For almost the entire history of the library ecosystem, publishing companies and libraries have been as tightly aligned in their missions as any other pair of mutually beneficial partnerships. It is hard to imagine a more symbiotic relationship than that between publishers and libraries. The two entities appear more interdependent than baseball bat manufacturers and professional baseball teams; coffee bean growers and Starbucks; music recording studios and radio; or mini-series producers and Netflix.

The relationship between publishers and libraries had been wrinkle-free for more than a hundred years, based on a simple model: Librarians purchase new and evergreen books from the publishers, catalog the books in their system, arrange them on shelves, and loan them out to their patrons for free for a prescribed length of time. If a particular title happened to be exceedingly popular and became a best-seller, librarians might buy multiple copies so as not to keep patrons waiting too long for an opportunity to borrow the book. This arrangement appeared to be entirely uncontroversial—until e-books came along and caused some publishers to question whether the model for supplying physical books to libraries could be applied to e-books. Some publishers believed that they and their authors were not getting the same value from e-books as they were from the sale of physical books, and, moreover, that the availability of e-books in the library market was directly affecting print sales, causing a net loss in revenue.

When a librarian buys an e-book, rather than having a physical book to put on a shelf, the digital “copy” resides as a file in the library’s database. Patrons borrow the books as digital downloads on their computer or e-reader, but the original digital book remains in the system and, depending on the downloading permissions that were previously negotiated between the library and the distributor/publisher, could be borrowed an unlimited number of times by other patrons.

To create a model that more closely resembles how libraries purchase and loan physical books, publishers use digital rights-management (DRM) algorithms to put a usage limit on borrowing permissions. While an e-book is on a time-limited loan to a patron, the file is “locked” until it is “returned” or when the pre-set loan time expires. Librarians could, in theory, buy more than one license to a title, but the cost for adding additional licenses is not typically in the library budget, particularly since there is no way of knowing what the demand for any given title will be.

As we know from our experience with physical books, some titles are constantly in circulation while others just sit on the shelves and get little use. For any given title, publishers could, in theory, raise the cost of the e-book license, extend the permissions to include more than one borrower at a time, or even allow for unlimited, concurrent use. But for single standalone books, the typical model that librarians prefer to use for their budgets is one borrower at a time, which is consistent with the way physical books are managed.

In the summer of 2019, some trade publishers were concerned that releasing new e-book titles to libraries simultaneously with their release to the retail trade would cannibalize their sales. They worried that readers would borrow the e-book from the library instead of buying the book. Thus, they instituted a policy to delay the e-book release of new titles to libraries until eight weeks after the publication date. The libraries could buy the print version on publication, as usual, but the publishers would retain all e-book sales for their retail distributors and their own websites during the so-called embargo period.

Tensions rose so high when this policy was first introduced, that the headlines in articles about the publisher-library relationship verged on the toxic. Articles appeared in industry publications with titles like, “Are Publishers for or Against Libraries?” ^[1] Librarians had the impression that a few publishers wanted to punish libraries and their patrons, traditionally the publishers’ biggest advocates, without evidence that their sales would be negatively affected.

From the publishers’ point of view, they were being proactive out of concern for possible revenue losses if they continued to allow library patrons free and easy access to their front-list titles during the early days of a new title launch. They thought that they were acting on behalf of their authors and were putting typically strong early sales of new releases at risk if library patrons could download e-book versions for free. However, the eight-week delay policy came from only a hunch about the potential loss of revenue not from the data. (A small number of publishers have gone even further than instituting moratoriums by withholding e-books from library sales altogether).

Librarians have a different view. First, they consider themselves loyal paying customers, and are prepared to pay for e-books just like physical books; and second, by making new titles available to their patrons, in all formats, they are functioning as a kind of marketing arm for authors and their publishers.^[2] In addition, they have more than anecdotal evidence that patrons who frequently use the library and borrow the most books also tend to buy the most books.

Not all publishers instituted an e-book moratorium on libraries, but often e-book availability still lags behind print. Further, depending on the library, all three book formats—print, e-book, audiobook—are not always available for all titles; the reason may be on the publisher’s/distributor’s end or due to the library’s limited budget.

Most publishers have excellent relationships with libraries and do not view them as competitors but rather as arguably the most efficient and effective vehicle for raising awareness of new titles and promoting reading. The issue around e-books arose because of their novelty—as digital files they do not look like physical books on a shelf—and the unknown effect they may have on the introduction of new titles into the market. So, some publishers chose to take a conservative tack and not risk losing revenue.

Indeed, a percentage of readers may borrow or download books instead of purchasing them, but chances are if they did not borrow them, they would not purchase them—or perhaps not even know about them—at all. In an interview published in a recent article in Publishers Weekly, the executive editor of the Library Journal revealed data from a survey that they had just conducted on library patrons’ book-buying habits: “Our data show that over 50% of all library users report purchasing books by an author they were introduced to in the library. This debunks the myth that when a library buys a book the publisher loses future sales. Instead, it confirms that the public library . . . is an active partner with the publishing industry in building the book market, not to mention the burgeoning e-book market.” ^[3] In short, if frequent library-goers borrow a book and like it, they are more likely to buy a copy, if not for themselves then as a gift—or recommend it to others, or better yet share their enthusiasm on social media and demonstrate the power of word of mouth.

Digital publishing has helped publishers expand their options for reaching a wider audience. Innovative digital formats for books and informational websites on general and specialized knowledge are being well received, giving readers access to more curated information from more sources. The e-book market is mostly additive and has attracted new readers into the market rather than siphoning off buyers of either physical books or audiobooks. It is a cliché to say that we need to “meet customers where they are,” but this is precisely what published works in multiple digital formats has enabled publishers to do. Because of the various ways to repurpose and reuse digital content, publishers can create new products from their existing intellectual property (as well as develop new content) and reach just about anyone at any time, allowing readers to choose among a variety of formats based on their personal interests and preferences.

The unstable pricing terms for digital content, especially e-books, are teething pains for publishers as they experiment with a relatively new medium and how to best serve their customers—libraries and individual consumers—while maximizing their ROI.  Physical books are sold, bought, and consumed as individual units, like bottles of water. Although e-books can also be consumed one download at a time, a single e-book file can potentially serve an unlimited number of users. But they can also be aggregated in a database and instead of being sold by the drink they can be licensed to institutions—libraries, schools, and universities—as water from a pump, and purchased through subscriptions like streaming services.

Although they may not alleviate the perception that e-books cannibalize publishers’ sales, subscription models are gaining popularity and have the upside of avoiding individual e-book pricing. Over time, renewable subscription licensing models may help publishers earn more revenue from any given title than they would from a one-time purchase. Libraries are allocating an increasing percentage of their budgets to subscriptions to databases. Since they can track how much usage databases receive, librarians can spend their funds on products that are being used the most instead of owning products that are rarely used or not used at all.

Given the fluctuating purchasing and licensing models for various online products, libraries must adjust their budgets and buying processes. Because of annual renewal rates, subscription models compel libraries to allocate more funds to the maintenance of existing collections over the acquisition of new content. According to some estimates, 25% of library budgets are spent on re-purposing existing content instead of acquiring new content. Even so, budget redistribution seems to be steering libraries in the right direction, providing patrons with the access to the books, information, and knowledge that they want and use the most.

It will take time to gather and analyze data on buying vs borrowing behavior before settling on the ideal model that will benefit all interested parties equally. In the meantime, we should continue to expect more experimentation with pricing models and, perhaps, new-title release embargos of one kind or another.

[1] “Do Publishers Suddenly Hate Libraries,” by Joseph Janes, in the August 16, 2019 edition of Publishers Weekly, discusses this controversy, which has not been entirely resolved. A small number of publishers continue to hold back their e-books from the library market.

[2] A few years ago, my wife and I went to an informal discussion/interview at the Chicago Art Institute with Karl Ove Knausgaard, who had just published his fifth book in his six-book My Struggle series. He said that in Sweden, the government buys enough books by authors to put in all ~1,100 libraries in the country, for two reasons: It is a way to subsidize artistic expression; but also, the library gives authors exposure that they would not otherwise get.

[3] “Survey Says Library Users Are Your Best Customers,” Andrew Albanese, October 28, 2011, Publishers Weekly. Also in the article is this quote from the Library Journal’s Patron Profiles: “In addition to the billions libraries spend buying books, the data show those books in turn are spurring individual readers to buy more books.”