 10 percent of the Publishing Industry’s net print sales.

Total U.S. circulation of materials – 2,277,549,000
Registered borrowers – 166,892,000
Checkouts per borrower – 13.6
Average price of book – $20
Value of library circulation $45,550,980,000
Value of circulation to each borrower: $272.00

SUMMARY: U.S. Libraries circulate about 2 billion items per year.  This means each person that has a library card averages about 13 checkouts a year.  Given that the average price of a book is about $20 (low estimate), that means the value of materials circulated by libraries is 45 Billion dollars or $270 to each borrower.

If each borrower changed one checkout to purchase – $3,750,063,240
If each borrower bought one eBook at $6.00 – Publishers would get $1,001,352,000.

SUMMARY: If current library users become direct buyers and changed just one check out to a purchase, it would amount to 3.7 Billion dollars in revenue for publishers, or about 4 times what they currently get from libraries in total.  If patrons transform one checkout to a digital purchase, that amounts to $1 billion, or roughly pretty close to what libraries spend now.

OKAY, THE MATH IS OVER. YOU CAN LOOK NOW.

Here’s where I got scared this morning.  I realized that an economic boycott probably won’t work for libraries.  Yes, libraries make up a decent amount of publishers’ customer base, but it’s pretty clear that libraries are a middle man that can easily get cut out of the publishing distribution scheme.  Then I had a moment of paranoid delusion where I thought that the publishing industry is deliberately trying to force libraries out distribution chain and the complexity of eBooks and DRM is all part of that plan.

That’s crazy, right? The publishing industry gaslighting libraries?  Crazy.

I think.

But anyway,  no matter what’s going on here, it appears that while libraries can put some economic pressure on publishers, the industry could survive – and may actually thrive – without libraries getting in the middle.   Any negotiations we do will be coming from a position of weakness.   Which brings me to the eBook User Bill of Rights…

I don’t like it.

I have a friend that, whenever someone mentions having a social media policy, flips their lid because they think that any general public activities policy/standards of behavior should cover social media activities.   In other words, the old content vs. container debate.   And I have to say, I’m a little disappointed that this Bill of Rights was limited to just eBooks.  I think if you’re going to do it and make a bill of rights, expand it out to all information consumers and types of information.

I also think, that given the weak negotiating position that libraries are in, it’s too confrontational.  I think a better way would be to include the Rights and Responsibilities of all participants in the information consumption chain.   I’ll be thinking about this more and trying to fill in the pieces myself, but here’s a rough idea:

I see four principle players:  Information Consumers (patrons), Information Creators (Authors), Information Distributors (publishers, other vendors) and Information Guardians (I had a hard time coming up with a term for this…Information Maintainers, Information Collectors, Information Preservers, Information Farmers…nothing seemed to adequately cover all that libraries do. The parallels between farmers and librarians is another post for another day, but trust me it’s there.)  Information Consumers have the right to expect much of what was said in the eBook User Bill of Rights.  But they also have a responsibility to respect the Intellectual property of creators and distributors.  Information Creators and Distributors have a right to make money from the Information business.  But they also have a responsibility to engage in fair business practices. Information Guardians have a right to preserve, protect and reuse information (within the bounds of the other rules.)   It’s going to have to be a balancing act and everyone involved will have to give and take a little. Libraries cannot simply demand to be heard anymore.

ETA: Here’s  an expansion of my thoughts.

***********

Here’s the full text of the O.G. eBook User Bill of Rights.  Think about them. Build your own.

The eBook User’s Bill of Rights is a statement of the basic freedoms that should be granted to all eBook users.

The eBook User’s Bill of Rights

Every eBook user should have the following rights:

* the right to use eBooks under guidelines that favor access over proprietary limitations
* the right to access eBooks on any technological platform, including the hardware and software the user chooses
* the right to annotate, quote passages, print, and share eBook content within the spirit of fair use and copyright
* the right of the first-sale doctrine extended to digital content, allowing the eBook owner the right to retain, archive, share, and re-sell purchased eBooks

I believe in the free market of information and ideas.

I believe that authors, writers, and publishers can flourish when their works are readily available on the widest range of media. I believe that authors, writers, and publishers can thrive when readers are given the maximum amount of freedom to access, annotate, and share with other readers, helping this content find new audiences and markets. I believe that eBook purchasers should enjoy the rights of the first-sale doctrine because eBooks are part of the greater cultural cornerstone of literacy, education, and information access.

Digital Rights Management (DRM), like a tariff, acts as a mechanism to inhibit this free exchange of ideas, literature, and information. Likewise, the current licensing arrangements mean that readers never possess ultimate control over their own personal reading material. These are not acceptable conditions for eBooks.

I am a reader. As a customer, I am entitled to be treated with respect and not as a potential criminal. As a consumer, I am entitled to make my own decisions about the eBooks that I buy or borrow.

I am concerned about the future of access to literature and information in eBooks. I ask readers, authors, publishers, retailers, librarians, software developers, and device manufacturers to support these eBook users’ rights.

These rights are yours. Now it is your turn to take a stand. To help spread the word, copy this entire post, add your own comments, remix it, and distribute it to others. Blog it, Tweet it (#ebookrights), Facebook it, email it, and post it on a telephone pole.

34 Comments on HCOD, eBook User Bill of Rights and Math

  1. AndyW
    February 28, 2011 at 11:55 pm (4 years ago)

    As this was created as a public domain document, how would you rephrase/remake the eBook Bill of Rights? I’ve been looking to see how many people would actually change it and what they would change it to since I consider it a starting point. How would you fix it?

  2. Sarah
    March 1, 2011 at 12:07 am (4 years ago)

    Last paragraph above initial eBook Users Bill of Rights is my starting point. In general, I would expand it to cover all types of information products and make it cover the rights and responsibilities of everyone involved in information creation, distribution and consumption.

  3. Royce Kitts
    March 1, 2011 at 12:49 am (4 years ago)

    Good stuff Glassmeyer. Top notch and thoughtful as always.

  4. Eric Hellman
    March 1, 2011 at 8:55 am (4 years ago)

    One comment on your book sales numbers. You’re comparing the AAP numbers, which are net sales, with library expenditures, which are gross. When I looked at the question of how big the library market is, last year, I came up with 5%, not 10%.

    http://go-to-hellman.blogspot.com/2010/01/numbers-for-libraries-and-book-market.html

    Although this reinforces your point about the leverage of libraries, it should be noted that in many categories, libraries are more important sources of revenue for publishers. Also, the library channel is a profitable one for publishers because the supply chain in more efficient. There are no returns for publishers to deal with, and libraries buy most of their materials in the first year of publication, which eliminates inventory costs.

  5. Sarah
    March 1, 2011 at 10:46 am (4 years ago)

    Oh, cool! Thanks for the update. Like I said, I’m an academic law librarian…I wasn’t entirely sure if my numbers were making sense. On my side of things we’ve basically got West and Lexis, subsidiaries of Reuters and Elesvier (respectively) and so our law market really is a drop in the bucket to the corporate bottom line. I was sort of hoping to discover that publics, at least, had some leverage. Not knowing anything, I was expecting to see about 30% of publishing market due to libraries. So the 10% shocked me. Your 4% number makes it even more clear that we need to rethink negotiating strategies. Thanks again!

  6. Keith
    March 1, 2011 at 10:51 am (4 years ago)

    You miss the point of outrage:

    “An organizer must stir up dissatisfaction and discontent… He must create a mechanism that can drain off the underlying guilt for having accepted the previous situation for so long a time. Out of this mechanism, a new community organization arises….
    “The job then is getting the people to move, to act, to participate; in short, to develop and harness the necessary power to effectively conflict with the prevailing patterns and change them. When those prominent in the status quo turn and label you an ‘agitator’ they are completely correct, for that is, in one word, your function—to agitate to the point of conflict.” Saul Alinsky, _Rules for Radicals_, p.117.

  7. Sarah
    March 1, 2011 at 10:57 am (4 years ago)

    No, I get outrage. Trust me, I’ve done my time on the protest line. There comes a point, however, that outrage isn’t enough. And a great danger in people thinking that it is.

    In this case, protests and boycotts are a nice thought, but at the end of the day, they’re probably not going to work. So let’s all start thinking of Plan B.

  8. Shawn
    March 1, 2011 at 11:37 am (4 years ago)

    I agree with much of what you say, particularly regarding a different approach to the Bill of Rights.

    But in terms of the boycott, there may be a few other issues to consider:

    1. So far, only HC has implemented this idea. If enough pressure can be put on this publisher, it may influence other publishers to rethink this kind of approach (particularly if funds that once went to HC are diverted to other publishers).

    2. People who buy books often do so after they discover an author or title at the library. If libraries don’t carry HC content, it may have some additional impact on other HC sale — particularly with future readers who will not discover their titles at the library.

    3. A boycott will also include words to patrons and potential shoppers. If patrons request HC titles that the library doesn’t carry, they might get a reply like this: “Because HC has engaged in a business practice that undermines the institution of public libraries and the free distribution of information, [insert your library system name] has joined other libraries throughout the country in boycotting HC. We will therefore be unable to acquire this title for you. While you may decide to purchase the book for yourself, we hope you will join us in our boycott, and instead choose titles from publishers who supports libraries. If so, you may be interested in one of these authors: …”

    These things cold increase the impact of a boycott on Harper Collins. Of course, if other publishers join HC, we’re in trouble…

  9. Sarah
    March 1, 2011 at 11:42 am (4 years ago)

    You touch on one of the problems with my raw numbers…I’m not sure how to quantify the additional value that libraries give to publishers, such as through book recommendation or introducing patrons to new authors or genres, etc.

  10. eli
    March 1, 2011 at 12:32 pm (4 years ago)

    Also, the AAP only represents 300 publishers. According to AAP’s press release, the actual book industry sales (not just AAP members) in 2008 were close to $25B. Bringing Library purchases below 5% of publishing industry sales. Regardless, you’re totally right, we have no leverage, and the publishers only have sales to gain by cutting libraries out of the channel.

  11. Kelly
    March 1, 2011 at 12:50 pm (4 years ago)

    Shawn’s point #2 is the one that I wanted to bring up too. Libraries spending is only part of the revenue they bring to a publisher through recommendation. Sadly, a value is hard to quantify. I am reluctant to purchase a new author so I will check them out from my library. If I like the stories, I often will end up purchasing them. If they aren’t in the library, chances are I won’t ever purchase them. Of course, this is a public library focused response.

  12. Jennifer
    March 1, 2011 at 1:28 pm (4 years ago)

    Even before the librarians organized a boycott, as a patron, I had decided to boycott HC. I’m also vocal and passionate and immediately went to my ebook community that I play in online and told them what was going on. I’m not to the point of stopping random people on the street and telling them but definitely all of my friends are going to be hearing about this – if they haven’t already – and I tend to hang out with book-loving and buying people. I agree with Shawn. Patrons care about their libraries. I imagine many would join in if they knew what was going on.

  13. Jennifer
    March 1, 2011 at 1:45 pm (4 years ago)

    I want to add to my above comment:

    I am choosing to boycott not to force HC into any particular action. I am boycotting because I’m not willing to support this publisher madness. I regularly choose companies to support or not to support based on how they treat communities and employees. I choose Trader Joe’s over Walmart and Costco over Sam’s Club. I won’t support Target because they give monies to hate campaigns. I buy from publishers that don’t tie up their ebooks with DRM and I buy directly from them instead of going through Amazon. I support companies that do business in a way that I can support and I am willing to take my business elsewhere if something changes.

    So instead of thinking of this as a boycott, I think of it as a choice as to what I am willing to support. If I shopped at Target, I’d be supporting hate campaigns directed at me. If I bought HC books, I’d be supporting the idea that I don’t own that very expensive ebook that I paid for. If libraries buy from HC, they are supporting the idea that they don’t have a voice and that patrons’ tax dollars are for wasting. I’d really rather that my library didn’t send that message.

  14. Eby
    March 1, 2011 at 6:24 pm (4 years ago)

    Another datapoint is HC’s open letter which gives as a reason for continuing with libraries “We count on librarians reading our books and spreading the word about our authors’ good works. “. Not much about actually purchasing the items.

    http://harperlibrary.typepad.com/my_weblog/2011/03/open-letter-to-librarians.html

    Also from overdrive’s blog post:

    “We did have an option to stop carrying or distributing HarperCollins eBooks to our library partners.”

    http://overdriveblogs.com/library/2011/03/01/a-message-from-overdrive-on-harpercollins-new-ebook-licensing-terms/

    If HC was ready to pull the entire collection and their post pretty much shows how much they care, it seems a boycott is fairly useless unless you are convincing of your value as a customer.

  15. Carrie Russell
    March 2, 2011 at 12:09 pm (4 years ago)

    The problem with a limited math analysis is not taking into account positive externalities of sales to libraries. A sale to a library is a lot more beneficial to society (especially in a democratic society) than a sale to a single consumer.

  16. Sarah
    March 2, 2011 at 12:16 pm (4 years ago)

    Yep. And if there’s one thing that big corporations care about, it’s benefiting society. Oh, wait…

    That was perhaps unnecessarily snarky. I’m sorry. Libraries are awesome. No one disagrees with that. But awesomeness and public good will don’t mean too much in business negotiations.

  17. Matt Williams
    March 2, 2011 at 4:00 pm (3 years ago)

    Most books published are not best-sellers. What most people purchase are best-sellers. Who buys the other stuff? Libraries mostly. So, do we become a world of just best-sellers?

    Another question is quality. Some mention authors cutting out the publishers such as the woman who has the number one ebook right now. All I can say is I hope the author who does that hires a good editor to work for or the quality of the canon will decline.

  18. Carrie Russell
    March 2, 2011 at 5:59 pm (3 years ago)

    Yes, I agree it’s true. Businesses don’t care about democracy, and unfortunately most members of the Congress and the Supreme Court don’t care about it either.

    But do you drop the argument because your opponent doesn’t care for it? That’s “too weak sister” for me, and I wouldn’t be a librarian if I just said “oh shucks, the math does not work for me, I guess I would rather have corporations to decide all of the rules for me.”

    There are other externalities that would have to be factored into your math analysis, nonetheless — and some of those are based in economics. One would have to monetize the benefit of lending in increasing book sales in general, for example.
    And there is data that demonstrates that.

  19. Scott
    March 2, 2011 at 9:35 pm (3 years ago)

    One other factor to think about is, are publishers – and the corporations that own them – “rational”? :-) By this I mean, do they base their decisions on an economic analysis? Or do emotions enter into those decisions as well? If the former, Library leverage is very small – whether 5% or 10% of the total market. But if the latter… what if you are a publisher and see you’re business model starting to fail, and then on top of that another 5-10% of your income disappears? Leverage can involve “when” you apply force, as well as where.

  20. kitpos
    April 24, 2011 at 8:38 pm (3 years ago)

    This may be a incredibly poor notion by Overdrive. It sounds like we’ll have but yet another format for libraries to choose from. So what I see is that libraries will have less selection as it has to buy ePub, audio, & now Kindle. So that is not going to be good overall for patrons. I for one do not want to see a book I want in Kindle only when there is an ePub version just because someone with a Kindle requested it that way. The way things work now is fine. They way they could work won’t be fine. Far from it. What this is going to do is possibly cut the amount of new eBooks at libraries in half.

14Pingbacks & Trackbacks on HCOD, eBook User Bill of Rights and Math

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  3. [...] about where the big conversations in librarianship are happening (or make them happen!). Or about Harper Collins and Libraries and why we already lost.  Or about women and leadership in our feminized profession.  Or about doing good work because [...]

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  5. [...] HCOD, eBook User Bill of Rights and Math by Sarah Glassmeyer - a good look at some numbers (added 3.2.2011 5:45am est) [...]

  6. [...] This excellent post by Sarah Glassmeyer does the maths and concludes that libraries simply don’t make up enough of publisher’s revenues for a boycott (which would only ever be partial if it happened in earnest at all) to be a game changer. There is no point in starting a fight if you don’t have a chance of winning the fight – you’ll end up bloodied, or having to back down. [...]

  7. [...] also need as many facts and statistics about what is true for our libraries when it comes to eBooks, especially in regards to cost and [...]

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  13. [...] se han planteado boicotear a la editorial pero no han tardado en darse cuenta que en esta batalla pierden más las bibliotecas que Harper Collins y que quejarse y no dar soluciones tampoco lleva a ninguna [...]

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