First You Get the Power, Then You Get the Money: The problems with eBook lending.

With the eBook pricing war still raging between publishers and e-tailers, it is too easy to forget about a related, underlying issue: the systems behind eBook lending. I use systems in plural, because there is no standardization to any part in the process, whether on the level of authors, publishers, distributors, reading devices, lending platforms, libraries, or consumers. With libraries conforming to demand for digital content, and eBook retailers rolling out their own models for eBook lending, systems for borrowing eBooks are getting more convoluted by the day. Confusion begets confusion, and as the intricate connections between the creators of these systems become strained by changing contracts, pricing models, and lack of standardized digital rights management, well, it’s no wonder that eBook lending is a bit of a mess. A lack of standardization is understandable and, perhaps, inevitable, given that efforts to standardize and control eBook pricing on the part of publishers were thwarted by accusations of collusion. There is a lot of fear surrounding eBook lending, most of it on legal grounds. The question of ownership and copyright infringement due to lending practices has led to witch hunts, while the take-down of smaller lending platforms has left larger companies to run rampant and hoard all the treasure in their figurative mountain caves. The question of ownership over the content or digital files (because even that distinction is debatable) has finally led to a situation where the only compromise is to throw barriers in front of library patrons. Solutions to this problem can only be found through analysis and cooperation, in every step of the eBook lending chain. First, we must consider the authors and publishers, and how added barriers to content is fueled by misunderstanding and the fear of piracy. Second, we must consider the eBook lending platforms utilized by libraries, and where the monopoly of lending really lies.

Does eBook lending make you nervous? You’re not alone.

There is a lot of mud being slung regarding this issue, and most of it is hitting publishers, who are being portrayed as a backward, fearful, and even stupid people. While it is easy to get up in arms, we must not let ourselves get distracted from the reasons why consumers and critics come to this conclusion. It may, perhaps, be the advent of digital rights management, which is unstandardized, easily hackable, and usually installed by a third party, removing the onus from the publishing house (at least from the point of view of said publishing house). In fact, all digital rights management seems to achieve is frustration on the part of the consumer, and the general feeling that the creators of eBooks care more about fighting piracy than they do about nurturing the content they lovingly brought into being. As Farhad Manjoo of Slate , the problem with the system is that authors and publishers live under constant fear that every borrowed eBook equals a lost sale 5. Manjoo goes on to explain that legal eBook lending creates a secondary market, which would “reduce incentives for piracy” 5. Because of eBook lending, publishers and authors can take advantage of the trend of personal discovery. With widely available content, readers who rely more on personal taste than on literary criticism or overarching marketing will be able to consume content and purchase a permanent copy. Conversely, the fight against lending may lead to “the sort of large-scale, Napster-like file-trading operations we once saw in the music business” 5. It does appear that the best way to fight piracy is through ease of access, rather than through a system of barriers to content. And it’s true that because of a lack of communication or understanding, publishers may not realize this. Anecdotal research shows that many members of the publishing industry know that the effects of digital rights management are not worth their implementation. But what is book publishing but trying to keep everyone happy all at once? Individuals in this industry are not necessarily savvy to the social workings of the internet, and may not see that file-sharing is not synonymous with piracy. With Amazon now making eBooks from certain publishers lendable (with satisfactory barriers such as a two-week limit and disallowing simultaneous access), some authors have risen up to defend their content against cyber pirates. Unfortunately, the biggest success was against LendInk.com, a service that paired up Amazon users so they could borrow lendable books from each other. The site did not host content, and only utilized legal access to the Amazon database. That is, LendInk was doing nothing illegal. The root of the problem here is not that these books are available on sites like LendInk, but that the authors were unaware that electronic versions of their books were available for lending at all, as this was a matter of a contract signed between Amazon and the publisher (or rights-holder, technically). In this internet mob situation, Violet Blue of cnet observes that “It is obvious that the authors involved have limited technical understanding of digital goods” 2 And really, fighting eBook piracy by going after legal channels does appear a bit silly.

The Invisible Monopoly

The issue of legal eBook lending naturally leads us to the question of libraries. In terms of public libraries, issues arise with eBook lending because technology and demand far outstrip funding and definitive legal updates. My last paper 1 discussed the process and problems of digitizing backlists, while today new issues are surfacing. In addition to creating their own digital copies (which is expensive and legally dubious), libraries can now purchase licenses from publishers or distributors to lend eBooks. A common way to achieve this is by adopting lending platforms, from which the library purchases lending rights and subscribes to content. But still, this is an imperfect system. Take for example the case between OverDrive, an eBook lending platform, and the Kansas Digital Library Consortium. On the surface, OverDrive appears to be a perfect ally for libraries looking to increase their technological reach. Their main goal is to standardize eBook creation and facilitate usability 6, which I argue could be the only thing to save the system of disseminating digital content. The reality however, is all about money and power. The service offered by OverDrive includes an overhaul of the library’s website (for a fee), which is to be administrated and maintained by OverDrive (for a fee), and populated by content chosen by the library (for a fee), on top of a subscription for lending licenses, based on the check-out rate of the library’s branches (another fee)4. All fair and good, you may say; these are important services that OverDrive can’t be expected to perform for free. And that’s true. Indeed, the contract that the consortium signed indicated that the content purchased from OverDrive would then be owned by the library, and that any wish to export content to another lending platforms would be carried out by OverDrive, provided the library had the publishers’ consent to do so 3. Still very fair. However, channeling the ever-shifting Privacy Policies of certain social media sites, OverDrive informed the consortium in 2011 that costs would increase by 700% by 2014 4. When state librarian Jo Budler heard this, she decided to switch to cloud-based lending platform 3M and, wishing to retain ownership of the content which had cost $568,000 from December 2005 to June 20103 began contacting hundreds of publishers for permission to do so, even though they were “not sure [publishers’ permission] is absolutely required” 3. OverDrive, while waiting for publisher permissions to trickle in, negotiated funds and attempted to explain the contract, which they have since changed to retain ownership of all content “purchased” by libraries should they attempt to change lending platforms. As Budler muses, “now that they have competitors they are putting in that if you walk away from OverDrive you don’t take your content with you” 3.

While I don’t wish to diminish the need for eBook lending platforms, nor to portray OverDrive in a terrible, money-grabbing light, the ever-looming potential for monopoly is there. It is, however, only one aspect of the problem. While Libraries need to be able to afford content and trust continued access to it, users and readers must also be able to access it without added trouble. OverDrive’s commitment to standardization is admirable, and for them to hold the cards could mean wide use of EPUB3 and compatibility across all e-reading devices, which would facilitate the purchase and borrowing of eBooks across the board. But still, other barriers get thrown up all the time. On top of the fees libraries who use OverDrive’s lending platform must pay, they must also deal with a great variety of digital rights management, as well as publisher-installed lending regulations. For example, only HarperCollins has enforced a 26-download limit on its lendable eBooks before the library must purchase another copy. While this does mimic the lending-life of a print copy, it is an artificial barrier that feels like an artificial barrier. And with libraries losing funding across North America, and with lending platform fees rising exponentially, it’s no wonder that added security measures only spell added frustration.

How can we ease your pain?

The solution, I say, is standardization and openness in contracts and rights negotiations. While I did not mean to single out publishers and authors as somewhat clueless to the distinction between piracy and eBook lending, this confusion is still something that should be remedied, and can only be done so with openness and patience. A standardization of methodology is also necessary in the creation, distribution, and lending of content. Lending platforms and e-tailers should be able to standardize lending practices and distribution measures, such that authors can be comfortable that their copyright is protected, while publishers and e-tailers do not have to deal with outdated and hackable digital rights management. With industry standards, open negotiation, and technological education, we can ensure that nobody will be clueless about eBook lending in the future.

Works Cited

1. Blom, Sophie. Money, Knowledge, and Power: The struggle of technology in public libraries . Student Presentations and Papers. Canadian Centre for Studies in Publishing. 18 January, 2013. Web. 18 January, 2013.

2. Blue, Violet. Piracy witch hunt downs legit e-book lending Web site. cnet. 9 August, 2012. Web. 2 February 2013.

3. Kelley, Michael. Kansas State Librarian Argues Consortium Owns, Not Licenses, Content from OverDrive. Library Journal Archive, 20 June, 20122. Web. 3 February, 2013.

4. Kelley, Michael. Kansas State Librarian Goes Eyeball to Eyeball with OverDrive in Contract Talks. Library Journal Archive. 6 April, 2011. Web. 3 February, 2013.

5. Manjoo, Farhad. No Sharing Allowed: Amazon and book publishers stupid attempts to curtail e-book lending. Slate. 22 March, 2011. Web. 2 February, 2013.

6. Over Drive. About Page. Overdrive. 2013. Web. 31 January, 2013.

3 comments:

  1. Really interesting, Sophie!

    I’ve always found that the whole e-book lending thing feels dark and underhanded, even though in theory it’s no different from borrowing a paper copy from the library.

    Some sort of standardization would make the whole process so much more approachable for users. As things are, every time I borrow an e-book it feels like someone created all these jumps and hoops to deter me from borrowing. It makes illegally downloading a book from Pirate Bay seem friendly. It shouldn’t be like that.

    I like Farhad Manjoo’s idea that improving access to legal e-book lending would create a secondary market, which would then “reduce incentives for piracy.” Piracy will happen–it always has–but creating a new platform for lending could open up so many opportunities for libraries and publishers to collect user data they are otherwise losing to filesharing sites.

    I think that the biggest issue with DRM and e-books is that consumers expect all the rights and freedoms that they have with a paper book–to take it anywhere, share it with a friend, or borrow it from a library–and policy makers need to find ways to fulfil these needs. They need to be open about what the purchaser can and cannot do with a file once they purchase it.

  2. Ack, your paper ended too suddenly for me. I was interested in where you were going with Overdrive and the power struggle rights-holders are having with end-purchasers and the middlemen involved. Your conclusion seems to move this back into the hands of the rights holders when your argument is saying that the middlemen have the power. I want more!

    You might be interested in this article on Amazon’s patent to sell used ebooks
    http://www.publishersweekly.com/pw/by-topic/industry-news/bookselling/article/55849-amazon-poised-to-sell-used-e-books.html

    http://gizmodo.com/5982487/amazon-has-a-patent-to-sell-used-ebooks

  3. A nice and interesting overview of the confusing world that e-books are now. I say confusing because, as you have stated it too, there are so many forces at work trying to profit from the unregulated situation that e-publishing is now.

    Publishing houses are coerced to make electronic versions of its print books which are then sold on Amazon for example for a quarter of the price or less of the print issue. It affects the sales of the print issues, but then the publishers can do much as the e-tailers’ position is monopolistic. I do not see how and if this is going to change for the benefit of the publisher. I hope it will.

    Speaking of the monopoly it brings us to an issue of e-books lending. I find it rather upsetting that in spite of the technological improvement one would expect to be of help and disseminate knowledge easily and make it accessible, it appears that some entities in this chain of a publisher, distributor, e-tailer and user have find means to benefit from weak positions of others in the chain. In this case the weak ones are libraries that have been left with no choice.

    You tackled an important issue in your paper. Good job Sophie.

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