This is the second of three installments on interesting developments from last week’s IDPF Digital Book conference in NYC.
Another interesting panel at the conference was on public libraries. I’ve written several times (here’s one example) about the difficulties that public libraries are having in licensing e-books from major trade publishers, given that publishers are not legally obligated to license their e-books for library lending on the same terms as for printed books — or at all. The major trade publishers have established different licensing models with various restrictions, such as limited durations (measured in years or number of loans), lack of access to frontlist (current) titles, and/or prices that range up to several times those charged to consumers.
The panel presented some research findings that included some hard data about how libraries drive book sales — data that libraries badly need in order to bolster their case that publishers should license material to them on reasonable terms.
As we learned from Rebecca Miller from Library Journal, public libraries in the US currently spend only 9% of their acquisition budgets on e-books — which amounts to about $100 Million, or less than 3% of overall trade e-book revenue in the United States. Surely that percentage will increase, making e-book acquisition more and more important for the future of public libraries. And as e-books take up a larger portion of libraries’ acquisition budgets, the fact that libraries have little control over licensing terms will become a bigger and bigger problem for them.
The library community has issued a lot of rhetoric — including during that panel– about how important libraries are for book discovery. But publishers are ultimately only swayed by measurable revenue from sales of books that were driven by visits to or loans from libraries. They also want to know to what extent people don’t buy e-books because they can “borrow” them from libraries.
In that light, the library panel had one relevant statistic to offer, courtesy of a study done by my colleague Steve Paxhia for the Book Industry Study Group. The study found that 22% of library patrons ended up buying a book that they borrowed from the library at least once during the past year.
That’s quite a high number. Here’s how it works out to revenue for publishers: Given Pew Internet and American Life statistics about library usage (48% of the population visited libraries last year), and only counting people aged 18 years and up, it means that people bought about 25 million books last year after having borrowed them from libraries. Given that e-books made up 30% of book sales in unit volume last year and figuring an average retail price of $10, that’s $75 million in e-book sales directly attributable to library lending. The correct figure is probably higher, given that many library patrons discover books in ways other than borrowing them (e.g. browsing through them at the library) — though it may also be lower given that some people buy books in order to own physical objects (and thus the percentage of e-books purchased as a result of exposure in libraries may be lower than the corresponding percentage of print books).
So, in rough numbers, it’s safe to say that for the $100 Million that libraries spend on e-books per year, they deliver a similar amount again in sales through discovery. It’s just too bad that the study did not also measure how many people refrained from buying e-books because they could get them from public libraries. This would be an uncomfortable number to measure, but it would help lead to the truth about how public libraries help publishers sell books.
Update: Steve Paxhia found that his 22% number was of library lends leading to purchases during a period of six months, not a year. And the survey respondents may have purchased books after borrowing them more than once during that period. His data also shows that half of respondents indicated that they purchased other works from a given author after having borrowed one from the library. So, using the same rough formula as above, the amount of purchases attributable to library usage is more likely to be north of $150 million. Yet we still have no indication of the number of times someone did not purchase a book — particularly an e-book — because it was available through a public library system.