Libraries, eBooks and the First Sale Doctrine

In case you haven’t heard, Random House announced last week that it was raising prices on the ebooks they make available to libraries. They didn’t just bump the prices a bit, however. They tripled them across the board. Now, don’t get me wrong, I understand publishers, particularly of the Big 6 legacy variety, are lurching toward total annihilation having problems. But this is simply an unconscionable act in my mind.

Libraries are an important public service. They do more to promote literacy than every publisher in this country combined. To soak them so unrepentently, and try to leech a large portion of their limited budgets in this fashion, quite frankly, disgusts me. Read the article I linked to above. Random House spokesperson Stuart Applebaum actually sounds as though libraries should be thanking them for these usury-level price hikes. After all, they’re still selling to libraries in a relatively unrestricted manner, unlike any of the other Big 6 gang of thugs publishers. He also makes a threat in the guise of a polite suggestion that prices could change yet again if libraries don’t share patron borrowing data with publishers. So not only are they extorting crucial monies from hard-hit library budgets, they also want those same libraries to perform and turn over what amounts to unpaid market research they hope to profit from. It just makes me feel all warm and fuzzy inside with the level of altruism coming from Random House on this.

Realistically, publishers are a business and are behaving thusly, albeit in my mind, in a short sighted and profiteering manner. Nothing requires them to make their products available to libraries. Well, except for that pesky little thing called the first sale doctrine that allows libraries to buy print books, often from wholesalers, then do whatever the hell they want with them. But the first sale doctrine doesn’t apply to digital works, which is why some publishers can withhold their works altogether, severely restrict the ways in which libraries can use them even after paying up, or charge prices 10 times or more what those files are actually worth. And don’t give me the argument that they’re worth more because of the agency model. The Justice Department is about to come down hard and nasty on that little slice of illegal collusion. What Random House is doing here is price gouging what they perceive as a captive audience, plain and simple.

A while ago, I wrote a bit about how I believe we need to develop an aftermarket for digital wares. Part of my reasoning is that the loss of the first sale doctrine is a serious loss of value on the consumer side. Without the possibility of resale or full freedom of use, digital goods should be significantly cheaper than their physical counterparts simply because consumers are getting a product of significantly lesser value than they were. And that says nothing about the fact that reproduction and distribution costs linger in the neighborhood of zero, another quite fine justification for much cheaper prices. A legit aftermarket and a reinstitution of the first sale doctrine would benefit everyone in the long run, from authors to publishers (although don’t expect them to realize this) to readers, and especially libraries. What it doesn’t benefit are publishers like Random House who want to severely overcharge libraries just because they can.

In order for an aftermarket to happen, we need some manner of reining in the potential for unlimited copying on the consumer end. I don’t think that’s an insurmountable technical obstacle, some current DRM already does that. It can be done. The only problem is that big media doesn’t want it to happen. They’re perfectly content to try and reap the whirlwind restablish a monopolistic control over distribution through the various perversions of copyright law they’ve pushed through over the years. And make no mistake, if they could get rid of the first sale doctrine on physical goods, they’d do it in a heartbeat.

Meanwhile, we all suffer for their obsolete delusions. Access to books is cut off or seriously limited by playing hardball with libraries, agency pricing adds 50% or more to the cost of ebooks to consumers, authors suffer from decreased exposure, and the industry on the whole is hampered at a time when a new golden age of reading could possibly be dawning by powerful legacy businesses too short-sighted to get out of their own way.

If I were a cynical man, I’d say publishers’ poor treatment of libraries on ebooks is simply another tool they’re using to prop up their fading print business and slow the adoption of ebooks. Wait, I am cynical, and I’m pretty sure that’s exactly what’s ultimately behind this. But, for now, libraries really have no choice. They’re going to have to have ebooks available in some fashion sooner than later. For my money, however, barring some kind of miracle lessening of copyright law, I’d like to see them tell Random House exactly what they can do with their price hikes. After all, I’m pretty sure there’s a large and growing contingent of independent publishers who would be thrilled to have access to the library system for their works. Hell, they might even be so happy, they won’t charge for their books at all. That certainly would be something to think about. And to me, it seems much more reasonable than paying $100+ for a limited digital copy of a book that should cost $5 or $10, at the most.


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