Beg, Borrow, Steal: eBook Rentals & Borrowing

The eBook market continues to grow worldwide at an astonishing rate. While the eBook format has been around for over a decade, the eBook market is really only four-years old. This rapid growth has brought with it rapid change which all corners of the book industry are grappling with; publishers, authors, retailers and libraries to name a few. The digital evolution of books has caught many unaware while others are leading the pack. One area of the book industry that is struggling to adapt is lending.

The issue of eBook ownership is a tenuous one. To lend an eBook to a friend or even loved one is difficult at best. Digital lending through a library should be relatively straight forward but is made overly complicated as publishers and authors grapple with rights, royalties and remuneration issues. Harper Collins for instance has applied a print-minded model where a library must pay for an eBook after every 27 borrows. The logic being a print book would need to be replaced after 27 borrows. An eBook that a library has in their database can also be out on loan to only one person at a time, which completely baffles me on the one hand (it’s a digital file, it can’t be out of stock!) but I understand the logic in limiting access. Authors are also looking at the way they are paid for loans as well. Currently an author receives a payment for every copy of their books that is held in a library. But how do you measure this with eBooks where a library’s catalogue can now be infinite?

While some publishers are trying to find a model to make eBook borrowing from libraries possible others are refusing all together to allow their books to be borrowed digitally. Some publishers are waiting for a uniform model to be adopted across the industry while others are steadfastly saying no. The prevailing attitude seems to be that if someone can afford an eReader then they don’t need to borrow eBooks. This attitude flies in the face of why we have libraries in the first place. Public libraries are there for everybody in the community, rich or poor. They are funded by taxpayers for the benefit of all taxpayers. They provide the community their information needs and are the cornerstone of education and literacy in our society. You don’t need to show a payslip to borrow a hardback from the library why should an eBook be different?   It also shows an ignorance of how libraries are using eBooks with many libraries making devices available to borrow as well as eBooks.

I don’t have a problem with eBook borrowing but I do think it should remain the domain of libraries only. Penguin stopped allowing their eBook catalogue to be borrowed after Amazon tried to institute an eBook lending program through their Prime service. Unfortunately this meant libraries lost Penguin books too but I support what Penguin were trying to do. Borrowing from libraries is in the public interest; borrowing from Amazon or other businesses is for their commercial interest and quite rightly should not be allowed.

Now Amazon is trying a new tact, eBook rentals. Instead of purchasing an eBook you can rent it for 30, 60, 90 or 120 days paying progressively more, but never more than buying the eBook outright. This raises some serious questions for the book industry.

Amazon devalued the worth of a book by pricing all their eBooks at $9.95 or below. Amazon’s eBook pricing changed readers’ perception of what a book should be worth. Before Amazon’s aggressive (and predatory) pricing a book would be published in hardcover (or trade paperback here in Australia) at a premium price; $US27 in the US ($30 here). Six to twelve months later a mass market edition or paperback would be published; $US8-$US12 in the US, (or $20 here). Books therefore had two markets to sell in. Some books sold well in one market, others sold well in both and the economics of this structure worked for the book industry; authors, publishers and booksellers.

Having eBooks priced at $9.99 effectively cannibalized these two markets as for the first time two editions, at different price points, competed against each other at the same time. (Audio has never really competed against print editions as price has been either higher or comparable). Making eBooks available to rent will only exasperate this process. It will also devalue ownership. This has already occurred to some extent with eBooks as you technically own a license to read an eBook, not the eBook itself, and we have seen instances where eBook licenses are revoked from readers. The perception of most consumers though is that they own an eBook just like a print book. Rentals will remove this perception as eBook licenses will expire.

So now we will not only train readers to judge the price they pay for books differently we will also train readers to judge the value of owning a book differently. And if an eBook becomes only $2 or $3 to rent for 30 days where is the harm in downloading a pirated copy for nothing? Piracy is not a battle you win enforcing restrictions, boundaries and limits. Piracy is a battle won on perception. If people believe they have ease of access, at a fair price, you will keep piracy to a minimum. If people can’t get the content they want, when they want it and/or feel they are being charged too much they will look for other sources, whatever they are.

It will be interesting to see which publishers and authors get on board with eBook rentals compared to library borrowing. This isn’t the only issue in the eBook market that is giving us all consternation, nor will it be the last, but it again shows that the industry is still trying to play catch up with eBooks while one aggressive player keeps moving forward. The book industry is by no means perfect but it is also not broken. But if we don’t support our public libraries through the digital transition they will become undermined and irrelevant to future generations. And if we allow a powerful retailer to rent books like videos the changes that will occur to our industry will be irreversible and I think fundamentally unsustainable for publishers, authors, retailers and most importantly readers.

3 thoughts on “Beg, Borrow, Steal: eBook Rentals & Borrowing

  1. Not a business minded person, I find it hard to understand Amazon’s way of doing things, and like Coles/Woolworths and other oversized bullies they make me want to go right out of my way just so I don’t give them my custom. But I know their prices, esp. Book Depository, are hard to argue with.

    if they start of cheap rental of ebooks I agree with your predictions. Public neighbourhood libraries though, are so much more than just a places to find a book to read. Playgroups, reading aloud groups, school functions and so on make them extremely relevant to local communities, but like bookshops they are going to have to increase and improve their range of services, as well as raise conciouness among the community about what is at stake.

    Those of us in the book/publishing/writing world know what’s happening but so many people I talk to are very unaware. If I gently point out to friends what they are doing by buying ebooks via Kindle or whatever, the response is usually that you can’t argue with price and convenience. But later will lament the loss of their local bookshop. The same may happen with libraries. I don’t know what the answers are, I only know that community awareness is vital if there is to be any chance at keeping a books and reading culture local, alive and flourishing.

  2. Amazon actually did authors and readers a favour by lowering book prices, which had become increasingly over-the-top. I managed a bookstore for nearly two decades – mostly before ebooks became a norm – and the price of books was the continual complaint of customers. With the lower prices, authors are now actually selling far more copies of their work – and also selling books that had been listed as out of print, and books the publishers wouldn’t reprint; readers are actually buying more as well. Seems to me to be a win-win situation…except for bookshops. Yet, while there have been a number of bookshops that have closed (including mine!) there are still some doing very well, and selling books at the same old high prices. There is still a market for quite a range of books that don’t fit comfortably in the ebook scene: picture books, many children’s books, classy big coffee table books, books that have a lot of pictures for whatever reason, books that need to be seen before people will be tempted to buy. Amazon hasn’t quite annihilated the bookselling world as yet, and in fact, is unlikely to do so.
    One other aspect that this article doesn’t mention: the amount authors were paid for each book had become increasingly smaller over the last several decades; the official amount was 10% of the cover price, but some publishers claimed it was 10% of the wholesale price. And then publishers would claim all sorts of other ‘costs’ that were charged against the authors’ entitlement. I remember one old writer coming into my shop with a royalty statement…he was being given one or two cents a copy for some of his titles by the publishers. Amazon, on the other hand, has been giving up 70% of the cover price to authors. It’s not surprising authors are ditching publishers left, right and centre.

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