What Agency Pricing and EBook Lending Limits Mean for Readers

kindle At first when I thought about the latest eBook news, this piece was going to be a mini rant about how publishers haven’t got a clue about eBooks and how popular they’ve become. But I suspect that isn’t entirely the case. According to the Association of American Publishers, eBook sales for 2010 increased dramatically, rising to 164.4% with eBooks bringing in $441 million, compared to eBook sales of 61.3 million in 2008. EBook sales have jumped 623% since 2008. Quoting Publishers Weekly, “For the first 10 months of the year, e-book sales from the 14 houses rose 171.3%, to $345.3%, 8.7% of the trade sales of reporting publishers…adult hardcover sales from 17 reporting houses fell 7.7%, and sales from 9 mass market houses were down 14.3%. Sales of trade paperbacks from 19 publishers were flat.”

From the figures above, it looks like readers are changing more and more from printed books to eBooks, and surely publishers know that. The Book Industry Study Group (BSIG) did three different studies in 2010 on eBooks finding that readers are picking eBooks over paper because of the affordability. Over the past year, this for the most part has been eliminated with agency pricing. For those that are new to this discussion of agency pricing, the bookseller is unable to discount eBooks, the price is set by the publisher in contrast to the discounts that booksellers are able to make on printed books. So many times the eBook costs more then the actual printed copy.

The problem with this for me as a reader is the preceived value. With a printed book I own it, allowing me to trade it, give it away, loan it freely to my friends. For the most part, none of this is available with eBooks. In addition, with printed books, the publisher has to pay for paper, shipping and so on. Since the cost of an eBook should be less, and I don’t have all the benefits that a print book gives me, I would expect to spend less. However, as a reader, it seems that publisher policies are throwing up roadblocks in an area that has actually shown growth in this economy. Why do I say this? Over the last week two different announcements have been made affecting e-books. First HarperCollins is seeking to limit the number of times your library can loan digital e-book to 26 times, and then the library must purchase another license. The New York Times article on the subject is here. Yesterday, Random House announced that they switching to Agency Pricing. With these two announcements publishers are affecting both availability and cost.

There are several different book sites that have already discussed the HarperCollins policy, and I would add to them by saying that this announcement sets a precedent that from a reader’s perspective, should be upsetting. Librarian in Black addressed it in such distinct way that I am just going to quote her:
“I believe that authors, writers, and publishers can flourish when their works are readily available on the widest range of media. I believe that authors, writers, and publishers can thrive when readers are given the maximum amount of freedom to access, annotate, and share with other readers, helping this content find new audiences and markets.”
HarperCollins request is contrary to all of the above. Libraries are looking to maximize their dwindling funds, and seeking ways to provide current media to their patrons. I use the library to discover new authors, but I doubt my library will be buying as many eBooks from this publisher. And why should libraries purchase eBooks that they cannot lend freely, when they can provide a hard copy with a longer life span then 26 patrons? HarperCollins explanation for the change is that unlimited access to eBooks by patrons will hurt eBook sales. As of right now tensions are high between HarperCollins and librarians, with some even going to the extreme of setting up web pages to encourage boycott of HarperCollins books as described by Publishers Weekly here.

I have had my e-reader (Kindle) for three years. I love it. At first my biggest concern was the availability of eBooks. Publishers were slow to offer all books in that format. Now most books are available but they cost the same as the printed copy and I refused to pay the same price. As the Agency six continues to devalue me as a consumer, I am taking my business to other publishers. As far as I know, Harlequin, McGraw-Hill, and O’Reilly Media are the primary holdsouts against agency pricing. Harlequin seems not only seems to appreciate me as a eBook customer, they also offer special promotions to readers of their print versions as well. Luckily they have many authors that I love. Also, I have looked more at the smaller independent publishers of eBooks. As of right now, I have two eBooks on pre-order with a released date of March 22. Both books are published by Random House. If the pricing stays the same, then I will buy the books. If the pricing increases, I plan to cancel both. I have already requested the hardback from my library, just in case. I will buy the paperback, if I find it discounted.

How do you feel about HarperCollins move to require libraries to buy a new licence for an e-books after it has been checked out 26 times? Do you think that this is feasible for libraries, facing budget cuts? If you have an e-reader are you still buying eBooks priced the same as paper copy or have these pricing policies affected your buying decisions as a reader of eBooks?

– Leigh Davis

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60 Responses to What Agency Pricing and EBook Lending Limits Mean for Readers

  1. Leigh AAR says:

    Elizabeth Rolls – that is crazy. I just finished a book by an English author and loved the brief introduction to life there. The slang words, brand names were almost as entertaining as the story. I would love to visit Australia, and reading a book based there while not quite the same, would at least allow me to visit in my imagination.

    • Leigh AAR: Elizabeth Rolls – that is crazy.I just finished a book by an English author and loved the brief introduction to life there.The slang words, brand names were almost as entertaining as the story.I would love to visit Australia, and reading a book based there while not quite the same, would at least allow me to visit in my imagination.

      Well, would you believe that I occasionally get letters from American readers correcting my spelling – my books use UK English – and even punctuation, because the London office house style is single quotation marks for direct speech. Early North American editions of Harry Potter and the Philosopher’s/Sorceror’s Stone changed various things, like Mom instead of Mum, booger instead of bogies, to make it more comprehensible to U.S readers. Admittedly we’re dealing with kids reading the books, but kids are not stupid.
      I agree that it’s crazy, but the view is that readers like familiarity and the bottom line is that publishers will always cater to the majority. The thing to remember is that readers here at AAR are not necessarily typical of the majority of readers. Readers and reviewers here, and at other similar sites and blogs, might express the same view that you have, Leigh, but unless the Market Gods are convinced it is a majority view, they aren’t interested.
      Take Susan Elizabeth Philips’ football books. You could just as easily have had an Australian author decide to write the same type of series set around our national football game. Assuming the author had SEP’s level of talent, would it get the U.S audience? Quite probably not. Unless SEP wrote it, and I’m blowed if I know why she would, or should.

  2. Leigh AAR says:

    Jo-Anne W. I should do the same thing, instead of just complaining. Until more competition comes from indie authors, I think we are stuck with agency pricing. The projected growth of e-readers is like 40 million this next year.

    Tinabelle, like you I love my kindle, and it is my preferred way of reading books. But over the next six months, I am going to consciously pick the least expensive route for books, whether library, paper, or e-book. I am not saying, I won’t buy e-books. It is so tempting. But I am going to try do utilized some delayed gratification. A pretty big challenge for me with books (grin)

  3. Tahyun says:

    I dont have an ereader but I am thinking about getting one. As for pricing, I would not mind buying an ebook that was the same price as the regular because, generally, I only buy mass market paperbacks and those are plenty cheap enough for me, especially with a 10% discount, and I dont like to think that author royalties might be being cut into. However, I do not think I could for a second stand behind the decision as pertains to libraries. Faced with choosing between buying a digital copy of a mass market several times or buying a masmarket that ten times as many people are going to find and love – I can imagine which a library, many of which are sturggling to stay open, would chose. I also cant imagine the choice working for the favor of publishing companies. When I was desperate for a book, but low on cash (happens often at my age), I took whatever format that library had – I am sure there are plenty of people out there who are just the same. In the end, I think publishers will be hurting (if that’s possible…), because that option just seems untenable in the long run.

  4. farmwifetwo says:

    “Well, would you believe that I occasionally get letters from American readers correcting my spelling – my books use UK English ”

    Elizabeth, this made me smile. I have an online friend that when she started her blog wrote in UK English and put the US equivalent’s in quotes. I have to admit I went “huh”, but I never thought about how different Canadien, eh? English can be from the US version. We seem to use a combination of British and US.

  5. DJ says:

    Well, I think that policy is criminal. A library book should be able to be loaned as many times as it lasts, whether it is in print or electronic format. That is the point of a public library. And libraries have existed for a long time in conjunction with for profit book sales, I think only to the good of book sales.

    For me, the only advantage of my e-reader is its portability and the ability to also borrow library books on it. I bought a Nook instead of a Kindle, simply because I can check out library books on it. I liked the Kindle machine much better.

    But it annoys me to no end when electronic files cost the same as a lovely, print book. I really do feel that the printed books have a greater value than an electronic file. And, as you pointed out, the costs to produce them must be less, since they save on physical costs and shipping.

    I fear that if libraries are prohibited from being able to lend e-books they have legitimately purchased, that I will find my e-reader is only a novelty toy, and that I will be returning to printed books. I’m sure my cash-strapped library system can’t afford to keep re-purchasing the same titles over and over again. Or if they did want to do so, it would simply mean a much narrower pool of available titles, since they wouldn’t have the money to broaden their collection beyond the very most popular titles.

    I prefer to read hard copy books anyway, I just wanted the portability of having many with me on a trip in such a small machine. But if publishers are going to let greed affect their treatment of customers to such a degree, pff… I’m not so enamored of reading electronically that I won’t let it go.

  6. Leigh says:

    DJ, I love the convenience and the immediacy of my kindle probably more then you. I like printed book fine, but I wouldn’t say that I have a preference for them. However, I am now buying the least expensive way I can. If my library has the book, then I am getting it from them. If not I look for used, or discounted.

    I didn’t realize that the Nook could download library books. I have the kindle so I haven’t really tried to check out e-books. Still it is disturbing about the price change by Harper Collins.

    E-books cost seems to be on very ones mind. I run across several articles lately about this.

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