by Nancy Herther

eBooks and reading continue to be popular in libraries across the country, despite the continuing influence of other Internet-based entertainment media. A new report from the National Endowment for the Arts, U.S. Trends in Arts Attendance and Literary Reading: 2002–2017, conducted with support of the Census Bureau finds that “2017, 57.1 percent of U.S. adults (or 137.7 million people) did one or more of the types of reading” categorized as any books, poetry, plays and novels or short stories. Although the numbers were slightly less than in past surveys in general, “there were significant declines in the percentage of book-readers among women and/or those had attended or graduated from college but had pursued no graduate or professional degree.”

Due to the increasing diversity in published poetry, “among racial/ethnic subgroups, African Americans, Asian Americans, and other non-white, non-Hispanic groups now read poetry at the highest rates overall. Further, poetry-reading increased among Hispanics and non-Hispanic whites.” The study concludes that “the increases can be attributed to greater participation by different demographic groups.”  [graphic from page 11 & 13]

eBooks also saw dramatic increases in the NEA study, with “3.3 percent of all adults (or 56 million people) read[ing] one or more books on e-readers, tablets, computers, cell phones, or other electronic devices.”

Across the globe, book publishing is predicted to perform well in the coming years. According to IBISWorld analysts in a 2017 study, Over the last five years, the report notes “a transition toward digital technology, particularly eBooks, has created a fast-growing segment. However, they are difficult to price, as they are inherently different from printed products and relatively new to the publishing process.”  The study authors believe that, driven by “disposable income and literacy growth” the industry revenue is forecast to reach $115.5 billion by 2022.

In a report issued last June, IBISWorld reported that although U.S. eBook sales are “stagnant” due to “some restructuring over the five years to 2018 to adapt to evolving consumer preferences…physical books are making a resurgence.” Due to these pressures, IBISWorld forecasts revenue for the U.S. Book Publishing industry will decrease over the next five years at an annualized rate of 2.2% to $25.1 billion.”

The Association of American Publishers statistics on U.S. trade book sales from 2016-2017 found that total sales were down marginally by about $40 million, trade books grew by $50 million – due largely to growth in adult nonfiction works. However, in the first six months of 2018, sales rose 3.6% in the consumer market.  One interesting finding was that “for the first time, publisher sales to physical and online retail channels were approximately equal at $7.6 billion and $7.5 billion respectively in 2017. Within online retail channels, 43.2 percent were print formats, 27 percent were eBooks, 16.3 percent were instructional materials, 10.5 percent were downloaded audio, and 3.1 percent were physical audio or a different format.”

In an era of ongoing disruption in consumer, technological and political areas, concern for profitability and unease with changing roles and patterns that might be disrupting profits can be natural.  However, the relationships between readers and writers, publishers and libraries and amongst sales channels continue to roil the entire author-to-reader cycle.

MANY OPTIONS, MANY ISSUES

Among major publishers all have different strategies for selling eBooks to the public library systems. Good eReader has provided an excellent summary of current pricing and terms offered by major trade publishers for public libraries.  In summary:

Most of the Hachette Digital eBooks are sold for unlimited numbers of times in a one copy one user scheme. Hachette’s arrangement allows for a 26 loan system for each eBook – then the library must repay for continuing access. The charge is generally the same as for a hardcover version of that title.

Publishing powerhouse Penguin Random House – which includes  G. P. Putnam’s Sons, Penguin Press, Riverhead Books, Dutton, Viking, Penguin Books, Berkley Books, New American Library, Grosset & Dunlap, Puffin, Alfred A. Knopf, Ballantine, Bantam, Dell, and Doubleday – offers a perpetual licensing scheme which allows for one user at a time.

Macmillan’s Farrar Straus and Giroux, Henry Holt & Company, Palgrave Macmillan, Bedford/St. Martin’s, St. Martin’s Press, Tor Books, and others, offer their backlists on a one copy/one user lending model for two years or 52 checkouts. Libraries pay on average $25 per title. “Macmillan does not make available most of their frontlist titles to libraries for fear it will cannibalize their sales,” Michael Kozlowski notes. “TOR used to make all of their front-list titles available, but recently scaled back after sales started to decrease. Some Macmillan imprints do release all of the front-list eBooks to libraries, such as eBooks from their Children’s Publishing imprint.”

Simon and Schuster, Kozlowski explains, “has different terms for their front-list and backlist eBook titles. A frontlist title has a 12 month term before it has to be repurchased and adhere to the one copy, one user system. Each book can be loaned out an unlimited number of times during this period. Popular trade titles appear to be mainly in the $20-$30 range, with lower prices for romance. Backlist titles range in price, but don’t really sell for more than a paperback. Backlist books also can be kept in the system for two years, before they have to be repurchased.”

PENGUIN RANDOM HOUSE UNDERCUTS EBOOK TERMS FOR LIBRARIES

A recent New Republic article praised Penguin Random House (PRH): “Privately owned, the company has moveddeliberately, while publicly traded competitors like HarperCollins (which is owned by News Corp) and Simon & Schuster (CBS) have had to fend off pressures from shareholders. It has not used its gargantuan size — it controls more than half of the traditional literary marketplace according to many estimates — to take back territory from Amazon. Instead, it has focused on building equity and ensuring that it publishes the next generation of bestsellers. In so doing, Penguin Random House has built what may be the perfect corporate publishing house.” However, the article suggested that the era of the ‘perfect corporate publishing house’ may be over in this age of Amazon and digital access.

In a letter from Penguin Random House (PRH) vice president Skip Dye wrote to their library customers, PRH announced the end of the unlimited model, where libraries were able to pay an additional fee, retain perpetual access. As of October 1^st 2018, libraries will have access – at a lower fee – for a two-year period. “Most librarians,” Dye wrote, “are telling us they would rather pay lower prices across our frontlists and backlists, in exchange for a copy that expires after a given time period.”

The American Library Association (ALA) was quick and rather positive, believing it “represents a new and major development in the library eBook market…PRH’s change is neutral or even a bit positive for US libraries, although the impact on any specific library will depend on its circumstances.”  Libraries seeking to maintain copies of some eBooks would have to pay PRH every two years for ongoing access. The fee for adult trade eBooks will be $55 instead of $65, youth and children’s works will be $35 instead of $45. For academic and research libraries, these reductions certainly don’t appear to represent a major advantage.

The ALA report notes that “Still, the pricing for library eBooks remains high among all the Big Five publishers (PRH, Macmillan, Simon & Schuster, HarperCollins, and Hachette Book Group). Libraries continue to be charged a multiple of the price of either the consumer eBook or the print book.”  Time will tell.

TOR AND MACMILLAN ATTEMPT TO BETTER CONTROL EBOOK’S IMPACT

“Since its founding,” The Verge notes recently, “Tor has gone from a simple website to a full-fledged publishing operation. In addition to publishing shorter works of fiction, it also publishes a range of novelettes, novellas, and even some short novels.” In 2014, Tor expanded their operations to include a Macmillan imprint that would allow “authors to cater to eBook and mobile readers by releasing a short form that in turn promotes awareness of that author’s books on the shelf.”

“Each DRM-free title will be available exclusively for purchase” the release explained, “unlike the current fiction that is free on the site, and will have full publisher support behind it. It will have a heavy digital focus but all titles will be available via POD and audio formats.”

Fast forward four years, and in statements to libraries and few others, Tor and Macmillian notified libraries that as of July 2018, Tor “will be changing our eBook lending model to libraries as part of a test program to determine the impact of eLending on retail sales. Our current analysis on eLending indicates it is having a direct and adverse impact on retail eBook sales.” Noting that the “timing of the test period is open-ended” and will await results of the company’s participation in the new “Panorama Project, the first large-scale, data-driven research project focused on understanding the impact of library holdings on book discovery, author brand development, and retail sales.”

American Library Association (ALA) President Loida Garcia-Febo issued the following statement:

“The American Library Association and our members have worked diligently to increase access to and exposure for the widest range of eBooks and authors,” said Garcia-Febo. “Over years, ALA made great strides in working with publishers and distributors to better serve readers with increasingly robust digital collections. We remain committed to a vibrant and accessible reading ecosystem for all. I am dismayed now to see Tor bring forward a tired and unproven claim of library lending adversely affecting sales. This move undermines our shared commitment to readers and writers — particularly with no advance notice or discussion with libraries.” In fact, Macmillan references its involvement with the Panorama Project, which is a large-scale, data-driven research project focused on understanding the impact of library holdings on book discovery, author brand development, and sales. For this reason, this change by Tor — literally on the heels of Panorama’s launch—is particularly unexpected.”

PANORAMA – A NEW VISION?

“In fact,” Garcia-Febo continues, “Macmillan references its involvement with the Panorama Project, which is a large-scale, data-driven research project focused on understanding the impact of library holdings on book discovery, author brand development, and sales. For this reason, this change by Tor — literally on the heels of Panorama’s launch — is particularly unexpected and unwelcome.”

The Panorama Project is clear evidence from publishers that the availability and potential sales channels for eBooks continue to represent a major source of concern over disintermediation and perhaps even the future of traditional publishing itself.

The goals of Panorama are presented as questions that clearly continue to concern the industry:

Discovery

• “Do titles held in a high percentage of the country’s libraries have more visibility on search sites (such as Google and Bing) than titles held in a lower percentage of libraries?
• Does the fact that today’s libraries hold copies of a title in multiple formats (print, ebook, audiobook) impact discovery on search sites?
• Does the information contained in library catalogs (such as cover images, excerpts and reviews) help proliferate title information on discovery sites, social sites, and fan sites?

Brand Development

• Do library holdings impact author brand awareness on social media sites such as Facebook and reader sites such as Goodreads and Shelf Awareness?
• Do library holdings increase awareness of and sales of an author’s backlist titles?
• Do library promotions of a title and/or author impact awareness and sales?

Sales

• Do titles held in a high percentage of the country’s libraries have higher sales than titles held in a lower percentage of libraries?
• Do authors who have a high percentage of their titles circulating in libraries have higher sales than authors with a low percentage of their titles in library circulation?
• Does collaboration by a library (or library system) and local booksellers impact sales? If so how? And if the result is positive, are there best practices that can be replicated in other communities?”

The Panorama website notes that despite “over 200 years of successful collaboration developing and serving America’s readers. Surprisingly, there’s never been a comprehensive study on the impact of public libraries on book sales  — until the Panorama Project, the first large scale, data-driven research project.” Membership in the group is advertised as ‘open,’ and it is hoped that many readers and information professionals will participate.  With data on books, publishing, readers and libraries in the mix, we can all learn much by examining these issues.

Penguin Random House and Macmillan TOR are part of “The Big Five” (Hachette, HarperCollins, Macmillan, Penguin Random House, Simon & Schuster) and, as Kathleen McEvoy, EBSCO Information Services’ Vice President of Communications (and ATG columnist) cautions, there are major differences between public and academic library markets: “Public libraries buy multiple copies of a single title (as compared to academic libraries that buy just a single copy and avoid duplication), you can see that the impact of a single eBook reducing overall sales to just a single copy in their core markets would be a legitimate concern.”

“Project Panorama is an initiative to study the relationships between availability, discovery, usage and sales in public libraries,” McEvoy continues. “It is funded by Rakuten Overdrive (primarily a public library vendor). Ultimately it is the publisher’s bottom line that influences decision-making. Initiatives like Panorama will contribute. Many publishers, especially in the scholarly book market, have been focusing on sustainability more than growing profits in recent years.”

The Panorama Project is an open membership initiative that includes membership from libraries, publishing and distribution areas formed in August 2018. The formal Advisory Council includes a publisher, Skip Dye, as the Vice President of Library Marketing and Digital Sales and Vice President, Director of Sales Operations at Penguin Random House, LLC ; and Todd Carpenter of NISO. Initial funding for the Panorama Project is being provided by Rakuten OverDrive, Inc.

“America’s publishers, booksellers and public libraries have been working together to connect authors with readers since the first libraries were established in Colonial times. That’s over 200 years of successful collaboration developing and serving America’s readers. Surprisingly, there’s never been a comprehensive study on the impact of public libraries on book sales — until the Panorama Project, the first large scale, data-driven research project focused on understanding the impact of library holdings on book discovery, author brand development, and sales.”

TRUST, GOOD FAITH & THE FUTURE

In a very interesting recent article on “the politics of eBooks” by Yoonmo Sang in the International Journal of Media & Cultural Politics notes that “eBooks have emerged as one of the popular means of reading, but little is known about eBook usage by the general public and the ability of public lending libraries to serve their patrons are being constrained by various socio-cultural factors such as restrictive licensing agreements that publishers demand. This study…examines the shift towards the licensing of eBooks and the proprietary schemes of digital rights management with a particular focus on the diminishing capability of public lending libraries to advance the public interest in a democratic society. In the age of licensing, the mission of public libraries as ‘equalizing institutions’ should be upheld to the fullest.”

Perhaps publishers taking that ‘panoramic’ view of libraries, publishing and eBooks will provide a better vision for the future of libraries and publishers.  A recent Gallup poll of the image of various industries by Americans found that 43% of their respondents had positive perceptions about the publishing industry in the U.S. The top-rated computer industry had only 60% positive rankings. However, the disintermediation of communications brought by computer technologies is a real force and will continue to be so.  Public libraries and publishers have always been clear and valued allies in efforts to inform, entertain and ensure the literacy and informed citizenry of their populations.  Let’s hope this will continue.

Just as publishers and public libraries are dealing with uncertainty, academic libraries have many pain points today with publishers, especially over eBooks. The next part of this series looks at some of the issues that confound and concern academic libraries today.

Nancy K. Herther is librarian for Sociology & Anthropology at the University of Minnesota Libraries, Twin Cities campus. herther@umn.edu