Pricing Models for Library Books

Once upon a time, in a land far, far away, Section 109 of the US copyright law, affectionately known as the First Sale principle, reigned supreme, and all was well. The happy inhabitants of the land could buy copyrighted books and do with them as they wish. They could use them to line their bird cages, balance a tippy chair or table, lend them out, or resell them so that others can do the same. (In the most extreme of situations, they may even read these books.)

But black magic soon found its way into the kingdom. Like most insidious concoctions, the evil power came in a benign, even promising-to-do-good form — that of an e-book. What could be more bewitching? The thrill of instant gratification in downloading a book; the seductive figure that is $9.99; the ability to search; the Herculean ease of carrying around hundreds, nay, even thousands of books, on a light, feathery, magical device; the facility to borrow and lend from the great libraries that dot the landscape of the kingdom . . . OH NO!

The black magic was beyond control of Section 109. Its power were too strong for copyright; instead, it fell under the jurisdiction of a license, and in a license, e.g. a contract, the great sway of First Sale did not hold. The inhabitants of this once magical land were not able to do with their rightfully bought ebooks as they wish. They could not lend them out, except with explicit consent that may or may not be granted in the license. This consent, even when it was given, was chillingly Scrooge. Once (ever) per Kindle book for a period not exceeding 14 days for the ordinary consumer, and not at all for libraries (although this is set to change some time later this year). Indeed, it was the libraries that suffer most ruinously: they can lend out a HarperCollins library e-book no more than 26 times and were shut out of e-book lending altogether by two other powerful wizards, Simon&Schuster and Macmillan.

It seems to me that the reason publishers restrict e-book lending by libraries is because they have not found a pricing scheme that proves satisfactorily profitable. Since the one-off, sold, you-do-with-it-as-you-like business model is no longer good enough, I want to quickly run down the (short) list of what other pricing structures are possible.

  1. Subscription: books can be sold like software, such as SAS, which is licensed on a yearly basis. You can think of it like a rental — libraries would pay X dollars per year for access to a book. After the year is over, the libraries can elect to keep renting the book, usually for less money per subsequent year as the book “depreciates” in value.  Incidentally, this is the model that libraries currently use for journals, and they’re definitely unhappy with the price inflation that’s happened with these subscriptions.
  2. Per-use pricing: this is like a subscription in that it’s a a pay-as-you-go system. However, instead of paying for a fixed amount of access time, libraries would pay a fee every time the book is lent. Users can “browse” the book before checking it out with the snippet view, or sample chapter of the sort ebook vendors like Amazon and Google Books now offer.

While both options sound like they inevitably lead higher unit-cost for libraries, I believe this needs not be the case if libraries collaborate with each other and cut down on collection duplication effort. After all, it’s both easier and less expensive to do an instantaneous “interlibrary loan” of electronic materials than it is of physical objects. In theory, this should allow libraries to do less just-in-case acquisition and instead just pay for what they actually use.

As usual, I’m sure there are plenty of obstacles and reasons why neither pricing scheme has been adopted. Please let me know what they are!

(PS. In the “research” I did prior to writing this article, I read some excellent blogs. They’re much better than mine! So if you find yourself reading these lines, may I suggest you upgrade your reading experience? I can always be your sentimental favorite, but here’s the link of the deluxe Copyright and Technology blog.)

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4 Responses to Pricing Models for Library Books

  1. teasandbooks says:

    PS. It’s September 1st! That means I now have 2 months worth of blogging. The “Archives” link on the sidebar now has 2 entries! Woo!

    (I’m leaving this as a reply to make my blog look more popular. And, not to generate spurious email notifications.)

  2. Esa says:

    When my archive list flipped into another month I also had a private moment and patted my own back once or twice, okay three times. Congrats!

    PS. I may use your tactic and leave myself a comment too. I did once inadvertantly,
    click ‘like’ on a couple of my own posts.

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