Ebooks seem like ‘Netflix for libraries,’ but they’re a drain on budgets

The book-crammed Free Library of Philadelphia has found a way to stay relevant in the 21st century: ebooks. Last year, 28 percent of the Free Library’s total circulation of more than five million books came from ebooks and other digital content.

But it hasn’t been nirvana for the library and its taxpayer-funded peers.

As popularity soars, publishers and content providers have adopted “metered access” and per-checkout models for ebooks and other content. Those models are guzzling library cash and resulting in book-lending inefficiencies, library officials warn. A so-called perpetual ebook license for libraries could be four or five times the cost of either the printed book or the digital copies sold to consumers.

And these are only some of the latest clashes over digital licensing as publishers seek to squeeze more profits out of their content as the world moves away from ink and paper.

“Digital content is a huge challenge for libraries," said Michael Blackwell, the director of the St. Mary’s County Library in Maryland and project director for ReadersFirst. It’s a loose federation of “nearly 300 libraries" (including the Free Library) dedicated to ensuring readers have access to "free and easy-to-use ebook content.”

“We are trying to be reasonable, but we think the large publishers are not pricing ebooks fairly,” Blackwell said. “I don’t think [publishers] want to look bad to the public, but they also don’t want to explain a lot to us."

With metered access, publishers tie the digital license for an ebook to a time period such as a year or two, or a specific number of checkouts. Once either of those numbers is met, the library must purchase the ebook title again or it vanishes from the digital stacks like a Harry Potter magic trick.

Publishers also sell ebooks on licensing deals that aren’t metered but priced significantly higher than print editions. This is called a perpetual license. Librarians refer to them as “pretend it’s print.”

Verses for the Dead by Douglas Preston and Lincoln Child, a current top New York Times bestseller, was selling on Wednesday on Amazon for $16.80 for the hardcover book. But the Free Library said the book’s perpetual license was $84. Amazon listed the hardback for Circe, also a New York Times bestseller, at $16.20; its perpetual ebook license was $81.

Two big publishers, Penguin Random House and Simon & Schuster, did not respond to emails on the topic. A spokesperson for the Association of American Publishers declined to comment. The association’s most recent data show that ebook revenues declined 2.8 percent through the first 11 months of 2018. Over the same period last year, hardback sales rose 6.5 percent to $2.9 billion. Paperback and mass-market sales rose 2 percent to $2.5 billion.

Librarians say they understand that publishers would like to maximize the revenue from hot titles. But library patrons also would like to read books, magazines, and other content on digital formats. Librarians believe that book lending can boost author exposure, thus helping publishers in the long run.

“Some publishers believe that engaging with libraries lose money for them,” Alan Inouye, senior director of public policy and government relations at the American Library Association, said Wednesday. But “libraries do a lot of marketing for authors,” he added.

And with libraries concerned that relations with publishers are heading in the wrong direction, publishers, library organizations, and other stakeholders launched the Panorama Project last May to gather data from library services such as Overdrive to determine whether libraries hurt or help publishers.

At the Free Library in 2018, the five most popular ebooks were The Woman in the Window (1,482 ebooks circulated), Fire and Fury: Inside the Trump White House (1,448), The Midnight Line: Jack Reacher Series (1,415), The Handmaid’s Tale (1,406), and Come Sundown (1,311).

Jennifer Maguire-Wright, the chief of the materials management division at the Free Library, tracks checkouts and holds to help her determine the number of copies of a book to purchase. She said that the metered access ebook copies of The Woman in the Window cost $26.99 with 26 checkouts, or $1.04 per checkout.

After 26 checkouts, the ebook license expires and the library had to purchase another one.

A printed copy of The Woman in the Window, meanwhile, cost $16.40 on Amazon on Wednesday. The Free Library negotiates a slight discount to the market price but declined to disclose the discount. An average circulation for a printed book is about 100 checkouts, though that can vary with time and usage. At the maximum number of about 100 checkouts, the book circulates for about 16 cents per checkout.

Maguire-Wright and other library officials acknowledge that publishers had consumer data for pricing that libraries did not. But they also believe that the availability of ebooks for library patrons improved over the years.

“We still need to budget for things that don’t circulate and we just have here for reference material,” Maguire-Wright said, noting that she did not see a day when ebook and digital costs would be a higher percentage of the Free Library’s budget than its share of total circulation (28 percent). The Free Library system, which has 54 branches across the region and more than 640,000 cardholders, had a 2017 materials budget of $4.5 million.

Laverne Mann, director of the Cherry Hill Public Library, said there are many benefits to ebooks and digital content.

Any ebook can be transformed into a large-print book on a screen, a big plus for older readers. Content can be downloaded 24/7. And community reading lists can be made easily available to everyone without visiting the library. Thousands of additional titles — magazines, books, and even foreign-language books — are available through digital platforms, she said.

Recently the library reached a deal to make 20,000 digital copies of the New York Times available to Cherry Hill Public Library patrons for 72 hours through a special access code, marking another example of a publisher experimenting with a new economic model. After 72 hours, readers would need a new code.

In 2018, the Cherry Hill Public Library spent $46,000 on digital content out of a total materials budget of $175,000, Mann said. Digital usage rose 5.7 percent in 2018 over 2017 and accounted for about 14 percent of all circulation last year, she added. She expects total digital usage to climb about 2 percentage points a year.

Cherry Hill also makes the Hoopla Digital service available for ebooks, audio books, TV shows, movies, comics, and music at a per-checkout charge that can range from 70 cents to about $4. Tierney Miller, the reference and adult services supervisor at the Cherry Hill Public Library, described Hoopla as “Netflix for libraries” because there are unlimited copies simultaneously available to borrowers.

So that it doesn’t bust the library’s budget, Cherry Hill restricts members to five checkouts a month, with a maximum charge of $3.99.

“It’s a cash guzzler, but we love it,” Miller said. Hoopla is so popular, in fact, that the library caps its daily usage at $100. After hitting the cap, the service shuts off for the day.