Ebook Vendors Anticipate Big Five Licensing Terms Becoming More Flexible
After years of expressing concern about the potential impact that library lending might have on consumer sales, major publishers have good cause to take another look at the library market for ebooks, according to executives from library ebook distributors OverDrive, 3M, and Baker & Taylor. U.S. consumer ebook sales experienced 3.8 percent revenue growth in 2014 to reach $3.37 billion, according to the Association of American Publishers (AAP) StatShot Annual survey, released in June. (In comparison, revenue for print books and journals rose 4.6 percent, to $27.9 billion.) While 3.8 percent growth is certainly respectable, it’s a far cry from the doubling ebook sales experienced from 2010 to 2011. They almost doubled again from 2011 to 2012, before flattening in 2013 and rising slightly last year.
As a result, bolstering institutional sales will likely become more of a priority. OverDrive CEO Steve Potash noted that publishers, like all for-profit companies, are always looking for growth, and “there’s still a lot a growth in institutions, and there [are] significant opportunities for growth in education…. If retail is flattening, you have to experiment.”
There’s plenty of territory ripe for such experiments. David Cully, president of retail markets and executive VP of Merchandising/Digital Media Services for Baker & Taylor, noted that “publishers, over the last several years, were reluctant to develop lending models, and wanted to make sure that lending models didn’t, in any way, affect their retail consumer business. So they developed lending models that had various guardrails.”
While other lending models, including pay-per-circ, metered reading, and unlimited simultaneous access, have existed in the library markets—via platforms such as Odilo, hoopla, Freading, Total BooX, and BiblioBoard—until recently the big five have largely stuck to the now-traditional one-book, one-user model, with terms that typically involve significant price increases versus retail, or pricing comparable to retail but restricted by loan caps. Cully, however, noted that he expects terms to become more favorable to libraries as major publishers begin to compete for a share of the institutional markets.
“I think what tends to happen, is that the models of publishers, over time, tend to seek their own levels and become similar…and we’re still in the early stages,” he said.
Tom Mercer, marketing manager for the 3M Cloud Library, agrees, noting that “all of the publishers are evaluating their model now that they’ve been in [the library market] for a while. There was a lack of data, now they all have data. I think, for the most part, publishers believe [libraries are] a good business to be in. It doesn’t detract from their consumer sales. So I think there’s more of an openness among them to think about different things.”
Rodrigo Rodríguez, the CEO of Odilo, which in June became the fourth vendor to offer library lending licenses from all of the big five publishers, wrote in a statement to LJ that “Odilo is exploring different lending options (more than the one-user, one-copy model) with all of our publishers, including the big five. Recently we have seen some of our publisher partners adopt our Pay-per-Use model for library lending, along with featuring it in our new BookClub. We hope to work with the big five to show them the value in these new options.”
CHECK IT OUT
In the consumer market, this willingness to experiment has manifested primarily in business-to-business marketing efforts, intended to facilitate discovery by offering limited-time access to bestsellers or popular titles. For example, HarperCollins has partnered with American Airlines and JetBlue on promotions that enable passengers to sample select titles while in flight. Hachette has worked with Qantas airlines on a similar promotion called “Stories for Every Journey.”
This spring, Simon & Schuster announced a partnership with mobile distribution platform Foli that uses geolocation technology to enable people to read as much of a selected title as they want, as long as they stay in one location. The partnership kicked off with David McCullough’s bestselling biography, The Wright Brothers, which was made available to visitors at the National Air and Space Museum, the Wright Brothers Memorial in North Carolina, and at 50 airports nationwide.
While none of these experiments have involved libraries, there are indications that these major publishers are once again seeing the important role that libraries can play in marketing and discovery. For National Library Week in April, Simon & Schuster announced that for every ebook or hardcover copy of Bryan Grazer’s new title, A Curious Mind: The Secret to a Bigger Life, sold at retail, the publisher would donate a one-year ebook license to a public library or school library.
Another example is HarperCollins’s ongoing participation in OverDrive’s Big Library Read promotions, which OverDrive initially launched in May 2013 with Sourcebooks, featuring Four Corners of the Sky by Michael Malone. HarperCollins partnered with OverDrive on the second Big Library Read promotion later that year, enabling 6,500 libraries and schools to offer Jane O’Connor’s Nancy Clancy: Super Sleuth for unlimited ebook and audiobook checkouts for two weeks in September, 2013. The publisher has been a regular partner in the program ever since, most recently participating in a Big Library Read in June that featured Kate White’s summer 2014 title, Eyes on You, selected by votes from OverDrive libraries.
For publishers, it seems like a low-risk, high-reward promotion. The reviews are in, hardcover sales have already tapered off after one year, and then thousands of libraries, in communities throughout the country, prominently feature the title on their websites and promote the book and the author via reader recommendation, potentially lifting consumer sales of an author’s other work. In the case of Nancy Clancy: Super Sleuth, the title is also the first book in a series, which could encourage readers to purchase subsequent titles after getting hooked.
“For HarperCollins, Sourcebooks, and others who have been in Big Library Read promotions, they’ve had triple-digit lift for the author,” said Potash. “The book that was featured, at the end of the two weeks, had dramatic sales, because there was so much interest in the title. And then there was a lift for [additional titles by] the author.”
LOOKING AHEAD
Bloomsbury USA, while not a member of the big five, is a major publisher that recently participated in a new type of promotional licensing model that OverDrive describes as “book club pricing.” As part of Multnomah County Library’s 13th annual Everybody Reads community reading event in January and February, Bloomsbury allowed OverDrive to sell Multnomah 200 two-month ebook licenses for The Residue Years by Mitchell S. Jackson. Although the licenses were temporary, these terms enabled the library to save thousands of dollars compared with purchasing standard licenses. (In an indication of demand, an additional 200 temporary licenses were purchased during the promotion to eliminate holds lists.)
This type of model is one way in which publishers might respond to a common complaint: The standard one-book, one-user model creates bottlenecks when titles are most popular, but most libraries can’t afford to purchase dozens of copies of every bestseller. Particularly in cases in which libraries must already accept terms that involve loan caps, why shouldn’t licensees be able to make all of a title’s limited checkouts available when that title is most relevant?