Amazon Fades from the ebook Legislation Narrative

Before I let the topic of these state ebook lending bills go for a bit, there is one aspect of this story that should not be overlooked. I was thinking about it when I saw a tweet criticizing Governor Hochul’s December 30th veto of the New York version of the bill. Media professional and professor Dan Gillmor, who has over 46,000 followers, summed up the sentiments of many when he wrote…

Mr. Gillmor’s hyperbole is an example of that blinkered view which finds it sensible to vilify publishers while ignoring authors, as if the interests of two were not intertwined. But the comment also reminded me that the force still driving this willful blindness is a belief that internet platforms can and should obviate the need for intermediaries like publishers. What’s especially funny about that idea in context to this story is that it was the monopolistic conduct of one internet platform—Amazon—which served as a major predicate for advocating the ebook bills in the first place. For instance, in Maryland, which passed its bill into law and now faces litigation by the publishers, all the supporting letters in the record contain the following:

For example, Amazon and Audible currently have between them over 20,000 “exclusive” titles. They will license these titles – which include high demand content by J.K. Rowling, Margaret Atwood, Alice Walker, Dean Kootz, Neil Gaiman, and others – to consumers, but not to libraries.

The headline of a Washington Post article from March 2021 (when the eBook bills were still percolating in state legislatures) identified Amazon as the publisher refusing to license titles to libraries. And as the AAP complaint against the State of Maryland notes, “The Maryland act’s legislative history and public statements by state legislators and public officials reveal some very specific concerns about this company.” The complaint adds that legislative sponsors specifically and repeatedly cited Amazon, but then avers, “… there is no contention that publishers more broadly are failing libraries. Nor is there any question that the marketplace for library ebooks and audiobooks is flourishing.”

After passage of the Maryland law, Amazon Publishing signed a deal with Digital Public Libraries of America (DPLA) to make their ebooks available to U.S. libraries, and it is reportedly negotiating terms to make its Audible audiobooks available as well. That’s a good thing, but we should not lose sight of the distinction between Amazon and the major publishers, who were not withholding their ebooks from libraries. Because whatever drove Amazon’s decision at the time (strategy for global domination?), it must be viewed as an outlier unique to that leviathan of a company and not aligned with the rest of the industry whose core business is still book publishing.

The library associations highlighted the conduct of one tech industry publisher as a reason to promote legislation that would divest individual authors of their copyright rights. Thus, despite the claims that these bills are not anti-author, a major prong of the argument for them boiled down to this:  Amazon behaved like a monopoly, so authors should pay the price. And this aspect of the story is transformed from the absurd to the grotesque when we remember that Amazon was among the platforms once touted by copyright critics as an antidote to the “gatekeeping” engaged in by publishers.

As the ebook bills gained momentum in four states—NY, MD, MA, RI—the Amazon predicate faded into the background to the extent that now, according to observers like Gillmour, the story is all about the publishing “cartel” quashing “reasonable” legislation solely directed at the price of ebook licenses for libraries. A couple of problems with this narrative, though.

The first is that, even if the libraries have a sound complaint about the cost of ebook licenses, that’s a subject for negotiation and not grounds for a futile attempt to legislate away the rights of authors. Second, if the libraries want to make a case for calling the current terms of ebook licensing unreasonable, they need to at least do some math. It is not enough to just compare the ebook purchase price to the library ebook license price and declare the difference extortionate on its face.

Because whatever the ideal cost of ebook licenses should be for libraries, the current rate of approximately three times the consumer price for ebook purchases is not as unreasonable as the library associations make it seem. The simple fact is that lending an ebook to multiple readers is a different market from selling an ebook to one reader. Let’s do a quick, back-of-the-envelope review for context.

A two-year license fee of $65 provides free access to an ebook to roughly 52 readers at a cost to the library system of $1.25 per reader. But based on the rhetoric employed by the library associations, they seem to want the same 52 readers to be provided access at a cost of about $ 0.29 per reader, but even then, not really. Because digital materials never wear out, what the libraries actually want (i.e. unlimited licenses at consumer purchase rates) is for the authors and publishers to make titles available until that per reader cost approaches zero. Clearly, there is a threshold when too low a fee would cannibalize the market for ebook sales, which would end the market for ebooks, period.

For further context, keep in mind that one reason the libraries claim a right to buy, rather than license, ebooks is that they are used to buying hardbound copies and loaning them to their communities. But here, the library associations are comparing apples and oranges and not taking an honest account of cost to the library system for providing its services. Because a physical book requires infrastructure and labor to maintain, a $30 clothbound copy, for instance, may cost the library around $1.44 per reader to serve the same 52 patrons.[1] The broader point is that the two-column argument the ALA et al presented to state legislators is not a full picture.

Finally, I would add that libraries will not stay relevant in a world where they put too many eggs in the digital lending basket. At the point at which one’s “library” experience is little more than tapping a button to access a book through an electron reader, the relationship with the individual library evaporates rather quickly. If the library associations were to take a serious read of the landscape, they might consider whether Amazon’s original refusal to license its titles has something to do with that company’s strategy to replace publishers, libraries, and any other distribution channel it doesn’t control. Because that’s the real battle of the digital age, and to that end, the libraries and publishers should be allies.

[1] Based on a staffer making $10/hr and spending three minutes managing a book for a single patron. The actual per read cost is likely higher.

Enjoy this blog? Please spread the word :)