What Agency Pricing and EBook Lending Limits Mean for Readers

At first when I thought about the latest eBook news, this piece was going to be a mini rant about how publishers haven’t got a clue about eBooks and how popular they’ve become. But I suspect that isn’t entirely the case. According to the Association of American Publishers, eBook sales for 2010 increased dramatically, rising to 164.4% with eBooks bringing in $441 million, compared to eBook sales of 61.3 million in 2008. EBook sales have jumped 623% since 2008. Quoting Publishers Weekly, “For the first 10 months of the year, e-book sales from the 14 houses rose 171.3%, to $345.3%, 8.7% of the trade sales of reporting publishers…adult hardcover sales from 17 reporting houses fell 7.7%, and sales from 9 mass market houses were down 14.3%. Sales of trade paperbacks from 19 publishers were flat.”

From the figures above, it looks like readers are changing more and more from printed books to eBooks, and surely publishers know that. The Book Industry Study Group (BSIG) did three different studies in 2010 on eBooks finding that readers are picking eBooks over paper because of the affordability. Over the past year, this for the most part has been eliminated with agency pricing. For those that are new to this discussion of agency pricing, the bookseller is unable to discount eBooks, the price is set by the publisher in contrast to the discounts that booksellers are able to make on printed books. So many times the eBook costs more then the actual printed copy.

The problem with this for me as a reader is the preceived value. With a printed book I own it, allowing me to trade it, give it away, loan it freely to my friends. For the most part, none of this is available with eBooks. In addition, with printed books, the publisher has to pay for paper, shipping and so on. Since the cost of an eBook should be less, and I don’t have all the benefits that a print book gives me, I would expect to spend less. However, as a reader, it seems that publisher policies are throwing up roadblocks in an area that has actually shown growth in this economy. Why do I say this? Over the last week two different announcements have been made affecting e-books. First HarperCollins is seeking to limit the number of times your library can loan digital e-book to 26 times, and then the library must purchase another license. The New York Times article on the subject is here. Yesterday, Random House announced that they switching to Agency Pricing. With these two announcements publishers are affecting both availability and cost.

There are several different book sites that have already discussed the HarperCollins policy, and I would add to them by saying that this announcement sets a precedent that from a reader’s perspective, should be upsetting. Librarian in Black addressed it in such distinct way that I am just going to quote her:
“I believe that authors, writers, and publishers can flourish when their works are readily available on the widest range of media. I believe that authors, writers, and publishers can thrive when readers are given the maximum amount of freedom to access, annotate, and share with other readers, helping this content find new audiences and markets.”
HarperCollins request is contrary to all of the above. Libraries are looking to maximize their dwindling funds, and seeking ways to provide current media to their patrons. I use the library to discover new authors, but I doubt my library will be buying as many eBooks from this publisher. And why should libraries purchase eBooks that they cannot lend freely, when they can provide a hard copy with a longer life span then 26 patrons? HarperCollins explanation for the change is that unlimited access to eBooks by patrons will hurt eBook sales. As of right now tensions are high between HarperCollins and librarians, with some even going to the extreme of setting up web pages to encourage boycott of HarperCollins books as described by Publishers Weekly here.

I have had my e-reader (Kindle) for three years. I love it. At first my biggest concern was the availability of eBooks. Publishers were slow to offer all books in that format. Now most books are available but they cost the same as the printed copy and I refused to pay the same price. As the Agency six continues to devalue me as a consumer, I am taking my business to other publishers. As far as I know, Harlequin, McGraw-Hill, and O’Reilly Media are the primary holdsouts against agency pricing. Harlequin seems not only seems to appreciate me as a eBook customer, they also offer special promotions to readers of their print versions as well. Luckily they have many authors that I love. Also, I have looked more at the smaller independent publishers of eBooks. As of right now, I have two eBooks on pre-order with a released date of March 22. Both books are published by Random House. If the pricing stays the same, then I will buy the books. If the pricing increases, I plan to cancel both. I have already requested the hardback from my library, just in case. I will buy the paperback, if I find it discounted.

How do you feel about HarperCollins move to require libraries to buy a new licence for an e-books after it has been checked out 26 times? Do you think that this is feasible for libraries, facing budget cuts? If you have an e-reader are you still buying eBooks priced the same as paper copy or have these pricing policies affected your buying decisions as a reader of eBooks?

– Leigh Davis