Simon & Schuster, Macmillan Express Concerns About Library Ebook Lending After ‘Positive’ Talks with ALA

Although the American Library Association and major publishers are talking to each other about ebook lending, it seems they are going to cordially disagree for the foreseeable future — even as more librarians offer evidence that some of the publishers’ concerns may not be completely justified and the CEO for OverDrive says he is “bullish for 2012.”

“We haven’t found a business model that works for us or our authors,” said Michelle Fadlalla, the director of library marketing at Simon & Schuster. “No vendor has come in with the right solution for us,” she said.

Fadlalla was among a contingent of Simon & Schuster executives, including Carolyn Reidy, the company’s president and CEO, who met recently with ALA officials in New York.  The ALA contingent also met with Random House, Macmillan, Penguin, and Perseus.

Random House and Perseus offer their ebooks to libraries, but Macmillan and Simon & Schuster don’t and Penguin only offers its backlist.

Molly Raphael, ALA’s president, said in a blog posting on Wednesday that publishers and libraries both want to bring authors and readers together but that some of their goals diverge.  She said a key issue at each meeting was publishers’ concern about sales since the ebook lending transaction presents less “friction” than the traditional print transaction.

“The online availability of ebooks alters this friction calculation, and publishers are concerned that the ready download-ability of library ebooks could have an adverse effect on sales,” Raphael said.

Macmillan executives expressed to ALA their concerns about elending and “its ramifications on the future of our business,” according to Alison Lazarus, the president of sales for Macmillan.

“We want to insure that customers who have typically been book buyers do not migrate their purchasing into borrowing as accessibility to our books becomes frictionless,” Lazarus said. “This would imperil our retailers, wholesalers, authors and ourselves and would ultimately be detrimental to libraries,” she said.

Lazarus described the meeting as open and productive and she, along with John Sargent, Macmillan’s CEO, and Talia Sherer, the director of library marketing, discussed with the ALA contingent several new models that “might make lending possible,” and they agreed to continue talking with each other. Lazarus said the company expressed its “absolute support and appreciation” for what libraries do for the company’s books and authors.

However, Monique Sendze, the associate director of IT for the Douglas County Libraries, which has been cultivating an innovative ebook program, said a concern about the cannibalization of sales was not justified. She cited her own library’s numbers as well as the results from Library Journal’s Patron Profiles study.

“I can say that based on my numbers of what we have seen from our ‘Buy Now’ links within our catalogs, that from January 1 to January 23 we had 10,000 people that clicked on the ‘Buy Now’ links,” she said.

Sendze said such numbers indicate that libraries are complementing the business of publishers.

“I don’t think that by us lending books to patrons we’re actually taking money out of their pocketbooks,” Sendze said. “We’re really a great marketing channel for them,” she said.

Ebook circulation at Douglas County rose 175 percent in 2011, while print circulation declined for the first time in 20 years, so limitations on access to ebooks is frustrating, Sendze said. The library has more than doubled its ebook budget to $850,000 for 2012.

“We can’t find books to buy. That’s a shame. Finding books to buy should not be a problem that any public library should have,” Sendze said.

The LJ survey showed that more than 50 percent of all library users go on to purchase books by an author they were introduced to in the library.

Barbara Genco, a former director of collection development at the Brooklyn Public Library, is the project manager for Patron Profiles. She said that in the ebook world librarians and libraries are “either considered sluts because we give it away for free, or that we are going to pirate everything.”

“I think that one of the concerns that a lot of us have is that we think the big world of publishing seems to be completely befuddled by the library channel,” Genco said. “I think they understood us when they were selling print, but I think they are completely mystified about our needs and the ways we manage and secure content in this new ebook world,” she said.

Sendze and Genco both spoke at the Digital Book World (DBW) conference held recently in New York.

Fadlalla declined to provide specifics about how Simon & Schuster evaluates proposed business models, only noting that it involved a variety of factors, but she said that the company’s director of digital business development, Douglas Stambaugh, was meeting regularly with different library ebook vendors, such as OverDrive.

“We are looking for a model that might work for us,” she said.

Steve Potash, the CEO of OverDrive, said he was “bullish for 2012,” and OverDrive is going to start, with due regard for privacy, aggregating data to help authors and publishers better understand who is looking for their books and how they discover them. Such data may bring out opportunities to connect library readers with the publishers’ titles, Potash said.

“So, I think the stock of libraries and librarians for the value proposition is going to finally be realized by many of the publishers [in 2012],” he said at DBW.

Some of the publishers revealed a rather startling misperception about library operations, according to Raphael.

“Some publishers had the impression that libraries lend to whomever visited their respective websites, thus making collections available virtually worldwide without restriction,” Raphael said.

A benefit of the meeting was to allay such concerns, she said. All the parties described the meetings as constructive, positive dialogs that they pledge to continue in the future.

“We don’t want this to be the last discussion that we have,” Fadlalla said.