Multiple Updates at the Bottom of This Post (Latest: August 13th)
From the WSJ (Subscribers Only):
One of the country’s largest book publishers is changing the way it sells e-books to libraries, whose increasingly popular digital-book borrowing apps are taking a toll on its sales.
“Library reads are currently 45% of our total digital book reads in the U.S. and growing,” Macmillan Chief Executive John Sargent said in an interview. “They are cannibalizing our digital sales.”
Macmillan’s new policy will take effect on Nov. 1, said Mr. Sargent. After a book has been out for eight weeks, libraries will be able to buy as many additional digital copies as they want. Macmillan said the delay, known in publishing circles as “windowing,” is intended to boost the sale of new books, both digital and hardcover.
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Macmillan is now the fourth Big Five publisher to change its terms for digital content in libraries in recent months—but its changes, and the views expressed by Macmillan CEO John Sargent, are by far the most unique and contentious of the group. In a July 25 memo (addressed to authors, illustrators, and agents), Sargent not only delivered the news of Macmillan’s library e-book changes, he basically called out libraries for depressing author payments.
“It seems that given a choice between a purchase of an e-book for $12.99 or a frictionless lend for free, the American e-book reader is starting to lean heavily toward free,” Sargent wrote. “Our new terms are designed to protect the value of your books during their first format publication. But they also ensure that the mission of libraries is supported.”
Full Text of Statement From Macmillan CEO
Direct to Macmillan Letter
2 pages; PDF.
The American Library Association (ALA) denounces the new library ebook lending model announced today by Macmillan Publishers. Under the new model, a library may purchase one copy upon release of a new title in ebook format, after which the publisher will impose an eight-week embargo on additional copies of that title sold to libraries.
“Macmillan Publishers’ new model for library ebook lending will make it difficult for libraries to fulfill our central mission: ensuring access to information for all,” said ALA President Wanda Brown. “Limiting access to new titles for libraries means limiting access for patrons most dependent on libraries.
“When a library serving many thousands has only a single copy of a new title in ebook format, it’s the library – not the publisher – that feels the heat. It’s the local library that’s perceived as being unresponsive to community needs.
“Macmillan’s new policy is unacceptable,” said Brown. “ALA urges Macmillan to cancel the embargo.”
The new Macmillan ebook lending model is an expansion of an existing policy that went into effect in July 2018, when the company, without warning, issued a four-month embargo applying solely to titles from the company’s Tor imprint. At the time ALA stated that the delay would hurt readers, authors and libraries.
Since last fall, Hachette Book Group (HBG) and Penguin Random House (PRH) have eliminated “perpetual access” for libraries and replaced it with a two-year access model. Simon & Schuster changed from a one-year to two-year access model. While re-evaluating their business models, none of these firms implemented an embargo—deciding that equitable access to information through libraries is also in their business interest. HarperCollins continues with its 26-loan model. Macmillan now stands alone in its embargo policy among the largest (Big 5) publishers.
Macmillan will decrease its price to $30 for the single initial copy of an ebook. Unlike other Big 5 publishers, this copy of Macmillan titles come with perpetual access. After the embargo period, additional copies will be available for $60 per copy for two years of access.
“This new embargo is the latest evidence of a troubling trend in the publishing industry,” said Brown. “ALA is developing a strategy to address this trend in the long term. Following the model of ALA’s former Digital Content Working Group, this advocacy effort will extend several years, not several months, and will not be limited to one company in the publishing ecosystem. ALA will push harder and explore all possible avenues to ensure that libraries can do our jobs of providing access to information for all, without arbitrary limitations that undermine libraries’ abilities to serve their communities.
“In the short term, ALA calls on library customers of Macmillan Publishers to tell CEO John Sargent they object to the publishing company’s new policy.”
Attn: Mr. John Sargent, CEO
120 Broadway Street
New York, NY 10271
UPDATE 10 (August 12) Macmillan’s New Library Ebook Lending Model and Its Effect on Libraries (via BookRiot)
UPDATE 9 (August 8) North Dakota State Library Denounces Publisher’s New Policy (via KXNet.com)
While Macmillan’s embargo is disappointing news for libraries, authors, and, most importantly, readers—it reinforces the need for a cross-industry initiative to identify ways publishers and libraries can continue to support their intrinsically related missions while delivering mutually beneficial outcomes. We encourage more publishers, independent booksellers, authors, agents, and allied associations and vendors to collaborate with us and help measure the real impact libraries have on developing readers, driving book discovery, and generating book sales in their local communities, and beyond.
Note: “Initial funding for the Panorama Project is being provided by Rakuten OverDrive”
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UPDATE 1 Article by Matt Enis, Library Journal
On a positive note, libraries with small ebook collections—as well as those concerned specifically with digital preservation and the maintenance of long-term backlist collections—may embrace Macmillan’s decision to offer one perpetual license per library for a lower initial price upon publication. Previously, the publisher had not offered perpetual licenses to libraries. Sargent wrote that the new terms had been decided upon following discussions with “library systems large and small and to the [American Library Association] to understand their needs.”
In a recent interview with sf author Jason Sanford, Fritz Foy, president and publisher of Macmillan’s Tom Doherty Associates, noted that these discussions had revealed to Macmillan that ebook pricing and licensing terms impact libraries differently based on the size of the library system. For example, while a large, urban system might easily loan out a new bestselling ebook 26 times during the first year of a two-year license, a small or rural library may not match that, making the smaller library’s per-circ costs much higher.
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