Hachette Taking a Close Look at Risks and Benefits of Library Ebook Lending
OverDrive reports "productive discussions"; HarperCollins says there is growing acceptance of its model; ALA commissions report from prominent economist to inform debate By Michael Kelley Aug 23, 2011Hachette Book Group has been doing a lot of legwork in recent months as part of an effort to decide whether it should increase its exposure to the library ebook market, reversing a previous decision that has kept Hachette's frontlist ebook titles out of library hands since July 2010.
Hachette activity has caused a premature stir in some library circles, and it comes as HarperCollins continues to evaluate the impact of the controversial business model it introduced in February to govern ebook circulation. At the same time, the American Library Association has hired a prominent expert in the economics of intellectual property rights to prepare a report that might help better inform the debate.
"It's an extremely sensitive issue and there is a lot of passion on both sides, and we've been working diligently here for months on it," said Maja Thomas, the senior vice president for Hachette Digital. Thomas has been meeting with librarians, library vendors, and others to gather information that the executive team at Hachette will pore over in the next few months before making any decision.
"I will present them with the opportunities and the risks, and then we'll debate it," she said.
Thomas emphasized that no decision has been made about whether Hachette wants to be in the market, and that any reports that a decision had already been made would be reporting "more progress than has been agreed on at an executive level," she said.
Some librarians contacted by LJ, excited about the prospect that they would once again have access to frontlist titles from the likes of Little, Brown, a division of Hachette Book Group, were under the impression that a deal had already been finalized.
However, there are promising signs.
"I can confirm that we have had productive discussions with Hachette about their go-forward strategy and are encouraged by them," said David Burleigh, the director of marketing for OverDrive. "With summer vacations winding down, we expect to know more soon," he said.
David Young, the chairman and CEO of Hachette Book Group, acknowledged back in May, during a Publishing Point Meetup interview with Michael Healy, the executive director of the Book Rights Registry, that the company wanted an accommodation with libraries but that it was a challenge finding the right business model.
"That is, I think, a really really big question, and I wish I knew the answer to it. All I know is we're putting a lot of thought into it. I'm meeting the president of the ALA in New Orleans in June and we're talking with our various partners around that. I think it's something that needs a lot of careful thought because if you let that particular genie out of the bottle and get it wrong then you could get yourself in all sorts of trouble. Should there be a library solution? I'm certain there should be, but what it is we haven't figured it out. We're putting a lot of thought and effort into it."
Carrie Russell, the director of the American Library Association's Program on Public Access to Information, confirmed that then-ALA President Roberta Stevens and ALA Executive Director Keith Fiels met with representatives from Hachette and HarperCollins at the annual convention to discuss publisher-library collaboration.
"I believe that Molly Raphael [ALA's new president] will be meeting with the Association of American Publishers in mid-September, and we expect that she will be meeting with some individual publishers in the fall that we already have been in contact with," Russell said. "The goal is to find common ground, share concerns, and explore business models. Obviously, ALA cannot order the publishers to conduct their business in the way that we want, but we can continue to explore options that are mutually beneficial," she said.
ALA has also hired Stanley Besen, a nationally recognized expert in the economics of intellectual property rights, to prepare a report by December on various e-book business models and their benefits and drawbacks. Besen could not be reached for comment.
Publisher concern after Harper cap flap
Finding a working business model for library ebook lending is fraught with tensions since in every agency publisher, including Hachette, there are some who vociferously oppose the idea and also are a bit gun shy after watching the explosion of criticism that greeted HarperCollins when it announced in February that it would be using a model that limited libraries to 26 circulations of an ebook title before having to renew the license on the title.
Thomas said Hachette is trying to find a model that is "safe" and will accommodate the needs of both publishers and libraries.
Josh Marwell, president of sales at HarperCollins, explained to LJ recently some of the considerations that went into their discussions about the library market before making their decision.
"Prior to announcing our new terms, in our analysis we took into account budgetary constraints, catalog lifecycles, and overall demand in the library channel. Our work led us to consider a number of models, including a term of sale based on time. Our conclusion was that the circulation cap provided the best value, since it is based on actual usage and not an arbitrarily set period of time," he said.
Marwell said that there has been an uptick in volume among libraries ordering for the first time under the new model, and that those opting not to license ebooks from the company to protest the policy have been dwindling.
