Publisher-Library Feud over E-Books Heats Up October 1, 2012Posted by Bill Rosenblatt in Law, Publishing, Rights Licensing, United States.
The US trade associations for public libraries and book publishers exchanged heated words last week regarding the growing impasse over e-book lending. The American Library Association’s (ALA) newly-installed president, Maureen Sullivan, issued an open letter to trade publishers such as Simon & Schuster, Macmillan and Penguin demanding that they license e-books for digital lending. The Association of American Publishers (AAP) issued a response saying, in effect, “Sorry, our hands are tied.”
An article I wrote last year explains the legal background of this issue. Thanks to a legal doctrine known in the US as First Sale, libraries can buy print books and lend them without permission from publishers. But because First Sale doesn’t apply to digital downloads, libraries must get licenses from publishers to acquire e-books for lending. Thus some of the major trade (consumer) book publishers are refusing to license e-books to libraries or are placing restrictions on lending terms.
But that’s not all. E-book technology is also enabling companies like Amazon to supplant some library functions in the private sector, while indie authors and publishers are likely to increase giveaways of their content in digital form, in hopes of exposure. More and more people are reading digitally, while libraries may face a future of lending hardcopy books only. Library patrons will lose, and it’s far from clear that any (legal) private-sector function will completely fill in the gaps.
The good news is that public libraries are finally waking up from the what-me-worry stance they appeared to affect a year ago; Digital Book World says that Sullivan’s “open letter” was borne out of libraries’ frustration about the way things are going.
The bad news is that this situation is going to get worse before it gets better… if it ever does.
The problem with “open letters” is that they are often tacit admissions of powerlessness. Sullivan’s open letter is primarily an attempt to explain the value proposition of libraries to publishers. Yet that aspect of it contains little that publishers haven’t heard before. It also attempts to convince publishers that they, together with libraries, have a special role in society to spread information and culture that they must maintain. This aspect of it is likely to fall on deaf ears.
The heart of the problem is that libraries aren’t comfortable acting like businesses, while the major publishers are. Yet libraries are being forced into discussions with publishers about business terms instead of relying on laws like First Sale. Many library people find such discussions distasteful or distracting, because they believe (rightly) that theirs is a greater mission than being a “channel” for publishers. Moreover, the reality is that such discussions are unlikely to lead to satisfactory conclusions for libraries.
Library gurus such as Robert Darnton of Harvard have suggested innovative models for libraries and e-books. It’s possible that as wireless broadband and connected devices become more pervasive, publishers and libraries may be able to come to some arrangement that involves licensing e-books for time-limited cloud-based reading, instead of relying on downloads of DRM-packaged e-book files as they do now. But if publishers require that such deals reflect libraries’ true value in book sales, then the numbers may well come up short for libraries. They can argue (again, rightly) that they help publishers sell books in general by promoting reading, but it’s hard to quantify that benefit sufficiently.
The AAP’s don’t-look-at-us response to the ALA open letter is at least honest. Trade associations already labor under constant antitrust restrictions. Not for nothing does every trade association meeting begin with what lawyers call an “antitrust benediction” warning participants not to say anything that could be interpreted as collusion; talks I give at trade associations’ events have to be scrubbed by their antitrust attorneys. Furthermore, the Justice Department’s recent investigations into collusion with Apple over e-book price-setting have made it even more for difficult for publishers to collaborate, whether under the AAP banner or otherwise.
Publishers’ lack of ability to agree on library lending terms will only lead to more and more confusion and complexity for libraries and their patrons. In fact, publishers may be loathe to work together to create a workable solution for libraries precisely because it could backfire: if the ALA doesn’t like the terms on offer, it could sue on antitrust grounds.
Libraries may have better luck on the legal front than with technology or business terms. As I have explained, getting First Sale to apply to digital content in general (so that anyone can lend, sell, or give away lawfully obtained digital content) is virtually unthinkable. Yet it might be possible to get Congress to pass a narrower change in the law — specifically to Section 108 of the Copyright Act — that would give lending libraries statutory licenses to lend digital content without affecting First Sale rights in general. It remains to be seen whether the political climate in Washington could entertain such legislation, but it may be libraries’ best hope of survival in the e-reading age.