July 24, 2014

Librarians Feel Sticker Shock as Price for Random House Ebooks Rises as Much as 300 Percent

From

(This story has been updated to clarify the meaning of “simultaneity” and include remarks from the North Texas Library Partners.)

New prices for Random House’s ebooks took effect on Thursday, and as the details emerged a number of librarians across the country expressed dismay at the doubling and tripling in prices they are seeing.

“We’re very concerned. These are tough times for libraries. It’s very tough here in Louisville,” said Debbe Oberhausen, manager of collection services, at the Louisville Free Public Library. “We want to provide this service, but this kind of pricing is really going to take a huge chunk of our budget,” she said.

On Wednesday, Oberhausen bought Eisenhower in War and Peace by Jean Edward Smith for $40 via OverDrive. On Thursday, the price was $120. The print version of the book, with the library’s discount, is a little over $20 (it retails at $40). For Blessings by Anna Quindlen the ebook price went from $15 to $45.

“We’re happy they are continuing to sell to libraries, very happy,” Oberhausen said. “But this price increase is really, really hard,” she said.

Random House, which first announced the price hike (without details) on February 2 when it reaffirmed its commitment to the library ebook market, provided the following breakdown for what it is now charging library ebook distributors:

  • Titles available in print as new hardcovers: $65- $85
  • Titles available for several months, or generally timed to paperback release: $25-$50
  • New children’s titles available in print as hardcovers: $35-$85
  • Older children’s titles and children’s paperbacks: $25-$45

“We believe our new library e-pricing reflects the high value placed on perpetuity of lending and simultaneity of availability for our titles,” said Stuart Applebaum, a Random House spokesperson. “Understandably, every library will have its own perspective on this topic, and we are prepared to listen, learn, and adapt as appropriate,” he said.

“Simultaneity” here means that Random House’s titles are available to libraries on the same date the retail edition is put on sale. It is not referring to simultaneous, multiple user access. The model remains one book, one user.

[The entire text of the statement Applebaum sent to LJ is reproduced at the end of this article.]

Applebaum said that the publishing house, which is the only one of the Big Six to make its ebooks available without restriction for library lending, is setting the library ebook price with “far less definitive, encompassing circulation data” than the sell-through information used to determine retail pricing.

“We are requesting data that libraries can share about their patrons’ borrowing patterns that over time will better enable us to establish mutually workable pricing levels that will best serve the overall e-book ecosystem,” Applebaum said.

LJ’s 2012 Book Buying Survey showed a 102 percent jump in ebook circulation, and 74 percent of the ebook patrons in LJ’s Patron Profiles report say they want even more ebooks in the ­library.

Applebaum said the new pricing does not affect Random House titles already in a library’s collection.

Random House’s increase was to distributors, such as OverDrive, which in turn can add its own increase on to what libraries ultimately pay. OverDrive, by far the largest distributor of ebooks to public libraries, declined to comment, but a number of librarians told LJ that the company holds closely information about its own markups.

The rationale for the price hike to distributors was to align ebook pricing with Random House’s Books on Tape audio book downloads for library lending.

“They’re aligning it with the e-audio version as a library edition price,” said Christopher Platt, the deputy director, collections and circulating operations, for the New York Public Library. “It would affect the number of units we acquire, but we’re not freaking out about it. They’re still in libraries after all,” he said.

Others also said they will have to rethink their collection decisions.

“They’ve tripled their prices on every title.  A book that a week ago we purchased for $28.00 now costs $84.00,” said Scarlett Fisher-Herreman, the technical services & collection development supervisor, at the Topeka and Shawnee County Public Library in Kansas, whose director, Gina Millsap, is seeking the presidency of the American Library Association. “I looked back at Random House titles we’ve purchased since December and looked up a number of titles, both new and titles they’ve had for years on Overdrive.  Everything has tripled in price:  kids, YA, adult, fiction, and nonfiction,” she said.

Fisher-Herreman, who had been bracing for an increase in the 50 percent range, said she found the tripling of price frustrating and surprising. For example, The 10 Easter Egg Hunters, a children’s title by Janet Schulman, was affordable at $8.99, but it now costs $26.97.

“We simply can’t afford to pay three times the price for the same titles.  I will be working with my collection development team to determine how we move forward now that we know the severity of the price increase,” Fisher-Herreman said.

At the North Texas Library Partners, Carolyn Brewer, the executive director, had her staff make a duplicate cart of a Random House order the library had just recently placed.  She found a 200 percent increase was the  norm, with some titles hitting the 300 percent mark.

“”I’m worried that, between the lack of content available and the new pricing structures, we won’t be able to meet the demand for popular materials,” Brewer said.

Trent Garcia, the electronic resources librarian at the San Francisco Public Library, also felt a bit nonplussed: glad that Random House was still in the market but concerned about “a pretty steep increase.”

“The impact I foresee is we won’t be able to purchase as many titles as we were before,” Garcia said. “And in terms of our holds ratio, how many additional copies we will be able to buy will probably be affected as well,” he said.

The holds on ebooks are already notoriously long in libraries across the country.

Kathy Petlewski, the electronic resources librarian at the Plymouth District Library in Plymouth, Michigan, wrote on her blog on Thursday after seeing the price increases:

The first thing that popped into my mind was that Random House must really hate libraries.  Perhaps this isn’t true, but it will take a lot of convincing for me to believe otherwise.  Do they not realize that libraries are hard hit by the economic downturn and that our budgets are shrinking.  How do they think we can afford to build a decent collection of e-books when we’re spending over $100 per book?  I am terribly disappointed by this latest turn of events.

Applebaum said the company remained committed to serving libraries.

“Throughout our long history of mutual respect and partnership with libraries we have endeavored to satisfy our shared goals,” Applebaum said. “We are certain our ongoing straightforward dialogues with them on library e-lending will continue to yield constructive results,” he said.

Here is the full text of the statement Random House sent to LJ:

Random House, Inc. is constantly experimenting, evaluating, and adjusting different retail price points for our e-books. With our price adjustments announced March 1 we are now doing the same for our library e-pricing, albeit with far less definitive, encompassing circulation data than the sell-through information we use to determine our retail pricing for e-titles. We are requesting data that libraries can share about their patrons’ borrowing patterns that over time will better enable us to establish mutually workable pricing levels that will best serve the overall e-book ecosystem.

Currently absent such information in quantity, it is important to reiterate that our guiding principles in setting these new e-prices are the unrestricted and perpetual availability of our complete frontlist and backlist of Random House, Inc. titles under a model of one-copy, one user. All our titles continue to be available to libraries day and date with the release of the retail edition.

We believe that pricing to libraries must account for the higher value of this institutional model, which permits e-books to be repeatedly circulated without limitation. The library e-book and the lending privileges it allows enables many more readers to enjoy that copy than a typical consumer copy. Therefore, Random House believes it has greater value, and should be priced accordingly.

For the most part, RH prices to library wholesalers for titles available in print as new hardcovers are now set in the range of $65- $85.
Titles available for several months, or generally timed to paperback release, will be decreased in price to a range of $25-$50.
New children’s titles available in print as hcs: $35-$85.
Older children’s titles and children’s paperbacks: $25-$45.

Of course, there will be some “outlier” titles whose respective e-pricing will be above–or below–these ranges, in parallel to their higher/lower level in print. (For example, note that the suggested physical retail price for the Robert Massie title being cited in some literary blogs is $35, higher than most hardcovers, so its corresponding library e-price is higher than the aforesaid price ranges)

As we first said last month, our new e-book pricing framework is to bring our titles in price-point symmetry with our Books on Tape audio book downloads for library lending. These long have carried a considerably higher purchase price point than our digital audio books purchased for individual consumption.

This new pricing will have no impact on Random House collections previously purchased by libraries.

We believe our new library e-pricing reflects the high value placed on perpetuity of lending and simultaneity of availability for our titles. Understandably, every library will have its own perspective on this topic, and we are prepared to listen, learn, and adapt as appropriate.

Throughout our long history of mutual respect and partnership with libraries we have endeavored to satisfy our shared goals. We are certain our ongoing straightforward dialogues with them on library e-lending will continue to yield constructive results.

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Michael Kelley About Michael Kelley

Michael Kelley is the former Editor-in-Chief, Library Journal.

Comments

  1. This is expected and, I believe will be norm–nit the exception as we move into the digital age. Even in the market place, companies like Netflix are jettisoning film publishers because of the racketing up of the price (Netflix dropped Starz). Consumers have been lulled into complacency by the Amazon “price as Trojan Horse” model and naively believe that this is universal. It is an anomaly intended to get people onto their platforms. Random House and other publishers are terrified of the “lending model” and see it as a big syphon for their bottom line. And since no one has really figured out the best and fairest way to deal with e-content, this story (well done, by the way) is just the tip of the digital glacier.

    • Vic Carter says:

      I think the question that is going to be asked in the very near future is: Why exactly do we need publishers like Random House?

    • elle mcmahon says:

      I have to say, I honestly do not see why the same model of libraries purchasing multiple copies (or even one copy) of a hard copy should be any different in the digital realm. The reasoning completely eludes me. One copy, one reader. About the only difference is the “in perpetuity,” as books have natural physical lives. So, build into the cost; put a limit on number of times a copy can be borrowed. Stats on that should be readily available from every library in the country, but public and academic. What is so hard about that? The two media (book/digital, along with while we’re at it DVDs and CDs) are really analogous to each other. Why the over-intellectualizing? Why oh why are the publishers raping libraries financially when they know how strapped they are? It makes no sense. This should be a seamless transition. Simple.

    • Shoot the Messenger says:

      @ Jeffrey Scherer:
      “Random House and other publishers are terrified of the ‘lending model’ and see it as a big syphon for their bottom line.”

      And yet Random House isn’t blind to the huge volume that libraries buy. At the Digital Book World conference in January 2011, Ruth Liebmann of Random House noted that the library market is roughly the same size as the indy bookseller market.

      On the same panel, George Coe of Baker & Taylor put a number on it. libraries buy $1.9 billion in books every year.

      You can find the hour-long presentation at:

      http://www.digitalbookworld.com/2011/where-do-libraries-fit/

      There’s an audio player halfway down the page. It starts to get interesting at about 20 minutes in.

    • Shoot the Messenger says:

      …So, if Random House and Penguin and Harper Collins don’t find a working model for ebooks, a growing slice of that $1.9-billion dollar pie, the publishers lose. Random and the gang do have a vested financial interest in producing a model that works. And they know it. They just haven’t found that model yet.

      The publishers don’t see the traditional treat-an-ebook-just-like-a-book model as viable for their business outlook. Libraries don’t see any of the new publisher-inflicted policies as viable for their public-service outlook. But we’re probably not going back.

      So let’s quit whining and instead negotiate our way forward. Let’s chart some new territory.

      And let’s come up with some solutions ourselves so that the new policies don’t all originate in the finance office of a big New York publisher.

  2. One thing libraries could do is make the process for independent authors wanting to get their digital books into libraries simpler. The Overdrive form that I’ve seen is an intimidating nightmare. I know many multi-published (by NY) authors who would happily make their backlists (and new indie titles) available to libraries in digital form if the process was easier. And I am sure library patrons would embrace those books.

  3. Debbie LeBel says:

    This is so frustrating! On Wednesday, I purchased a number of Random House ebooks for the library. This is how the prices compare from Wednesday to Thrusday: $5.95/$23.95, $19.50/$66, $18/$63, $20.96/$63, $43.99/$120. Sadly, the book that now sells for $120 is Robert Massie’s Catherine the Great. We can purchase the physical book for $24 after discount, and if I wanted to purchase the ebook as an …individual, I could buy it for $21.99. The relationship between publishers and libraries used to be so positive, but somewhere along the way, we (libraries) became the bad guys. The frustrating part is that Random House has drastically increased prices to libraries, under the guise of maintaining a relationship with libraries, while seemingly turning a blind eye to the pirating of ebooks.

  4. Why are they talking about “simultaneity” of access as a reason for the price hike? Overdrive is the main vendor, and they simply do not allow for any simultaneity–correct? So has Random House based their model on something that is just plain incorrect, and now they’ve revealed that they don’t even understand how their products are used??

    • I noted the “simultaneity” comment also. If Libraries were actually allowed to have simultaneous users on Ebooks, we could understand the higher prices, and we could even justify paying them since we wouldn’t need multiple copies. Overdrive and Random House, please work together to make this work for everyone!

    • K.G. Schneider says:

      Good catch. Either they don’t know their product or are betting that they can shine on others.

    • That’s what confused me as well–the word “simultaneity.” The prices would be more than justified if they did away with the “one copy, one user” model, but that doesn’t seem to be the case. So what do they mean by “simultaneity of availability”? Poor word choice. Anyway, the price increase is still better than making them unavailable. People must keep that in mind. They’re giving librarians a choice to buy them or not buy them. If librarians are upset, they should just not buy them. If the sales numbers go down, they’ll listen. Their decision is a business decision (a very complicated one) and has nothing to do with “hating” libraries as some are saying.

    • Michael Kelley Michael Kelley says:

      I believe simultaneity here means that Random House’s titles are available to libraries on the same date the retail edition is put on sale.

    • Susie Pasini says:

      I think the term “simultaneity” simply refers to the fact that they are allowing libraries to have access to the title on the same day it is released to the public in general. I think the term “perpetuity” is disingenuous. Maybe I can believe they are offering the “perpetuity” of the ebook format in which the title is being purchased presently, but what about when e-book format evolves, as it is sure to do pretty darn fast? In other words, it would be just like having to purchase the CD again when we owned the vinyl, or having to buy Blu-Ray, when we already have DVD. We aren’t purchasing or licensing the content itself, but the content as packaged in the present format.

      Applebaum is quoted, “Understandably, every library will have its own perspective on this topic, and we are prepared to listen, learn, and adapt as appropriate,” he said. They are prepared to do this? Ok, then, lets start really making who we are as libraries in relation to the publishers better known. This means not only to the publishers but to the public we serve, who also happen to be the publishers’ customers. It is inane to believe that library users are not book/e-book buyers. I will acknowledge that there are library users who only use library materials, but I will be willing to bet that that is not the majority of library users. Evenso, those people talk about what they read, watch and listen to to other potential publisher customers.

      Libraries need to help their patrons and the public beyond understand more about what we are all about and how that relates to publishers. Our e-book patrons need to know this especially. It is our responsibilty not only to unite in a force to make publishers understand our point of view and how valuable we are to them, but also to inform and inspire our patrons and their customers to see what is going on right now in the industry. All the “friction” or even moratoria the publishers feel are necessary to impose on library e-book circulation only serves to muddy their reputations with those patrons, who are also their customers.

  5. K.G. Schneider says:

    What Debbie said. I had a cart I couldn’t get to before the price hike because acquisitions has to be done through Internet Explorer on Windows (sigh) and I don’t have a Windows laptop–I was headed to a conference and library admin stuff took precedence. Woke up today and a cart with 9 ebooks had skyrocketed to almost $500. I deleted the Random House titles, and will explain to our users that some publishers won’t play with Overdrive and others charge fees that can only be described as usurious. It is becoming high time for action but it is hard to identify what that action should be.

  6. Alan Stewart says:

    Does anyone have a clue why most of the titles Random House has published since December are still only available as EPUB? If we’re paying these prices we should at least be able to have everything available for Kindle.

    • This is precisely the reason why I opted to get a generic Android tablet rather than a brand-specific one.

      I have both Kobo and Kindle on my tablet, and I buy my books from the vendor that gives me the best price.

    • Alan,

      Why no Random House books for the Kindle? Because Random House is afraid of Amazon. That’s the real reason RH is raising library prices and that other publishers either aren’t selling ebooks to libraries or are doing so on a restricted basis. They don’t want to give any reader, including the library patron, another reason to use a Kindle, because no one borrows a Kindle ebook from a library — or even from OverDrive. They borrow them directly from Amazon. Why would any publisher be happy with that arrangement?

  7. K.G. Schneider says:

    Alan, there’s no rational basis for this pricing or for the publisher restrictions. It all falls into “because we can.”

    • I really do think publishers have what they consider a rational basis for this: they’re trying to kill eBooks to preserve their current business model.

  8. K.G. Schneider says:

    Devin, this isn’t about “hating” libraries, but publishers would love to see us out of the way, we with our messy fair use and library uses and all that. That’s not a hunch, we’ve heard as much time and again.

    I can certainly vote with my (library) pocketbook, though it shouldn’t stop there: I should let my patrons know what I’m doing. But now let me comment as a writer. Are the Random House authors going to see a 300% increase in their royalty checks? They will not. I am sure this is being spun as “protecting” their income. What protects them is having lots of books sold, to individuals AND to libraries, by any means necessary.

    • Alan Stewart says:

      And fewer authors are going to see e-book royalties at all from the library market. Libraries will buy the new John Grisham, even at $87, because their customers will demand it. They will pass on the new offering from a midlist author with a smaller and less vocal audience.

      The publishers don’t seem to be able to do this simple math: Library budgets are finite. If you increase your prices 300%, we don’t increase our spending by that amount. We just buy a third as many books as we would have.

  9. I agree with Alan above. I checked the Random House backlist yesterday, and they have priced a 1196 historical novel, Two Crowns for America, by Katherine Kurtz at $102.00 (Can). We had this book in our print collection, one copy, since it’s release date in 1996. It has been borrowed on average twice per year since that time. It will eventually be weeded from our collection, I won’t buy it from Overdrive at that price, so it will simply disappear from our collection. Had it been priced lower, I might have selected it and a dusty title may have been made new again. Our customers will borrow pretty much anything in this format, so if I were a publisher, I would be thrilled to have my product rediscovered by a brand new audience. Now I will likely buy the blockbusters, because that’s what customers expect, but I will buy fewer copies, and fewer additional titles. Very shortsighted in my view.

    • Jane Lowrey says:

      I agree with Mary. Random seems to think their ebooks will be read forever. Unless they have Jane Austen or Mark Twain or the like in a back room somewhere this just isn’t going to happen. Libraries weed books all the time and this too will happen with ebooks. Then of course there is the matter of format. This too will change. As another writer commented, we have repurchased CDs from cassette tapes and DVDs from videotapes. There will be another format. It’s probably already in the works.

  10. Devil’s Advocate:
    Too bad for the Libraries. Reading this article, I see very little more than whining. The libraries buy a copy of the book and then lend it to users over and over. I see no reason why publishers won’t want to charge them more for the books.

    Angel’s Advocate:
    This is a sad development for libraries and library patrons. The solution is not to throw a tantrum. So many publishers are frustrated with publishers, but nobody has offered them a suitable trade-off between taking on the boring task of self-publishing and sleeping with the devil (the publishers).

    Consumers are clamouring for a bookseller that would free them from the shackles of DRM.

    Libraries, please don’t just whine. Perhaps you could team up and start a bookseller that unifies all the disjointed DRM-free vendors currently out there under one convenient roof, with apps for the popular platforms out there to boot? Could you start a publishing outfit that allows self-publishing authors to gain the benefits of self-publishing without the hassle?

    • If librarians want publishers to love them again, all they have to do is stop offering patrons ebooks for the Kindle. And maybe stop giving patrons free lessons in how to use the Kindle, because those are really just free lessons on how to be an Amazon customer.

  11. edit, “so many authors are frustrated with publishers” is the right phrase under the Angel’s Advocate paragraph.

  12. Annoying Librarian says:

    It’s price gouging, pure and simple.

  13. I agree with those who see this move as short-sighted. As co-author of Patron Profiles (http://bit.ly/pVRIOU), I can attest that the demand for e-books will only increase, and that active library patrons are a boon to publishers — using the library to discover new authors and genres, buying more books by authors discovered at the library, and so on. Penalizing/restricting libraries may shore up the bottom line in the short term, but it cripples an important tool for increasing brand awareness and loyalty in the long run.

    Libraries — physical and virtual — are publishers’ potential best friends. Surely there are better cost/usage models that recognize this.

  14. What fascinates me is how much higher the library price is than the retail price for ebooks. I checked iBooks and the prices for the books mentioned range from $8.99 for the Easter egg hunters to $19.99 for Eisenhower. Obviously libraries are paying for the ability to lend ebooks. Too bad ebooks can’t be donated to libraries when individuals are done with them the way traditional books can. Seems Random House has libraries between a rock and a hard place: first with pricing then by cutting off other means for libraries to get ebooks for circulation.

  15. Mamie Anthoine Ney says:

    Hmmm…you can’t get blood from a stone. At my former library the materials budget was cut by a third last year. You do the math…….

  16. sesameg says:

    The pricing might be reasonable for a consortial environment. I always felt that it was too inexpensive to pay $4.95 for a Nora Roberts backlist title for an eternal (I know, I know, it’s not really eternal as format changes make everthing obsolete within a few years), state-wide license. In that case, it might make sense to charge more.

    It’s not an easy question… The other side of the coin is the social good of libraries opening up access to those who can’t pay for every book they read. We (libraries and people who care about equity) really need to be looking at how legislation can continue to protect the rights that have allowed libraries and educational institutions to make books available to everyone. Negotiation is one approach, but legislation is more important.

  17. Y.C. Haug says:

    I agree with “publishers want to see libraries out of the way”, especially since Skoobe just launched in Germany – an e-book rental service – created by publishing / media conglomerates according to one website. They’d love to see people rent rather than borrow. Unfortunately, librarians and readers think in terms of promoting books and encouraging more readers. Publishers think in terms of quarterly bottom lines.

  18. Paul Tarranto says:

    Ah, I was wondering when publishers would get around to mimicking the self-destructive behavior of the recording industry. It’s gratifying to see that the salesman mentality that infests most of boardrooms of modern corporations is also evident at Random House. Keep it up and pretty soon they’ll be wondering why their obnoxious business model doesn’t work.

  19. Public Libraries need to ban together and revolt against this price gauge! Yes the customer/patron maybe the lone victim for a while. It would be hopeful that the lack of purchase orders will hurt the bottom line enough to bring Random House back down to earth.

  20. CIPA author @ErnestIstook @Heritage revealed how the American Library Association [ALA] misleads communities to defy CIPA or do an end run around it. CIPA is the Children’s Internet Protection Act. The result of making an end run around CIPA is children, patrons, and library employees remain exposed to causes of harm it would otherwise be legal to curtail. See:

    “CIPA Author Exposes ALA Deception; Ernest Istook Who Authored Children’s Internet Protection Act Calls Out American Library Association for Using Legal Tactics to Claim First Amendment Protection for Public Library Pornography Viewing, Causing Librarians to Be Indifferent and Leave Children Unprotected” http://safelibraries.blogspot.com/2012/02/cipa-author-exposes-ala-deception.html

    Yet here we are in the media discussing libraries protesting Random House price hikes.

    Who cares about the author of CIPA exposing that the ALA is misleading one third of American communities into leaving their communities exposed to the effects of unlimited pornography on public library computers, right? Obviously a Random House price hike is much more important, as is the ALA’s ability to drive stories it wants into the media and hide others it does not want. Clearly, eBook price hikes are of way more interest to communities than the children and employees being molested in public libraries as a result of ALA policy it pushes into communities, as described by the author of the law the ALA wants to ignore.

    And ALA wants people to pressure Random House over a little money? Shhhh, said the librarian leaders. Don’t say anything about the ALA enabling the sexualization of our communities that is so bad that the author of CIPA has to speak out.

    • Dan, we are discussing Random House price hikes because that is what this post is about.

  21. The tiered pricing model for library ebooks seems to make sense. It feels more fair than the book disappearing after 26 lends. I wonder if this perception is true.

  22. First it was Penguin pulling all their books from Overdrive. Now Random House is price gouging. Both of these publishers are only destroying themselves.

    The libraries will not be able to solve the problem. They are bound by financial and legal restraints. the publishers think that libraries just get in the way of their bottom line. The public will solve the problem. Just like the music industry learned. Some people will pay no matter what the price. Some people will steal no matter the price. Then their is the rest of us, who will not steal, but will borrow. To your average user, file sharing is not a crime. I am not an advocate of file sharing, but never the less, it is out there and here to stay. The silly thing is that the publishing industry, who had the music industry to learn from, failed to learn and is walking down the same path of destruction that the music industry was.

    Make the price equitable so that joe blow doesn’t feel ripped off, and he will buy your product. Be greedy, and be out of business. (Unless another Steve Jobs steps in to save them.)

    Let me borrow a book or two from an author, and if I like him, I will buy his books. The library is the perfect try it before you buy it store. The publishers should realize what an important service that libraries provide. They help teach people to read, furnish the tools to get them hooked, and then they will go out and buy books on their own.

  23. Despicable behavior on the part of Random House.

  24. Compared to the situation in Sweden, it sounds not that expensive. Here, the library must pay 20 SEK (about 3 USD) per e-book loan. And there seems to be a monopoly situation with only one e-book provider for libraries.

    http://scancomark.se/Regional/Libraries-in-Sweden-are-also-closing-down-as-every-five-libraries-are-closed.html

    http://www.elib.se/ebook_about_elib_eng.asp

  25. Jacqueline Seewald says:

    I am a retired librarian and now a fulltime writer. I see the answer as very simple: speak with your pocketbook. Don’t buy e-books that are ridiculously over-priced.

    Jacqueline Seewald
    DEATH LEGACY–coming in print from Five Star/Gale April 1, 2012

  26. Business Idea for you librarians.

    Create a gatekeeping service for independent titles. Find those titles which meet your standards, perhaps through a rigorous vetting process, and put them in your catalogs. If you find enough titles to satisfy your readers, you will be doing two things: #1 turning your readers on to non-traditionally published writers. #2 shifting revenues away from the traditional publishing houses.

    In essence, that would be your way to stick it to the man.

  27. Amos Lakos says:

    I am a retired librarian. I wish librarians would stop paying these ridiculous prices to greedy publishers. publishers always had all kinds of convoluted reasons reasons for why their books and especially their serials deals have to be expensive and also increase at rates way above inflation. I wish librarians would simply stop dealing with these entities. You will sonn realize that the world won’t crumble if these publishers are confronted with a big stop sign….

  28. Has anyone mentioned the elephant in the room? If publishers raise their prices like Random House has done and people cannot borrow ebooks from the library or buy them for a reasonably low price, they will do as they did for music – download the book illegally for free and share them with all their friends. It is, at this time, something that is very easy to do.

    A move like that will harm libraries and publishing houses, libraries because they will stop looking to them for ebooks they want and publishing houses because… well, look what it did to the music industry.

    • But library patrons can buy ebooks from Random House and others for reasonably low prices, certainly for prices that are a small fraction of what libraries pay annually to rent the same books from OverDrive.

    • It depends upon your idea of what is “reasonably low prices.” How many ebooks does one read a month if one is going to pay $10 a book from publishers? How many new authors at that price? Many people, I think, are willing to buy a few ebooks a month and then check out others to try at the library.

      The biggest danger for libraries comes from publishers. If patrons stop looking to libraries to supply ebooks because libraries can’t get ebooks from a publisher or can only afford a few very expensive ebooks that have long hold lines, then the patron will look elsewhere.The choice is to buy from the publisher or download illegally. With music, they did the latter.

  29. NV Fisherman says:

    Random House has huge number of overpaid flunkees at their New York offices and their overhead in incredible. They are obviously gouging the public libraries. The obvious solution is to boycott them and just buy the books in hardbound edition from Amazon. Maybe the Random House flunkees will come to their senses or get jobs in the service industry. There are plenty of waiter jobs available in New York City.

  30. The way I see it, the only way to stop this is to hit them in their pocketbook. Refuse to cave to their pricing “models”. Don’t forget to let your patrons know why, with examples, you don’t have their favorite books in the format they want. They may be refusing to play because they don’t like kindle, but if they want to eat, eventually they will play.

  31. Ted Schwitzner says:

    I am increasingly curious about Random House’s concern that they don’t have enough “circulation data.” Libraries aren’t mounting these books on their own servers, but instead rely on the platform vendors to answer questions about uses. Where is the evidence that Random House, et al, have gone to OverDrive to find this data?

    That said, perhaps there’s an opportunity here for libraries. Our claim has been that library borrowing increases readership, which leads to an increase in book purchases down the line. Random House isn’t specifically asking for the correlation between e-book use and e-book (or print) purchases, but it would be telling to see if that correlation could be made. If so, the price discussion could swing in libraries’ (and patrons’ ) favor with hard data attached.

  32. Some Guy says:

    Dear Publishers:

    Your books, e or otherwise, are not worth as much as you think they are.
    We are not eating your lunch, we are making it for you.
    You will go hungry, not us, if you cut us out.

  33. I believe in the concept of user pay whether if be food, water, transportation or READING.

    Thus I suggest that this whole imbroglio be put to rest by having a distribution model of books, ebooks that has the reader pay for the luxury of reading.
    For an purchase then a base price and unlimited time for reading. Very similar to the physical copy books we have. The only problem is that you could not lend it to your friends.

    For a library purchase then a usage rate would be set. The library would not have to purchase any book, they would just provide ALL books for lending. If a book is lent 100 times then publisher gets 100 units of credit. The library might get some portion of this. The credit card system is working and might be used as a technical basis. I know that there is some fraud going on with credit cards but in general it seems to be 99% ok.

    Example Individual Purchase – If I purchase an ebook I would be able to read it on any of my devices after I prove ownership by using my ebook credit card at the time of reading. No one else could read this ebook without using my ebook credit card.

    Example Library Lend – Borrower would borrow the ebook by providing ebook credit card. Borrower would be charged nominal amount which would go to publisher and library in some ratio. The ebook would remain available to borrower for a limited period of time (say 2 months) at which time it would not be readable by borrower unless borrowed again. I can see rates of $1 or less per book per session being possible.

    The implementation of this model would require all ereaders to have credit card interface and logic to handle purchased ebooks and ebooks on loan.

    Anyway, just some thoughts from a seasoned systems analyst.

    • tedA…you want to hope like hell you are always in a position to be able to pay for everything you need, use or want. Are you taking the mick or do you really believe reading is a luxury? Even systems analysts supposedly need to read, it is an essential tool of their trade and therefore hardly a luxury….although given some of the outcomes implemented after analysts have consulted one has to wonder about certainly their comprehension skills.

  34. Lincoln says:

    I wrote a lot more but I will distill it down to this. If publisher want to sell one book to one person they should do that. But they need to keep prices low because if they keep eBook prices high they will create a piracy problem.

    When the recording industry decide they wouldn’t sell digital music at an affordable price they CREATED a vacuum for piracy. Yet, we as consumers paid for that blunder with more and more laws that stripped away our privacy and with lawyers writing more Anti-piracy legislation that tries to strip away our rights. Piracy can be reduced when prices are kept fair, people unless they are taught to steal, will pay. The publishing industry is on the cliff and they need to be told that jumping the wrong way will have consequeses.

    If publisher want to sell one book to one person they should be told, “Okay, but you must sell your eBooks at an affordable price, and ANY PIRACY enforcement will be paid by publishers not by tax-payers.” Moreover, there will be no new Anti-piracy laws taht strip away pricvacy and consumer rights. There will be no usurpation of the legal system as the RIAA & Music And Film Industry Association of America™ (MAFIAA™) has attempted with ist lawsuits on grandmothers. If the ebook publishing industry creates piracy that is on their head. Not one tax dollar will be used to combat piracy “they created” with their own greed.

  35. We aren’t ordering Random House ebooks anymore.

    This is another knee-jerk reaction from an industry that refuses to give up its outdated, clunky approach to selling books, and still thinks of the Internet as something new and confusing. They are scared of Amazon, and keep running around doing foolish things because of it.

  36. >if they keep eBook prices high they will create a piracy problem.

    That has already happened. Ebook torrents are everywhere. Since the file size of an ebook is tiny (when compared to a movie), some torrents are made up of hundreds of ebooks. So, for example, one small download from a torrent tracker that only takes a couple of minutes to obtain can put 300 pirated ebooks on a person’s computer or e-reader.

    Amazon had the right idea when it tried to keep ebook prices to $9.99 or under. The publishing industry is going down the same doomed paths as the RIAA and MPAA.

  37. Gerrie Louden says:

    To raise prices in 24 hours to 3 times the previous price is ridiculous. To Librarians: don’t just say “this is hard’, refuse to waste library money like that!

    To Publishers: Remember Netflix? They thought they knew better than their customers and got greedy, too, and lost millions of customers. Your overhead could not possibly have increased enough to warrant an increase that big — it’s greed, plain and simple, and you are pricing yourself out of the market. If you are trying to preserve your soon-outdated business model, good luck with that. The changes in the music industry prove that performers and song writers don’t need the leech-like parasites of the record companies to be successful and get music to the masses. The same is true of the writing industry.

    I realize Random House is one of the larger, older publishers — but it reminds me way too much of how the old Swiss watch industry, which used to be the standard, got left in the dust because times changed and they didn’t.

    It’s insane to think you can expect to be successful while doing the same thing others have done and failed. I hope whoever dreamed up that hair-brained scheme wakes up or gets fired.

  38. Margaret Bartley says:

    I wonder what they mean with “..We are requesting data that libraries can share about their patrons’ borrowing patterns that over time will better enable us to establish mutually workable pricing levels that will best serve the overall e-book ecosystem…”

    It almost sounds like a backwards threat, like the library systems have been refusing to provide the kinds of data that RH wants, and RH is using this as a lever to pry that data loose.

    Since only one person at a time can read a book, even a best-seller will have had only maybe 10 readers before it’s in the older list. Why not just wait two months and buy them when they are cheaper? As a long-time library patron, I am well familiar with waiting for months for a best-seller. People who absolutely HAVE to read it the day it comes out will buy it anyway, since the library wait will be months.

  39. Alan Stewart says:

    An idea I saw some weeks back (can’t remember the source to give proper credit — sorry!) was for ALA to use the leverage provided the Youth Media Awards — generally understood to provide a significant long-term sales boost to honered titles — in our profession’s “negotiations” with publishers on the e-books issue.

    Perhaps an announcement that only books made available for purchase to libraries in *all* formats, on an equitable basis, will be considered eligible for the Newbery and Caldecott medals in 2013 would get the attention of RH, Penguin, and the others.

    Time to play hardball, I think.

  40. Alan Stewart says:

    “honored.” Sorry!

  41. Alan Stewart says:

    In some ways, I think this statement is potentially the most troubling thing in the whole story:

    “The library e-book and the lending privileges it allows enables many more readers to enjoy that copy than a typical consumer copy. Therefore, Random House believes it has greater value, and should be priced accordingly…”

    If you agree with that logic, substitute “book” for “e-book.”

    In other words, if Random House could figure out a way to charge us three times as much for a *printed* book, they would.

  42. 3 scenarios for “New Hot Title” from Random House

    1) We buy one copy at the inflated price of $120 and get a hold queue of 100 (like The Litigators).
    20 patrons quit the queue and buy from Amazon @ $15. RH gets $100 +$300=$400

    2) We buy 10 copies at the old pricing of $40 and get a hold queue of 100
    5 patrons quit the queue and buy @ $15. RH gets $400 + $75 = $475

    3) We buy 0 copies @ $120. No hold queue. Maybe some complaints.
    To get the $475, RH has to sell 38 copies.

  43. R.E. Kelly says:

    All this comes down to one word: greed. This is yet another attack upon the socialized experiment that is the “public library”. With declining public support for libraries from the right-wing, Random House (and all it’s imprints like so many tenticles) is NOT helping the situation.

    Consortiums across States should ban togther to provide Random House a clear message: NO! Collection development librarians (I count myself as one) should boycot all Random House E-books and purchase all Random House hard bound books in the Used Marketplace.

    Will this happen? Probably not as many of our self-appointed LJ leaders, movers and shakers announce: “We’re happy they are continuing to sell to libraries, very happy…”

    Weak as water and hair as blue.

    • SnowdogHERA says:

      Ditto. Though I agree with what “Shoot the messenger” says below (March 7, 2012 at 4:32 pm), I am unhappy with the conciliatory attitude our leaders are taking. We don’t have to throw tantrums, but we certainly need to make the publishers aware how angry we are at what they are trying to do and at the politician like rhetoric they spew at us. Yes, let’s try to solve this problem, but let’s do it with the full force of our own power behind it.

    • Shoot the Messenger says:

      Can I get an amen for sister Snowdog?

      Now if we only had some sort of an organized association where libraries could unite, maybe send an official delegation to speak to the big publishers, tell them just how angry we are…

  44. Holly Hill says:

    Since Random is owned by Bertelsmann, I have to wonder what the other publishers in that group are going to do. see http://www.whoownswho.org/bertelsmann.htm for the complete list.

    Hm, maybe protest letters directly to Bertelsmann might be effective?

  45. Shoot the Messenger says:

    Really, this is just the realization of a long-standing dream for publishers.

    Rental establishments for video content, from your local mom-and-pop VHS store in 1983 to Blockbuster and Hollywood Video a decade ago to Redbox and Netflix today, have always paid a licensing premium for the right to rent a film out repeatedly. I don’t know current details, but ran across some video catalogs in the early ’90s that showed new title pricing for video stores at 3 to 4 times the MSRP. Yep, mom and pop were paying $75 to $100 for Romancing the Stone, while you could buy it for $25 or less.

    Why? It’s a different type of license than a consumer gets. In fact, it’s a license for distributing the work in a way very similar to how libraries lend. Why didn’t publishers do this with print books decades ago? Too hard to enforce. Too easy to work around.

    But now the technology is on the side of the publishers. You’re finally paying for a library lending license, not a consumer license. As I said, it’s a long-standing dream for Random House.

    Is it a good idea? If the comments on this blog — and dozens of others — are any indication, Random failed in the messaging. And they jacked up prices too far, too fast.

    But they did throw that footnote in at the end, indicating a need for more data and a willingness to keep talking.

    So instead of just complaining, let’s engage. Let’s talk about what kind of a model could work.

    For example:

    Remember those huge tables of surplus previously-viewed DVDs at your local Hollywood store? That was because they had to frontload their purchases to meet release-day and first-weekend demand. Then rental rates dropped, and they no longer needed 50 copies of Harry Potter and the Sorceror’s Stone. So they sold them to you and me. But we didn’t get the rental license, just the normal consumer deal. I don’t know if Hollywood paid the same license cost for all 50 discs, or if some were less expensive, being licensed for a shorter period. (Love to get feedback from somebody who knows.)

    In the library, what about an e-book pricing model that lets you lend 25 copies for the first few months, retiring licenses as demand wanes, until you only have one or two copies for circulation at the end of the first year? Would you pay triple the cover price for that?

    Maybe that’s not the perfect model. Let’s hear your ideas, too. But let’s think outside the current framework and then talk to Random House, instead of throwing a toddler-tantrum. Let’s negotiate our way to something that makes sense for everybody.

    • R.E. Kelly says:

      “Why didn’t publishers do this with print books decades ago? Too hard to enforce. Too easy to work around”

      Distributers like B&T offer libraries 40+% off hardbound books. Too easy to work around? No. Just a more level playing field…

      “Fair use” comes to mind…

      & remember, libraries don’t even “own” these e-books: they are paying 3X more for leasing rights only. At least with print versions, the library owns it until it becomes shop worn and then sell it for a buck or two.

      Oh, pity the publishers…it’s very hard to turn a dime with little to no overhead.

    • Shoot the Messenger says:

      So, if I’m an author, editor, producer, etc., my intellectual property — my labor — is only worth something if it results in a physical product that has to be overproduced, trucked around, the surplus trucked back to a warehouse, and the unsold copies remaindered or pulped?

      Ebooks are a different distribution model. But I’ll bet Random’s and Overdrive’s financial statements would show some hefty overhead in creating the still-evolving infrastructure to manage the distribution process.

      And for now, though ebook sales are growing, they’re still only 14% or so of total book sales. So publishers should undercut their aging and ailing business model by kneecapping their ability to make money in their up-and-coming business model?

      First thing we do, let’s kill all the publishers, eh? A world of self-published, unedited drivel is exactly what we need to encourage literacy.

      I know that some librarians see publishers as the enemy, and some publisher actions seem to indicate a reciprocal feeling, but come on, both parties add value, financially and culturally.

    • Brandon Rinebold says:

      Actually, the video rental stores get a DISCOUNT under retail pricing, not a premium over it. At one point Redbox got tired of movie publishers refusing to sell them DVDs for up to 30 days after retail release and bought them directly from retail wholesalers but found that the extra rentals didn’t make up for the markup from the distributors so now they’re back to the delayed availability.

      What we really need is libraries nationwide to get together to negotiate prices for ebooks directly from publishers. Librarians get together and order ebooks by the hundreds of copies and then you’ll have a lot more weight to throw around at the negotiating table. Form a charitable corporation for the purpose of negotiating prices and holding the purchased ebooks. Bill the member libraries a few cents each for the first X rentals of an ebook until its purchase price is ‘paid off’ and less for each rental afterward to cover hosting and salaries. If the newly formed charity ends up turning a significant profit, drop the price of rentals or redistribute the excess retroactively at the end of the year. Some community action charities in kentucky did the same thing with everyone from insuirance companies to construction material suppliers and the savings in contract prices far exceeded the 10 people on staff. You could even do the same with physical books, negotiating with wholesalers on the prices for member libraries.

  46. Shoot the Messenger says:

    Let’s not forget what the digital revolution did to the music industry. Sure, it changed the whole distribution model, but is the price of an album really much different than it was with CDs?

    No. I simply have the option to buy a single hit song, instead of the whole $15 collection of near misses. Prices are relatively stable, but the quality threshold of what I’m willing to pay for has gone up.

    The other thing that MP3 did to music was make a grand mess of things for half a decade. That’s where we are with ebooks. Middle of the grand mess.

    So let’s be part of the solution. Let’s productively help to sort out the mess. Let’s offer some win-win scenarios. Or we can just let publishers create their version of a solution.

  47. R.E. Kelly says:

    No…I realize we need publishers…just more of them: “too large to fail” cuts across industries. By the very act of increasing prices 300%, Random House seems to be indicating that a) e-books account for more than 14% of their sales and 2) they are losing money on current e-book sales. I don’t think that either is the case…I think this is simply a way to maximize profits off the backs of libraries. E-books should be MORE profitable for publishers since there is no shipping, no warehousing and no returns: remember this is a “lease” model, not “purchase”.

    And I never suggested that the author’s labor is only worth something if it turns into a phyiscal product. Indeed, becuase there is no waste, no “pulp”, there should be a higher percentage of profits that wind up in the author’s pocket. Like it or not, the average life shelf of a typical new “bestseller” (fiction) is only 6 months to a year…after that, most are pulp. So libraries will be paying $100+ per title to lend pulp?

    Does NOT make sense.

    • Shoot the Messenger says:

      You’re right. Spending $100 for a title with a one-year shelf life is crazy. “Perpetual” doesn’t have the value for a librarian that Random House seems to think it has.

      And that’s exactly the kind of thing that we need to be telling publishers, not just whining about the change, like so many seem inclined to do.

  48. R.E. Kelly says:

    (sp) *because*

  49. R.E. Kelly says:

    “what about an e-book pricing model that lets you lend 25 copies for the first few months, retiring licenses as demand wanes, until you only have one or two copies for circulation at the end of the first year? Would you pay triple the cover price for that?”

    However, your suggestion above begins to move in the right direction…

    • Shoot the Messenger says:

      As I said, not a perfect solution out of the gate. The scenario is pulled from an outsider’s observation of a different business relationship (video stores with movie studios) and the numbers are completelty off the cuff. But let’s start moving in a direction that engages rather than vilifies the other player.

    • Shoot the Messenger says:

      Completelty? I sound like George Dubya. Let’s try to negotia-tate that spellulation again: “…completely off the cuff…”

  50. elle mcmahon says:

    This article, and its information, seem particularly apropos to the discuss we are having. “Apple, Book Publishers Facing Justice Department Anti-Trust Suit: Did Apple and the publishers conspire to drive up e-book prices?”

    http://www.consumeraffairs.com/news04/2012/03/apple-book-publishers-facing-justice-department-anti-trust-suit.html

  51. Diane Bronson says:

    To say the new pricing brings RH digital books “in line with Books on Tape audio” pricing ignores the fact that many libraries (including my own) did NOT buy BOT titles if there was a trade alternative because of the ridiculous pricing differential, and that BOT has gone to trade-level pricing for its physical editions. Only the digital editions remain at stratospheric prices.

    I don’t understand why publishers are hanging on to a model for selling a radically different format that replicates that of the older format – print. Why not sell to libraries based on use? Give libraries the right to offer ALL their books and have them pay a reasonable charge — yet to be determined of course — as they are actually downloaded. Publishers & authors (remember them?) get wider (i.e. library) exposure and payment for their books, library users get access to ebooks, and everyone goes home happy. Why isn’t anyone making this picture a reality?

    Oh, right, someone is. Freading. Take a look at the future of ebooks in libraries. At least, if the publishers have the sense God gave an egg.

  52. elle mcmahon says:

    Surely, everyones’s seem this great news that broke in the past couple of days!

    http://www.huffingtonpost.com/2012/04/11/apple-antitrust-lawsuit_n_1418764.html?
    utm_campaign=041112&utm_medium=email&utm_source=Alert-technology&utm_content=Photo

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