In July, highlighting the incredible year 2014 was for access to ebooks, the American Library Association (ALA) released results of its 2014 “Digital Inclusion Survey” (digitalinclusion.umd.edu), which found that 90% of American libraries now lend ebooks, up from 76% in 2013. And the U.S. isn’t alone in this growth. In Britain, it has been estimated that the consumer ebook market will triple within the next 4 years, with ebooks outselling printed editions by 2018 (“Ebooks on Course to Outsell Printed Editions in UK by 2018”; theguardian.com/books/2014/jun/04/ebooks-outsell-printed-editions-books-2018). A recent report from the International Federation of Library Associations and Institutions (IFLA) focused on the challenges facing “ebooks and libraries in the global context when, on the one hand, five billion people (70% of the world’s population) do not have access to the Internet, while in developed countries technological advances in the provision of digital content mean that the commonly held understanding of what is an ebook is viewed as already outdated by informed observers” (“IFLA 2014 eLending Background Paper”; ifla.org/files/assets/hq/topics/e-lending/documents/
I have been watching this technology since the early models (sometimes called edutainment or simply multimedia) debuted in the 1980s. The logjams that have plagued ebook distribution in the past 10 years in the U.S. seem finally to have been broken up, and it looks like this problem will be resolved shortly within the rest of the world. The next phase will involve resolution of ownership/DRM issues, integration and access to the widening range of authors and publishing outlets, and, with PUB3 and other standards in place, a period of artistic and intellectual innovation that will make the very term “ebook” seem passé. However, before we can dream the future, it’s worthwhile to look at the incredible progress we’ve made.
The Big Five
All publishers make decisions about the pricing of their catalogs based on fair market value, competitive assessments, and other factors. However, the Big Five publishers—Hachette, HarperCollins, Macmillan, Penguin Random House, and Simon & Schuster—control more than 60% of all consumer book publishing in the U.S., so having them on board with licensing ebooks has been a significant issue for libraries of all types. After years of negotiation, concern, and limited trials, the Big Five trade publishers have finally all established ebook licensing programs with American libraries.
Each publisher sets its own licensing model—something we can expect will continue into the future—and the differing approaches are bound to impact purchasing/licensing decisions made by librarians. Pressure from the library marketplace will hopefully lead to the evolution of a more reasonable, standard approach; however, for the time being, we have a Mulligan’s stew of models:
Hachette offers nonexpiring, uncapped licenses to libraries, charging a 300% markup above retail on new ebooks. After the first year, the price will drop to 1.5 times the highest-price print edition.
HarperCollins gives libraries a nonexpiring license offer with a 26 loan cap per title on its ebooks.
Macmillan has a one-user, one-ebook license model that expires after 2 years or 52 loans.
Penguin (which continues to have its own policy even after the merger with Random House), like Simon & Schuster, has no loan cap, but a one-user, one-ebook annual license scheme.
Random House, like Hachette, offers nonexpiring, uncapped licenses to libraries, charging a 300% markup above retail on new ebooks.
Simon & Schuster has kept its separate licensing, which offers a one-user, one-ebook annual license scheme with no cap on the number of loans made.
Additionally, these publishers are also creating new partnerships to test other distribution needs. HarperCollins is now working with Ingram Content Group, Inc. (ingramcontent.com); BookShout (bookshout.com); and BitLit (bitlit.com) to more easily move its titles into independent bookstores and other markets. The company is also hoping to use its growing relationship with BitLit to allow users to get deeply discounted prices on digitized versions of its existing print book collections.
“Record labels, movie studios, and publishers do not exist to make their users happy but to make their shareholders happy,” notes consultant Joe Esposito. “What may appear to be sluggishness or lack of vision on the part of publishers may in fact be a shrewd understanding of their own interests.”
Amazon continues to try to squeeze the Big Five into contractual agreements more favorable to the retail giant. Hachette negotiations seem to be not only protracted but bloody, as Amazon seeks 30% of the profit on sales and to keep prices of all Hachette ebooks at or below $9.99. This battle has been fought quite publicly for months, and we can only hope it is solved by the time of this publication.
According to Penn State Press’ Tony Sanfilippo, subscription services such as Oyster (oysterbooks.com) are heavily weighted to self-published content and almost zero frontlist. At $9.95 a month, they may not see much uptake, at least not with any longevity. Still Sanfilippo maintains, if a service such as Oyster can manage to convince one of the Big Five to participate, it would be a game changer. He notes, “As Amazon at least is firing cannons over the Big Five specifically over ebooks, it seems unlikely that will happen.” Sanfilippo contends, “While subscriptions are likely to have a significant future in the ebook environment, it would seem to make more sense for it to begin with genre fiction than with a giant pile of self-published content without much curation or decent discovery systems.”
This year’s Data Conversion Laboratory & Bowker Survey on the Digital Publishing Industry (“DCL & Bowker 2014 Digital Publishing Survey”; dclab.com/resources/surveys/dcl-bowker-2014-digital-publishing) found ongoing concerns about production quality and other issues in the minds of the publishing community. “More and more publishers are planning to publish digitally,” Bowker’s Laura Dawson reports. “As a result, quality in conversion has become more important than ever, and cost is no longer as big a factor as it has been in the past. The challenge for publishers now is to ensure that all conversion and content quality is done with the greatest amount of care, especially to meet reader expectations.” Of the survey respondents, 84% are planning to publish digitally in 2014 (an increase of 21% from the prior year), and 52% said quality of digital conversion was the aspect of greatest concern. Sixty-eight percent of respondents said that quality affects ebook sales, stating that readers want the best quality possible, with 89% seeing quality editing being as important as it is for print. Significantly, respondents plan to publish digitally even in traditional print genres—nonfiction (37%), fiction (34%), technical content (30%), and training information (13%). (See Figure 1 on page 42.)
In 2014, the American Association of University Presses did a member survey, “Digital Book Publishing in the AAUP Community” (aaupnet.org/images/stories/data/2014digitalsurveyreport.pdf), and found that the conversion to electronic formats is also becoming the norm for scholarly publishing. (See Figure 2 below.) In the service, these scholarly presses note a commitment to the following issues: