Hachette’s recent big price increase coupled with Random House’s large increase earlier this year got me thinking. Does the publishing community understand why librarians would balk at increases on the order of 100% or 200%?
A newly released economic report (pdf), which was written by renowned economists Drs. Stanley M. Besen and Sheila Nataraj Kirby, provides at least part of the answer. In the economic lexicon, price is determined by the library’s “willingness to pay.” Just what it sounds like — the price that a library is willing to pay for an ebook is determined by the perceived value accorded by library users and any additional costs that the library user must incur (in time and energy) to access the title. A big bonus for ebooks is that the library user is not required to visit the library to obtain and return ebooks. Another is that the library user does not have to bother with returning a book or paying a late fee because ebooks are never overdue. Library users don’t have to lug along heavy books. In this sense, the library would be willing to pay more for an ebook than the comparable print book.
But the costs of producing an ebook are less than a print book, so shouldn’t the cost differentiation be reflected in the price? Publishers still have to pay royalties to authors, copyedit, design and market the ebook in addition to making digital copies in multiple formats and distributing these copies to vendors who have varying upload protocols. But after those costs are incurred, producing additional copies of ebooks compared to print are negligible. Therefore, in this cost-oriented analysis, the library would expect to pay less for an ebook than a print book.
Other ebook characteristics are not beneficial for libraries. Ebooks are sold under the same loan model as print books, one copy-one user model, effectively negating a prime feature of digital books — simultaneous use. Ebooks are accessed through vendors rather than owned by libraries. Libraries typically have no guarantee that user exceptions under copyright law or even the ability to retain the title is ensured. With some publishers, loans are capped, so once the limit is reached, libraries have to buy access to the content again.
For the publishers that do sell to libraries, “front list titles” may be embargoed or unavailable for purchase. Some libraries offer the option for users to buy the title if unavailable at the library creating sales for the publishers — yes, selling for the publishers. And at this time, ebooks often do not have significantly increased functionality over print books. Considering these overall factors and others, why would a library pay more for an ebook than its print counterpart?
While we protest ebook prices that substantially exceed the price of the same title in print, it can be worse. Truly egregious behavior is refusing to sell ebooks to libraries at all. Seems like this policy involves more than economics, but also raises questions about the responsibility of corporations to be good citizens in the communities in which they operate.
OITP Program Director