Planet Money Indicator: NPR



SYLVIE DOUGLIS, BYLINE: NPR.

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WAILIN WONG, HOST:

At the Whatcom County Library System in Washington State, they have a printed copy of “Fahrenheit 451”. You know, it’s Ray Bradbury’s dystopian novel about a society where books are banned. They are set on fire instead of being read. Now the library bought its print copy of this classic 12 years ago, and it’s still going strong. Carmi Parker is a Whatcom County Librarian.

CARMI PARKER: It’s been around about 100 times, which is really good.

WONG: It still hasn’t disintegrated after 100 times.

PARKER: Yeah. I think maybe it’s the people reading this particular book who pay attention to their books. I am not sure.

DARIAN WOODS, HOST:

Whatcom County Library also has a digital version of “Fahrenheit 451”, but the library does not have this e-book. Instead, it pays $60 to license that digital copy for two years.

PARKER: So if we want to offer that for the next 10 years, it’s $300. And I can buy the paperback for $17.

WONG: Same title, different formats, very different prices. This is THE PLANET MONEY INDICATOR. I am Wailin Wong.

WOODS: I’m Darian Woods. E-book pricing is a major source of tension between libraries and publishers that has sometimes escalated into public disputes, boycotts and even litigious lawsuits.

WONG: Today on the show, we examine the economics of digital lending and how the pricing debate exposes big questions about what it means to pay, own and access information in the digital age.

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WONG: You probably think a library has everything in its collection – books, CDs, DVDs. My local library even lends mobile hotspots and ukuleles.

WOODS: Well, I shouldn’t have bought that ukulele then.

WONG: (Laughs).

WOODS: And in terms of physical media, like printed books, the library owns them. He paid to acquire them. And under a copyright law known as the first-sale doctrine, a library that owns a book can simply loan it out. It doesn’t need to pay any fees or ask permission from the publisher.

WONG: But for e-books, the first-sale doctrine doesn’t apply because, well, there’s no sale.

PARKER: The crux of the matter is that libraries don’t own any of this the way they own print.

WONG: Instead of buying e-books, libraries license them, and they actually license them from distributors – those middlemen in the publishing industry. One of the biggest e-book distributors is a company called OverDrive. They create the app, Libby, which you’ve probably used if you’ve ever checked out an eBook from your public library.

WOOD: Yeah. So I use it myself. You know, you just have it on your phone. You don’t even have to visit the library. You can put a title on hold. You can borrow it. You can read it. And you return it all through the app.

WONG: Carmi Parker’s library started offering eBooks in 2011. At the time, they paid an average of $14 for a single eBook license, which is about the retail price of a printed book. This e-book could be loaned out one at a time, and the license was perpetual, meaning it never expired.

WOODS: But around 2018, the big publishers started capping new licenses at two years. So for these new licenses, after 24 months, that digital copy would expire and libraries would have to pay again if they wanted to continue offering that title.

PARKER: At the time, you know, a lot of librarians were extremely concerned about what this would mean for their collections. And when they went to 24, they didn’t lower their prices.

WOODS: Carmi says the average cost of an e-book license in her library has tripled over the past decade. This far exceeds the increase in the prices of printed books.

PARKER: We can’t even afford to re-license everything we have licensed. Very high unit prices for e-books don’t make sense to me because it means libraries are buying fewer units. And it seems to me that publishers should want libraries to have as wide a range as possible.

WONG: But librarians and publishers don’t always have the same priorities. Publishers, of course, are businesses and their authors must sell books to make a living. Publishers fear that digital lending cannibalize e-book sales because it’s so easy to borrow an e-book from the library for free. Industry data shows that apart from a pandemic peak in 2020, e-book revenues have declined since 2014, while digital lending through libraries continues to grow.

WOODS: Libraries also want to get books into people’s hands, but not through sales. And they say digital materials expand access for people who can’t access a physical library or who might have a disability that prevents them from using a printed book.

WONG: So determining fair pricing for e-books is, like, this balancing act, juggling the financial desires and realities of publishers, authors, libraries, and readers. And things really boiled over two years ago with a digital lending dispute that split the book world.

WOODS: Public libraries are not directly involved, but they are paying very close attention to this court case because it could affect them. The dispute concerns the Internet Archive. It is a non-profit organization that maintains this online repository of all kinds of digital documents that anyone can access. It has been around for almost 30 years.

WONG: Yeah. It contains long-forgotten scholarly works and periodicals, even old computer games and filmstrips. But the Internet Archive also operates something called the Open Library, where digitized versions of books are available for anyone to view for free.

WOODS: So, from a borrower’s perspective, it doesn’t make a big difference to your experience of borrowing e-books. But behind the scenes, it’s very different. The Internet Archive does not license e-books in its Open Library project. Instead, the Internet Archive acquires a printed copy of the book, then makes a digital version available to borrow one at a time. And this model is called controlled digital lending.

SANDRA ENIMIL: What you own is what you can lend.

WONG: Sandra Aya Enimil is the copyright librarian at Yale University Library. She is a proponent of controlled digital lending and has been following the case. She has a law degree and a library science degree, so she has, like, the combined powers of a lawyer and a librarian.

WOODS: Double threat.

WONG: And Sandra says controlled digital lending is supposed to mimic what happens with printed books.

ENIMIL: You have a physical copy. Then you lend a digital copy and the physical copy goes into escrow. It is not made available to other people to pick it up.

WOODS: I mean, it’s a super creative solution to copyright law, but it seems like we’re not entirely sure if it’s legal.

WONG: Yeah – because, you know, one person’s copyright solution is a gross violation of another person’s copyright.

WOODS: That’s right.

WONG: And so in early 2020, four publishers filed a lawsuit against the Internet Archive, and they filed a lawsuit after the website temporarily removed waitlist restrictions on loans. It was during the first months of the pandemic.

WOODS: The Internet Archive says this was an emergency measure to help students and others while schools and libraries are closed. But the publishers sued the archive for copyright infringement, saying the website copies and distributes books without compensating the people who created that work – the publishers and the authors.

WONG: We contacted the Association of American Publishers. Their general counsel, Terrence Hart, said the Internet Archive was committing systematic theft. Terrence said, in quotes, “Internet Archive is not a real library. It only pretends to be one”, without quotes.

WOODS: Fighting words.

ENIMIL: Part of the tension is for a publisher – they look at it and say, now this thing is digitized, and we’re not getting anything for it because now you’re using it and circulating it, but we don’t have no I didn’t have any money for that. And then our answer is, but there was money exchanged when we first bought the physical thing. We paid for it.

WOODS: But the publishers say, okay, well, you paid for the book in print, but it’s still illegal under copyright law to reproduce it, distribute it, or change it in a new format by digitizing it. And publishers totally reject the idea of ​​controlled digital lending. Terrence of the Association of American Publishers called it a rhetorical smokescreen, and he said, in quotes, “it has about as much legal validity as the concept of dibs, i.e. not at all”, end of quote.

WONG: A judge has yet to rule in the Internet Archive case. But librarians like Carmi and Sandra are watching the proceedings closely because the fallout could have implications for how digital works are valued and loaned out. Sandra, for her part, tries to remain hopeful.

ENIMIL: Even though I mentioned that, you know, libraries and publishers approach the issue from different angles, I think there is a kind of common ground that we can eventually reach, and I hope that we will do it because we need each other.

WOODS: Maybe they could start a book club together.

WONG: This episode of THE INDICATOR was produced by Corey Bridges and Nicky Ouellet with engineering by Robert Rodriguez. Kathryn Yang checked the facts. Viet Le is our main producer. Kate Concannon edits the show. And THE INDICATOR is an NPR production.

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