If you ever wanted evidence that supply and demand aren’t the only forces in the economic game, now you have it. There may be an invisible hand, but there’s now a visible hand, and it’s throttling things back in the case of libraries and e-books. The visible hand is the hand of publishers, and its goal is to slow the transition to e-books so that profit margins remain as robust as possible and the transition to e-reading remains manageable. Even as they do so, Amazon is being accused of being “predatory,” turning publishers’ knuckles white as they hold on for the ride.
Demand is outstripping supply in a world where supply should be endless. Adding insult to injury, librarians have one of their icons signing on with Amazon.com to curate sets of rescued book titles. And while publishers and librarians are both worried about what all this might mean for them, a unifying middle ground is hard to find.
An acute pressure points is that e-book demand has surged after the 2011 holidays, when millions of new e-readers were switched on. Immediately, libraries lending e-books fell behind, as a recent story in the Washington Post details:
Want to take out the new John Grisham? Get in line. As of Friday morning, 288 people were ahead of you in the Fairfax County Public Library system, waiting for one of 43 copies. You’d be the 268th person waiting for “The Girl With the Dragon Tattoo,” with 47 copies. And the Steve Jobs biography? Forget it. The publisher, Simon & Schuster, doesn’t make any of its digital titles available to libraries. Frustration is building on all sides: among borrowers who can’t get what they want when they want it; among librarians trying to stock their virtual shelves and working with limited budgets and little cooperation from some publishers; and among publishers who are fearful of piracy and wading into a digital future that could further destabilize their industry. In many cases, the publishers are limiting the number of e-books made available to libraries.
Publishers are nervous. Libraries are frustrated. Amazon has become a publisher and a major third-party for e-book checkouts at libraries. Apple has announced a textbook program. Google Books is far from dead.
The reliable contrast between abundance and scarcity is at the heart of the problem facing book publishers and libraries working their traditional exchanges.
Abundance creates one of the perceptual challenges for all involved — the perception that electronic resources are much cheaper and more abundant than physical items. In the age of scarcity, a publisher could sell one copy of “The Girl With the Dragon Tattoo” to a local library, and patrons would have understood what they’re competing for — a definite physical object that isn’t at the library when it’s checked out. Allow three e-book copies to be on deposit, and suddenly waiting for a copy seems odd. Out of the frustration this creates, pirating a copy seems a rational response.
Traditional publishers with their value chains and libraries with their place in the value chain are vulnerable. As Trey Ratcliff writes:
It turns out that tech companies — especially Apple and Amazon — are the new publishers. And this is, of course, because their technology disintermediates all the component steps required for a physical book. We have all seen the numbers about the growth of e-books and how every category is impinging on the traditional book categories.
Given the impressive profit margins of e-books, the ability for authors to sell a short book at a decent price (no demands for heft-making filler!), and marketing that works like magic with social media, e-books are allowing authors to move out of or avoid entirely traditional publishing houses, all while requiring less traditional editing and production work and selling in new ways — in short, a new value chain is emerging, the true sign of disruption. Books are being made, but in a new way, and with new players.
Attempting to live life the way they’ve always lived it — by preserving check-outs, throttling supply, and creating queues for e-books — publishers and libraries are only cementing their place in the past. One idea toward a different outcome? Perhaps instead of a library simply telling a patron that a book isn’t available, work with Amazon to create a consignment approach. The patron could have the book on their device for a week without charge and read up to 50% of the book in that time. If the e-book is returned to the library in that time, they can pick up where they stopped and it’s all still free. If not, they can buy the book (and the library gets a percentage of the sale), or they can wait it out.
Libraries have a great potential role in marketing e-books, but if they continue to think of themselves as the preservationists of physical artifacts, the emerging e-book platforms will leapfrog them. Publishers would also find a natural alignment here.
While publishers and libraries search for e-book answers compatible with patron expectations, Amazon, Apple, and others are developing platforms that will slowly guide book publishers and libraries into the future — a future in which they may or may not exist.