Library Loans Are a Double-Edged Sword

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

libraries, ebooks, app, publishers, authorsDenmark experienced rapid growth in digital lending from libraries between 2011 and 2015. At first this was a welcome source of new revenue for publishers. But by the middle of 2015, the digital lending market had grown even larger than the commercial market for digital book sales. Similar to the New York Public Library app, SimplyE, the national Danish library launched its own digital lending app, eReolen, which considerably simplified ebook borrowing, allowing users to borrow and read in just one click, increasing the amount of digital books borrowed.

Mofibo, the leading subscription service provider in Denmark, told book business news outlet Bogmarkedet that 16 percent of the provider’s customers said the reason they terminated their subscriptions was that they were able to get the same books for free at the library. At this point, an increased opposition from publishers and local resellers of ebooks started moving from the director’s office to the media.

Publishers Took a Stand

By late 2015, the third largest publisher in Denmark, Politikens Forlag, stepped in and said that they were willing to completely withdraw their books from the libraries if a new way of lending digital books was not found. At that time, the publishing director of Politiken Forlag, Lene Juul, said to the newspaper Berlingske (loosely translated): “The lending of digital books has grown rampant. The trend at the eReolen, where books can be lent for free to the consumer, is a slippery slope that has to be stopped now, because it can have devastating effects for the development of the book market in general.”

In Denmark, the libraries have a legal right to lend books without having to get permission from publishers. However, this is not the case for digital books, and by late 2015 the publishers decided to use this to their advantage. Many of the largest Danish publishers, like Gyldendal, withdrew their books from the libraries by the January 1, 2016.

Juul told Berlingske (loosely translated): “We are interested in having digital books that can be lent, but the model where you are able to loan books without restriction is not viable relative to having a sustainable market for ebooks and audiobooks.”

Finding the Equilibrium

It would appear that the withdrawal of the large publishers had the desired effect. Digital books sold now account for about 67 percent of the market relative to library borrows in Denmark.

In neighboring Sweden, lending has continued uninterrupted for several years, and an estimated 72 percent of all ebooks consumed are borrowed from the public libraries. This has put pressure on the market, driving down the prices of digital books. Today the average sales price of an ebook relative to its paper cousin is 28 percent lower (including VAT), and that is even taking into account that physical books have a VAT of 6 percent compared to the 25 percent on digital books.

When looking at possible solutions for finding a natural equilibrium between the public sector and the private market, publishers have begun campaigning for the introduction of limits on the amount of loans made by libraries. One of the suggested solutions is to introduce “friction” when users borrow books. However, it is never a good solution to structurally disappoint the public by making them wait months for their books or use a complicated borrowing process.

Having the libraries pay for entertainment raises even more questions as to the boundaries of the public sector and what it should be paying for. Access to information has been the prevailing argument for letting libraries enter the digital age, but if this is the accepted role of libraries, does this mean that the public should also have free access to other entertainment formats, like music and video? And if this paradigm of thinking is continued, should the public have free access to Internet as well?

In the UK, Labour leader Jeremy Corbyn has made public his support for highlighting “the clear and present danger” to Britain’s public library service. He has thus launched a public debate about the role of public libraries in Britain today and in the future. The adverse effects that the private market of digital book sales suffers by having a very active library service to compete with have been demonstrated. Now it is up to the publishers and resellers to weigh the pros and cons and to create a healthy coexistence of libraries and resellers.

There is no easy solution as to what the role of public libraries should be. However, one thing is clear: we need to be able to have a well-functioning private market in order to pay for the books produced by authors and publishers.


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5 thoughts on “Library Loans Are a Double-Edged Sword

  1. Patricia Genat

    What ridiculous arguments with no solid base of fact and neatly forgetting that many other drivers forced down the cost of eBooks. Primarily Amazon and the initial combination of greed and bad strategy for this new format from traditional publishers.
    Remember that every book lent to a library patron HAS been purchased by the library from the publisher and is a good marketing and discovery tool for readers and writers.
    If the writer truly wanted to create a better environment for commercial success of digital books then there are some alternatives which do not require the wholesale denigration of the core of the public library system.
    Create an environment where publishers and libraries and booksellers together build market and readers rather than the 19th century response of closing down a channel because it is not understood.
    Library managers where are you in this debate? Organise some round tables with publishers. Invite them in to understand your challenges and remind them of the considerable value of your purchases.

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  2. AuthorPalessa

    Of course there is sales erosion but I also want to protect the public library. I practically lived there before digital came along and made things more readily accessible. Hell, I still love going there. A good, big, quiet library is just the best. I think there is a way to integrate libraries into marketing strategies. For example, I’d I’m offer in a book for free as the first of the series, I would love to get that book in more hands during that time. Borrow this book until xyz time free, there is a lot of marketing potential there that would help all parties. I’m not a library scientist but there has to be a way to create a win-win.

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  3. Koz

    I am in America, and there may be differences between the Scandinavian and American markets that I’m not familiar with. The role of public libraries is fairly simple, its the same as copyright and patent protection – to promote the spread of useful information and the arts. This is a good that societies have valued for hundreds of years, and one enshrined in the US Constitution.

    The most unfortunate thing is that the author here equates what he sells with entertainment. I’m sure some of the books being checked out of libraries contain useful information that leads to a broader understanding, which in turn leads to more useful information. Even literature has some value to an individual and society. 😉

    When it comes to ebooks, I have long favored a cost per circulation model where, like UK libraries do with physical books, an author would receive a small royalty every time their book circulates, rather than being paid for the book up front. Libraries would still have to ration circulation based on their budget, but authors and publishers would still get paid. Under such a model, libraries may be willing to open up their databases to a publishers entire catalog and let the public decide which items are valuable. If they are publishing quality books, the public will respond. Ebook sales are booming over here and no one is suggesting that libraries are killing the market. They didn’t kill the DVD market either, even though they circulated millions of DVDs.

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  4. LIzzie Newell

    Maybe writers and publishers could be subsidized. A block of money generated from taxes could be distributed to writers and publishers based on how often books are lent. If publishers and writers aren’t paid, they won’t write and produce high quality book. Donating to libraries is a good thing to do and often makes sense as a business decision, but it should be done by choice. Librarians, library cleaning services, and library construction contractors aren’t asked to work for free. I say good on Danish publishers for withdrawing their donations until a better system is worked out.

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