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A Real Solution for HarperCollins

By dbott | March 30, 2011

In my real life, I’m an IT manager for our local public library system.  Normally, I use this blog to publish tech-related articles for some of the digital toys I use at home and work, but today I’m going deviate from my normal geek ramblings.

Earlier this month, HarperCollins (a major publisher) decided to change the licensing model used by libraries when purchasing ebooks from OverDrive (an ebook lending service for libraries). Prior to this change, libraries could purchase titles from OverDrive and allow their patrons to borrow the material for the desired lending period (1 week, 2 weeks, etc.). Once a library purchased a title they owned it forever, however, they could only circulate the number of copies purchased. In other words, if a library only had one copy of an ebook, only one patron could borrow it at a time. As of March 7, 2011, HarperCollins decided to change the licensing terms and force their ebooks to self-destruct after 26 circulations. Their reasoning was that regular books wear out and they needed to come up with a new business model:

We have serious concerns that our previous e-book policy, selling e-books to libraries in perpetuity, if left unchanged, would undermine the emerging e-book eco-system, hurt the growing e-book channel, place additional pressure on physical bookstores, and in the end lead to a decrease in book sales and royalties paid to authors.

This change outraged the library community and has led to wide-spread boycotting of ebooks published by HarperCollins (just search Twitter for #hcod to get an idea). Libraries promote reading and literacy, provide free advertising and promotion, as well as collectively spend over a billion dollars in the US buying materials every year – all of which benefit the publishers. And how do they reward us? By charging MORE* for ebooks than for print books and then having the audacity to “kill” it after 26 circulations.  Intentionally forcing the destruction of ebooks (or any material, for that matter) is wrong. There is absolutely no reason to ever artificially limit an ebook. As it stands, HarperCollins draconian digital book-burning policies will force libraries to make a choice: buy the same titles over and over and over every few years and forego purchasing new titles or only buy new titles.  To make matters worse, libraries don’t actually own the ebooks — they are licensed to them and lose the first sale doctrine.

HarperCollins has not learned the lessons of the last decade from the music industry. Their leaders lack the vision that Steve Jobs was able to harness and turn into iTunes (with well-over 10 billion downloads – http://gigaom.com/apple/10-billion-itunes-song-downloads-could-equal-10k-for-one-lucky-customer/).

HarperCollins can continue down this path of self-destruction, but I’m sure their authors are already thinking about jumping this sinking ship.  No sales, no authors, no HarperCollins.

A Solution:

  1. Add a new option to “Borrow it now” **
    (using “maximum access”-style licensing arrangement that allows unlimited downloads at .99 per download).
  2. Add an option to “Buy it now” (both ebook & print, if desired).
  3. Include links in the front and back of the ebook to allow patrons to purchase items from the publisher.
Monetizing OverDrive

Monetize OverDrive

Revenue Sharing – A Win-win-win-win (and win) Solution

Revenues could be divided up to allow all parties to be winners (publishers, authors, provider (i.e. OverDrive), library (and most importantly, me).  For example:

  1. 30% Publisher
  2. 30% Author
  3. 15% Service Provider (i.e. OverDrive)
  4. 15% Library
  5. 10% Me! :)

Remove the DRM, integrate my idea above,  lower the price and place a few links at the front & back of the ebook to allow patrons to purchase items from the publisher. Publishers will get more sales, more authors will make money and libraries will be able to expand their collections to serve our communities.

** Note: “Borrow it now” is trademarked, patent-pending and copyrighted technology developed by yours truly and may only be licensed for 26 uses.

More Reading

Cory Doctorow on DRM: http://www.boingboing.net/2011/02/25/harpercollins-to-lib.html

Neil Gaiman on piracy: http://kindlewriters.com/2011/02/12/ebook-promotion-neil-gaiman-says-piracy-is-really-marketing/

in 2009, Apple passed 10 billion downloads and dumped DRM in: http://www.brighthand.com/default.asp?newsID=14773

So did Sony. They partnered with Freegal to offer libraries DRM-free downloads of the entire Sony Music catalog: http://www.freegalmusic.com/users/sndlogin

* Need proof that publishers are gouging libraries for ebooks? Here’s a recent study on the economics of publishing ebooks from the New York Times. In the NYT example, our library is actually paying closer to $30.00 for the ebook, not $12.99!  Publishers are making 4x the profit on ebooks compared to print!

New York Times

New York Times - click to enlarge

Topics: Ramblings | 1 Comment »

One Response to “A Real Solution for HarperCollins”

  1. Spencer Says:
    March 31st, 2011 at 3:38 pm

    I think there’s a better solution. I’ve even blogged about it!

    Seriously, though, I think a subscription style database system of batches of ebooks is the way to go. Libraries pay an annual fee and have access to the entire catalog, or verious subsets of that publisher’s catalog for various pricing options.

    Classics subscription? sure, at $X
    Bestsellers? sure, $2X
    Etc. Etc.

    Annually renew or don’t.