What Problem Do Those eBook Bills Address Anyway?

Red Hook Public Library, Red Hook, NY

In late December, New York Governor Kathy Hochul vetoed the state’s library ebook bill, acknowledging that the law would be preempted by the Copyright Act. In mid-February, a district court in the State of Maryland, responding to a lawsuit filed by the Association of American Publishers (AAP), ordered a preliminary injunction suspending that state’s ebook law, also on preemption grounds. Recognizing which way the wind was blowing, Kyle Courtney of Library Futures Foundation drafted a letter on February 1 to the House Committee on Corporations of the Rhode Island State legislature proposing amendment to that state’s bill, writing:

…we are advising, based on the current landscape involving litigation and vetoes of similar eBooks laws in other states, that you consider friendly amendments below that will effectuate enough changes in H7113 to help avoid running afoul of the challenges documented below with respect to activities in other states.

What follows is a recommendation that Rhode Island remove one paragraph demanding that publishers license to libraries et al, which the footnote describes as the language in direct conflict with federal law. However, the remaining provisions of the bill still invite a preemption challenge because they presume to dictate terms and pricing models to publishers in conflict with the principle that copyright protects the author/owner’s right to decide the manner in which a work is made available. Hence, the provisions that would remain in the RI bill, as well as nearly identical bills in five other states, may still be construed as unconstitutional state compulsory licenses.

As Courtney’s letter emphasizes, the strategic approach taken by the various lobbying organizations pushing for these bills is to present the subject in the context of state contracts while seeking to remedy a consumer protection problem—namely, the alleged “unconscionability in licensing” practices by the publishers. But so far, the organizations lobbying for these bills have yet to support the accusation that current ebook licensing regimes are extortionate and/or that they are causing a disruption in a library system’s ordinary capacity to serve its community. To say nothing of presenting a compelling case in every state in which these bills have been introduced.

It is no surprise the American Library Association (ALA) et al have not presented a thorough argument, because it would be a hell of lot of work. To assess whether a given market is underserved (in any context) requires a considerable amount of research and evidence, including counterfactuals, polling, budget analysis, etc. In this instance, it would be a rather large data-science project to manage and model all the relevant inputs, like overall reading trends, library-use trends, preferences for digital vs. physical materials, and cultural and economic data, to determine whether, and where, the ebook borrowing market is underserved and conclude that the licensing models are the cause.

Instead of doing any of that homework, what associations like LFF and the ALA have done instead is to compare the consumer price of an ebook purchase (e.g. $18) to a library price of an ebook license (e.g. $55 for 2 years), then cry foul and draft legislation to resolve this apparent injustice. But if state lawmakers are going to accuse the publishers of unfair practices to justify a law that flies in the face of the Copyright Act, it should demand more evidence than these two numbers alone. Or if state lawmakers are going to elide all complexity in favor of blunt metrics, then why not simply say that three times the price to make an ebook available to fifty times the readers hardly sounds like extortion by any reasonable definition?

The Mid-Hudson Library System

Although I certainly do not have the resources or data-science chops to do the kind of research mentioned above, I did a little digging into the Mid-Hudson Library System (MHLS), which serves my home region, just to see what I could learn.

One of 23 systems in New York State, MHLS comprises 76 small-town and public-school libraries in five counties with a total population of more than 686,000 (~ 258,000 households) earning a median income of about $76,000/year. The 2021 budget for the library system was just under $4 million, a little more than half of which comes from statewide and local taxpayers. In 2021, MHLS spent about $90,000 (2.25% of its budget) on digital lending materials, through a few different marketplaces, and presumably using more than one licensing model.

For example, OverDrive, one of the major marketplace platforms where librarians license digital materials, makes ebooks available under three different licensing models. Through Simultaneous Access, certain publishers offer package deals for multiple titles up to a certain number of loans. In the One Customer One Use model, presumably for back catalog or less popular books, the licenses never expire. And the model most often used by the major publishers for the most popular books is Metered Lending, which offers one or two-year licenses and/or limits the number of loans per license.

In 2021, MHLS ebook circulation was ~ 314,000, and the first three months of 2022 are tracking toward a similar total. Even at the unrealistic frequency of one book per unique patron, that would be less than 1/3 of the total population in the system, which likely says more about demand than it does about supply. In fact, at the national level, although ebooks and audiobooks continue to occupy a greater percentage of a library’s collection, print book borrowing is still 518.92% higher than ebook borrowing as of 2019.

Looking at the catalog, it seems that MHLS offers about 10,000 ebooks (70% fiction/30% nonfiction), presumably under more than one licensing model. But even if all 10,000 were licensed under Metered Lending at a rate of $55 for two years, this amounts to a cost of about $1.07/year per household in the system. Alternatively, we can estimate that a two-year license of $55, at a maximum rate of one loan every two weeks ($55 / 52readers), is a Cost Per Loan (CPL) of about $1.06.

So, the numbers available do not seem to justify even a hypothesis that ebook licensing is unduly burdensome or is resulting in underserving the MHLS community. And the overall demand nationwide for borrowed ebooks hardly justifies the rhetoric of the lobbyists, who would have us believe that a literature-starved public is suffering on the libraries’ virtual steps at the mercy of the big publishers. When an expenditure is just over two percent of the operating budget, one must step back and look more holistically at the question presented.

Collections Are a Fraction of a Library’s Expense

The data collected in the Institute of Museum and Public Services (IMLS) Public Library Survey reveals that libraries’ costs are increasing for personnel and general operating expenses while costs are trending downward for collection materials—especially the cost of ebooks and audiobooks. Noting that most libraries spend an average 10% of their annual budgets on their collections overall, an article in Wordsrated summarizing the IMLS Survey states, “The drop in price per item is due to library collections becoming increasingly digital. This is because the price per digital item has declined significantly. All while the average cost per book increased 10% since 2003.”

The statistical trends in the IMLS Survey suggest that libraries are going through a lot of transition these days—as collections become more digital, as physical spaces are adapted to provide more programs and services, and as overall reading and borrowing habits continue to shift in the market. Change in any system presents both opportunities and challenges, and it is a safe bet that not every local library will, or can, adapt in the same way. But if the data shows that ebooks are, as of 2019, “the cheapest material in a library’s collection,” then why on Earth is this the moment to lobby for these ebook bills in the states?

The answer to that cannot be, “Well, if the prices were even lower, we could do more.” Yeah. That’s how everything in life works. But for one thing, as much as publishers and authors care quite a bit about library patrons, it is not incumbent upon them to outright subsidize the libraries as they navigate the changing landscape—let alone by mandating that the publishers remain bound by old models so that libraries can adapt to new ones. That’s not a symbiotic relationship.

Looking forward, neither the libraries nor the publishers can say what the trends will be in five or ten years, but the libraries should be cautious about putting too many eggs in the ebooks basket. What happens to the relevance of the seventy or so local libraries in MHLS if the system plays an outsized role as a conduit for ebook lending? Don’t at least some taxpayers or prospective donors in each town begin to wonder why they need to keep paying the librarians and maintaining the buildings? Perhaps the local librarians should look at the data and ask whether ALA, LFF et al are doing them any favors.

Of course, knowing the track records of the people behind these ebook bills, it is fair to doubt that they are trying to solve a problem at all but are instead pursuing a broad, anti-copyright agenda. The tone of Courtney’s letter, for instance, makes clear that he (and his colleagues) object to the legal doctrines on which the NY and MD bills were opposed and that his recommendations to RI are a begrudging pivot in strategy to achieve the same ends by a slightly amended rationale.

But to oblige any copyright owner to make a work available under terms mandated by state law invites substantial conflict with federal law and the authority of Congress alone to amend that law. Consequently, no state legislature should embark on such an adventure without a compelling and thorough analysis of the problem allegedly being solved. And so far, the lobbyists for these ebook bills have presented little more than a melodrama barely worth reading at any price.

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