Today’s post is adapted from an article I first published in my paid newsletter, The Hot Sheet.
Of the many changes wrought by the pandemic in the publishing industry, one of the most dramatic has been in library circulation. overdrive, the largest US distributor of digital materials for libraries and schools, saw a 33% increase in loans in 2020; As libraries closed and stopped ordering print materials, many shifted their budgets to digital collections. but buying and lending digital materials poses challenges for most library budgets.
You are reading: Do authors get paid for library books
Prices and restrictions on e-books and audiobooks have increased over time, making it more expensive for libraries to circulate digital materials. The New Yorker recently covered what the costs are like For an institution like the New York Public Library: For Barack Obama’s Promised Land (Penguin Random House), the library system purchased 639 one- and two-year e-book licenses, paying a total of $22,512. each copy of the ebook can be loaned to one person at a time. (The consumer e-book sells for about $18 per copy.) As of August 2021, the library has spent less than $10,000 on 226 copies of the hardcover edition, which retails for $45 but sells for about half that on Amazon.
As seen in the example above, titles from the Big Five publishers generally must be renewed after a specified number of loans or a set time period of one or two years. Assuming library budgets and collections become largely digital, there will no longer be a permanent collection, but rather an ever-changing collection. Librarians have expressed frustration and, in particular, Maryland passed legislation requiring publishers to license e-books on “reasonable terms.” The American Publishers Association has condemned this and the law is likely not enforced given federal copyright laws. still, congress is lobbying and asking questions of publishers.
so how are the authors doing in all this?
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Authors with traditional publications are paid when their books are sold to libraries, regardless of format, generally at the same royalty rate as a retail sale. however, authors may not be aware of library unit sales as they are often mixed with retail sales in royalty statements. To complicate matters, what the consumer pays and what the library pays for an e-book may not be the same. digital licenses can cost up to six times the retail price and expire.
For the examples below, we have used a mid-range list price to calculate the payout. Publisher’s Network and Author’s Network align with industry standards for the Big Five, but these are approximate: contracts and agreements obviously vary. Note that large publishers often sell e-books on an agency model rather than a wholesale model, which gives them control over pricing.
in 2019, steve potash, CEO of overdrive, revealed that for at least one of the big five publishers, macmillan, 79% of library e-books expired because of a time limit, not because the limit of 52 payments was reached. in fact, overdrive data suggests the average macmillan title is reviewed just eight and a half times during a two-year license.
so the author receives fair compensation for the digital library loan?
at digipalooza, sari feldman (retired librarian and former president of the american library association) moderated a panel with mary rasenberger, executive director of the authors guild, and skip dye, senior vice president of library sales and digital strategy at penguin home random, to discuss, in part, compensation for library sales. While the Authors Guild does not take a position on the best business model for loans, they seek compensation that is sufficient to cover any potential lost eBook or audiobook sales. Rasenberger said she recognizes that not every loan from a library represents a lost sale. Still, one of the Authors Guild’s goals is to make sure e-book and audiobook lending doesn’t replace too many sales, with an emphasis on too much. she said, “it’s a balance between making sure readers have the access they need and the end result.”
Rasenberger says that libraries help alleviate the industry’s problems with piracy, because readers who knowingly read pirated books, to avoid paying for them, sometimes borrow from libraries. (A 2020 research study found that book pirates also buy books and use libraries.) however, some publishers fear that consumers will get used to using their library as they would an unlimited subscription service instead of visiting a retailer to shop. In 2010, before most of the Big Five publishers even sold or licensed e-books to libraries, Macmillan CEO John Sargent called library e-books “a thorny problem” for libraries. editorials. “It’s like Netflix, but you don’t pay for it,” Sargent said. “how is that a good model for us?”
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rasenberger wasn’t against libraries, but said, “it’s important to have some hurdles other than the need to return that ebook, so it’s not too easy for readers who can afford to buy ebooks.” Rasenberger believes that the current license model, which produces timeouts, works. but if the library market is flooded with e-books without waiting times, the balance could be upset. In other words, Rasenberger is concerned about the potential impact of e-book sales on authors’ income if libraries were able to buy e-books at consumer prices, keep them permanently, and loan them an unlimited number of times. (This was the model years ago, but not anymore.)
Libraries collectively spend about $1.5 billion each year on their collections.
That’s about 9 percent of traditional (consumer) publishing revenue. When we contacted Robin Bradford, a longtime librarian currently working in a rural library system in Washington State, she said, “Libraries spend a lot of money on products, and money on staff time, trying to give money to the editors.” she says that she tries to buy as many copies as she thinks her system will support. “Instead of buying the least, I try to buy the most.” she’ll buy print copies, the digital audiobook, the ebook, and even a large print copy of the same title, if available.
In addition, librarians hand-sell books on a massive scale every day, in person and online. A stat often shared by library advocates: Libraries outnumber mcdonald’s locations in the united states. this translates into a marketing staff for publishers. “Book stores are loved for doing this, and libraries are loved for doing this,” Bradford told us. She said that if readers don’t like the books they buy, they may or may not try that author or genre again, but library lending remains low risk. “You can see things that sound interesting, things that look intriguing, things that someone told you about…all sorts of things you wouldn’t pay money for without seeing.” Similarly, librarian Jessamyn West told us, “I work in a library in a small country market, and it’s amazing to see basically all the new books fly off the shelves, no matter what they are.” many studies, such as the immersive media and books 2020 report and booknet canada, have shown that library patrons are also shoppers and will buy some formats and borrow others.
one final note
One of the most interesting things about the panel with rasenberger and dye was the simultaneous chat between the librarians. one attitude, expressed by more than one participant, was that if authors don’t earn enough from library loans, they may need better contracts with their publishers. Sadly, there was no interaction between Rasenberger and Dye on this issue, although in the past the Authors Guild has campaigned for higher royalties on eBooks to ensure payouts are fair compared to earnings from other formats.
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