On the blog of The Society for Scholarly Publishing, The Scholarly Kitchen, Rick Anderson has a pretty good summary of the HarperCollins library e-book uproar, in which HarperCollins imposed a 26-checkout limit before library e-books would have to be repurchased. Yesterday I was talking about the ways publishers are failing to connect with consumers, and this turns out to be another example:
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.
Anderson points out that this new policy could simply lead libraries to spend the same amount on HarperCollins e-books as they had before, but concentrate it on the most popular titles, meaning that midlist authors who formerly saw some of those library purchase funds could get left out in the cold.
He points out that it really doesn’t matter whether pricing practices are “fair”, just whether they’re sustainable, and the broad uproar over HC’s price changes suggests they are not sustainable in the long run. Though on the other hand, a boycott may be a bit overly broad in terms of response to a price increase in one subcategory of HC’s product line. He suspects that in the end HarperCollins will figure out how to come to some kind of face-saving compromise, and extract the same amount of extra money somewhere else.
“Remarkably tone-deaf” seems to describe a lot of industry communications with consumers in the last little while. The way that, after the agency pricing spat with Amazon first kicked off, Macmillan addressed all their immediate discussion to authors, illustrators, and literary agents while having no words for consumers for weeks just promoted a slow boil. Nobody likes to feel ignored, especially when suppliers unilaterally decide to raise prices.
But I have to admit, after thinking about it, that it’s not clear just how badly damaging this miscommunication really is. A lot of the voices that speak up in our comments, and in the blogs I read, come from a pretty vocal minority who are loudly dissatisfied with publisher actions and can tell you why in detail (myself included). However, I suspect that most consumers just don’t pay attention and simply vote with their pocketbooks by not buying stuff that costs too much (or reluctantly buying it when it’s by an author they have to read right away). Publishers live or die based on the purchasing decisions of these consumers, not on the angry loudmouth bloggers.
I suspect that most consumers just don’t pay attention and simply vote with their pocketbooks by not buying stuff that costs too much (or reluctantly buying it when it’s by an author they have to read right away).
I think this is the crucial issue in these discussions. Yes, ebook purchases are skyrocketing right now–so did DVD purchases when movies & tv shows were first being released on them in massive numbers. Yay; the new tech has caught on. But in order for those to be sustainable customers in the long run–over the next several decades–they have to feel they’re getting value for their money.
People are used to thinking that if they spend $15 on a “book,” they’ve made a potential lifelong purchase. Doesn’t matter if they drop it at a bus stop next week; they *could* keep it and hand it to their grandchildren. Publishers are blithely ignoring that assumption, and while that won’t matter over the next couple of years as people try out the new tech, the decision to treat ebooks like movie rentals without telling the customers will eventually result in customers just drifting away, without ever making a conscious decision not to buy ebooks.
The video rental shops didn’t close because people boycotted them; someone came up with a better method to give people access to that content. And for ebooks–the cloud that works for movies is one option, but there are plenty of authors and publishers offering customers control of their purchases instead. And it’s hard for temporary to compete with permanent.
I suspect a large portion of the problem is that publishers aren’t really certain how to deal with the e-reader market, so they try to apply old models to new media.
In the past, if a library book was checked out frequently, it would eventually start to fall apart and the library would have to buy a replacement. So libraries — who are not exactly flush with money right now — look at ebooks and go, “Oh, wonderful! A book that doesn’t fall apart, so we can save money here and use it elsewhere.” But the publishers look at this and say, “well, we don’t want to lose money, but an ebook never wears out so we aren’t going to sell replacement. Let’s insist the ebook can only be checked out X times before they have to relicense it! We don’t lose money that way, and everybody wins!”
This is just one of many, many places where applying old models to new media doesn’t work well.
A very good post Elfwreck.
Rachel I believe you are very close to the mark. Let’s face it the track record of many publishers has been atrocious, despite being given many years warning they are just waking up to the new paradigm now… amazing. Looking at the HC behaviour it is easy to see the blinkered ‘short termism’ of their top brass coming through. After all they get their bonus’ based on this years performance. What happens in five years time will be someone else’s problem.
Howard, as someone who has written at length about his ideas regarding libraries and eBook lending rights (e.g it most likely won’t work), why don’t you agree with this move by Harper Collins? What would you have encouraged them to do differently? Not offer eBooks at all?
anon – the article is about ‘failure to connect’ not just policy. And just because I have opined on the fact that imho Library online lending cannot survive into a future where all eBooks can be borrowed instead of bought …. doesn’t make HC’s policy the right one.
Howard. Ok, fair enough. I agree Harper Collins is great at coming across poorly to their readership. I also agree that the 26 time limit may not be THE answer for publishers, but it does address one of the concerns you’ve mentioned in the past, and at least it DOES offer library patrons an ability to get the book, which some of the other ‘Big 6’ don’t allow. What do you suggest a publisher do in regards to library eBook policy? Do you think your answer might also be construed as being a ‘failure to connect’ too?
Failure to connect means market strategy and communicating with customers, to me. At a time of enormous flux in the industry and much controversy about prices, DRM, geo rights etc. I find it a bizarre thing to do to come out with such a radical and negative policy almost designed to rile people.
The concerns I have expressed about viability don’t apply until the market is far more advanced than it is now.
What is the problem that HC tried to solve ? I don’t see one. What have they to gain ? I don’t see any upside.
If they agreed with me (…) then they should have let time pass, while working with the wider industry to look at how the lending market develops over the coming two or three years and work on solutions together with all sides.
Again, it looks to me like short term Board Room policy driven by panicky, knee jerk, reactions to a changing market that they don’t understand.