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HarperCollinsGate: Some Thoughts

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As pretty much everyone in the library and publishing world now knows, HarperCollins recently instituted a new access model for sales of its ebooks to libraries: a library ebook from HC can now only be “checked out” 26 times before the access license expires and must be repurchased.

What this amounts to is a change of model and an increase in price: where once the library would purchase an HC ebook once and lend it an unlimited number of times, the library now effectively subscribes to the book, and the subscription must be renewed after a certain number of circulations, making popular books more expensive for a library to keep in its collection than less-popular ones.

What to make of this change? Librarians are outraged, of course, and have expressed their concern with various degrees of heat. Karen Schneider, blogging at FreeRangeLibrarian, implicitly characterized the new policy as an attack on readers’ rights and on the written word itself. Kate Sheehan, at Loose Cannon Librarian, discussed the issue in a somewhat more nuanced way. There are calls for a boycott: librarians Brett Bonfield and Gabriel Farrell quickly established a one-page website called BoycottHarperCollins.com, while Andy Woodworth, a library blogger at Agnostic, Maybe helpfully proposes five different levels of protest that readers can choose depending on their comfort level; these range from “Boycott HarperCollins entirely” to “Remove HarperCollins titles from book displays and recommended reading list or pamphlets.” And some local boycotts are actually in place: Library Journal reports that “the Central/Western Massachusetts Automated Resource Sharing consortium (C/W Mars) which serves 155 libraries, decided last week to suspend, effective [March 7], the purchase of any new HarperCollins titles for the digital catalog.” Some other consortia and cooperatives have taken similar steps.

How has HarperCollins responded to the uproar? Awkwardly. In a remarkably tone-deaf “open letter to librarians” , HarperCollins explained that “our prior e-book policy for libraries dates back almost 10 years to a time when the number of e-book readers was too small to measure,” and pointed out that with e-book readers on track to number 40 million by the end of this year, the ten-year-old model needed a rethink.

Fair enough. But HarperCollins then makes a very typical mistake, one that will be familiar to anyone who’s ever read a public statement from a journal publisher defending a massive price increase: “We are looking,” HarperCollins sniffs, “to balance the mission and needs of libraries and their patrons with those of authors and booksellers, so that the library channel can thrive alongside the growing e-book retail channel.” So, in other words: HC is drastically raising the cost of ongoing access to its e-book list so that libraries can “thrive.” Of course — it’s for our own good! How silly of us not to see it that way to begin with.

HarperCollins apparently believes that limiting the number of uses per e-book purchase is going to increase library purchases of high-demand titles, and they may be right. But if HarperCollins is really concerned about the welfare of authors, then it needs to be looking at sales of its whole list, not just its bestsellers. Nicholas Jackson, in a piece at TheAtlantic.com, quotes Bonfield and Farrell as predicting that HC’s new policy could, in fact, lead libraries to buy more e-copies of popular titles—but they point out that there is also “a good chance that libraries will spend the same amount on e-books they are already spending but offer less variety because they would have to buy more copies of the most popular items.”

That’s a very good point. Readers have little brand loyalty when it comes to publishers; we love authors, not imprints. (Try to imagine someone saying ”Oh honey, if you’re going to the library, would you pick up a HarperCollins book for me?”) So if a library has to buy fewer ebooks because of an HC price hike, that dip in sales is just as likely to hurt the HarperCollins list as any other publisher’s. In other words, a library that is forced to buy a bestselling HC ebook three times may well forego the purchase of two other unique HarperCollins titles—not in a spirit of boycott, but simply because the money for those extra purchases has to come from somewhere.

On the other hand, take that logic too far and it simply becomes an argument for an infinite regress of price; any price could theoretically be high enough to cannibalize sales of other products.

So what’s the correct response? If I could answer that definitively, I’d be making a lot more money as a consultant than I’m currently making as a librarian. But I think it’s safe to say two things:

  1. As I argued in my last Scholarly Kitchen posting, the marketplace rewards pricing practices that are sustainable, regardless of whether or not they’re “fair.” A publisher that tries to defend demonstrably unsustainable price increases by appeals to fairness (or, more cynically, the Greater Good) is missing the point, and will likely end up undermining its own market strength. The library world’s response to HarperCollins’s proposed model strongly suggests (though does not prove) the unsustainability of that model.
  2. A boycott may make one feel righteous, but it’s a very blunt instrument of protest. If HarperCollins’s books were printed by seven-year-old children in a sweatshop, then a brand-wide boycott might make moral sense. But as a response to a price increase in one subcategory of the publisher’s product line, a boycott is perhaps a bit lacking in nuance. It seems to me that ceasing to buy the product that is overpriced while continuing to buy other HC products that are priced acceptably would serve the same goal in two ways: by both punishing the unacceptable model and rewarding the acceptable one.

What will happen next? I suspect that HarperCollins will find a way to surrender partially and with as little loss of face as can still be managed. I also suspect that while the library world is celebrating its victory, HarperCollins will figure out some other way to make the same amount of money. If they’re smart, they will also have learned something about how and how not to respond to an angry customer base.

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About Rick Anderson

I'm Associate Dean for Scholarly Resources & Collections in the J. Willard Marriott Library at the University of Utah.

Discussion

10 thoughts on “HarperCollinsGate: Some Thoughts

  1. At Tools of Change, Margaret Atwood delivered a great speech questioning how many players in the supply chain one author can support. She noted that authors are being paid less with ebooks and asked to do more promotion. As I read your post, I’m wonder whether ‘book renewal’ counts as a sale and if the author is being disadvantaged in this business model.

    Posted by Judy Luther | Mar 21, 2011, 9:25 am
  2. Peter Brantley has been making the point that the pricing of premium or preferred content is likely to force out “micro” content, as budgets are finite. I think this is a valid point and warrants further reflection.

    Posted by Joseph Esposito | Mar 21, 2011, 10:58 am
    • Joe, by “micro” does Brantley mean low-demand, “long tail”-type content?

      Posted by Rick Anderson | Mar 21, 2011, 11:50 am
      • Uh, yes, but . . . . I am writing him now to have him look at these comments. My understanding is that Peter believes that the idea of a “short head” and a “long tail” is itself a creature of legacy mass media and that small communities loosely organized will create their own publishing ecosystems. They only look like the Long Tail if you are sitting at Random House or in Hollywood.

        Posted by Joseph Esposito | Mar 21, 2011, 1:58 pm
      • Rick,

        one of the things that I am concerned about is that if limited-use licensing arrangements become more dominant, it will restrict the range of circulating books by collapsing library expenditures toward best selling front-list titles and making it difficult for mid-list or small publisher books to obtain library penetration. It could also restrict curation of more local or limited market work acquisition by libraries – e.g., street lit in Queens, or Hmong narratives in the Midwest, etc.

        Generally speaking, I suspect there will be a movement toward platforms providing lending services on behalf of libraries. If libraries have a hand in constructing those, they will turn out very differently than if they are delivered by entities not in the business of being concerned about the diversity of human narrative and story-telling.

        Posted by Peter Brantley | Mar 21, 2011, 2:38 pm
  3. Another nail in the coffin of the “mid-list” book author, if the HC model spreads.

    Posted by Sandy Thatcher | Mar 21, 2011, 11:43 am
  4. I don’t buy this argument that mid-list authors will suffer any more than they do today. Libraries are under budget pressure now, even without ebooks, and presumably still manage to tread the fine line between supplying multiple copies of popular (print) titles and offering a range of less popular works.

    I also think there is remarkably little talk about the savings associated with the actual process of lending ebooks. Done right, it should not cost five times as much to lend an ebook as the ebook itself costs, as is the case with print today. This should free up some budget to share with publishers, authors and patrons via increased book purchases.

    @Peter Brantley says:
    “Generally speaking, I suspect there will be a movement toward platforms providing lending services on behalf of libraries. If libraries have a hand in constructing those, they will turn out very differently than if they are delivered by entities not in the business of being concerned about the diversity of human narrative and story-telling.”

    If by this you mean that libraries should take control of (shared) ebook lending platforms and not abdicate this key technology to vertically-integrated services like OverDrive, NetLibrary, etc, I couldn’t agree more. Librarians direct anger at HC for seeking a recurring income, but there is little mention of the fact they are paying recurring annual fees to OverDrive etc just to retain access to the ebooks they’ve “bought”. And the more they buy under this model, the harder it will be to cancel their OverDrive etc contracts since they’ll lose access to their entire collections. I suspect it will be technology providers, not publishers, who will really be in the driver’s seat setting costs down the track. Libraries should take charge of developing lending platforms which, among other things, give them independent control of their collections.

    Posted by nztaylor | Mar 22, 2011, 5:31 am
  5. I have to vent, here. Sorry. Feeling ranty today.

    I’m the acquisitions librarian at a small academic institution, and can say that there’s no way we will repeatedly pay for the same book. We don’t have the staff to babysit a weirdo-workflow forced on us by a single publisher, and our cataloging department has no capacity at all to manage random disappearance of electronic titles from our collection. Luckily, because we are academic, we have little need for material from Harper Collins. But we need to send a clear message that other publishers getting this brainstorm may do so at their peril.

    We’re talking about monographs, here, not rollercoaster rides. Harper Collins is really saying that if a student cites a book, then has to re-consult it — or if an entire class uses it, an academic library would conceivably have to re-buy the book after a single semester; or even after a month. This is far worse that the posited ‘imposition of the disadvantages of print onto an electronic resource’.

    Very worst of all, it is obvious that some executive at Harper Collins had a nightmare about libraries, woke up screaming, and then went tearing into work with this harebrained idea. In other words, the decision was made in a complete data vacuum, based entirely on fear. I promise you. Harper Collins has *no idea* how much of their revenue has traditionally comes from libraries ordering replacement copies of print books.

    Some questions:
    So. If a library has fewer than 26 checkouts of an HC title in, say… a year, can they have a pro-rata credit? Because unlike Harper Collins, I’d bet most libraries could produce those numbers before the end of business tomorrow.

    Can Harper Collins seriously be fantasizing that ‘The hot mom’s handbook’ will be checked out 26 times? Are they dreaming of 26 2-week checkouts and replacement after a year? Can they really be thinking that libraries will re-buy that title when it disappears? I’d say they think a lot of themselves. Can they be thinking that libraries will even buy their books in the first place, knowing it will have to be cataloged — and then ‘withdrawn’ from the catalog when it turns into a pumpkin at some unknown time, and not as the result of the library’s decision? And gosh, I hope the purchasing libraries don’t pay that ostensibly money-saving NetLibrary 5-year hosting fee for the most fabulous of their Harper Collins titles, ’cause that’s generally about 50% of the list price.

    What is to be gained by anyone, if a book’s availability is so limited that even getting on the waiting list is ‘iffy’? I am pretty sure that most integrated library systems don’t allow a library to limit its wait-list to 25 names — but of course I could be wrong. That way, at least, the 27 interested person would know right away that it was no go.

    I wonder whether publishers will ever understand that libraries are 1. customers, and 2. advertisers of their products who are paying for that privilege – ?

    And what happens when Harper Collins decides that our Kindle editions of their books should disappear after we’ve opened them five or six times?

    Once again, a publisher bares to the world its ignorance of its core business. What they’re doing is not different than if a cookware manufacturer were to market a line of pots & pans with the warning “do not use in food preparation.”

    In trying to protect their industry, Harper Collins are rendering their product useless.

    Posted by thorn | Mar 23, 2011, 11:47 am

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