Book Sharing Bankrupting Publishing Industry!

pirate-librarians.jpgLibrarians are the worst sort of pirates. Eric Hellman has a wry look at how Offline Book "Lending" Costs U.S. Publishers Nearly $1 Trillion
To get to the bottom of this story, Go To Hellman has dispatched its Senior Piracy Analyst (me) to Boston, where a mass meeting of alleged book traffickers is to take place. Over 10,000 are expected at the "ALA Midwinter" event. Even at the Amtrak station in New York City this morning, at the very the heart of the US publishing industry, book trafficking culture was evident, with many travelers brazenly displaying the totebags used to transport printed contraband.

As soon as I got off the train, I was surrounded by even more of this crowd. Calling themselves "Librarians", they talk about promoting literacy, education, culture and economic development, which are, of course, code words for the use and dispersal of intellectual property. They readily admit to their activities, and rationalize them because they're perfectly legal in the US, at least for now.
For a more serious look at library economics, I suggest Hellman's post Why Libraries Exist where he cites a study comparing circulating libraries and video rental stores The study included the effects of transaction costs, production costs and the different values of owning and sharing, and found that library-like sharing benefits both publishers and consumers when the transaction cost of sharing is less than the marginal production cost:

1) more books will be read;
2) consumers will pay a lower price per reading;
3) the sellers will make a higher profit; and,
4) consumers will be better off.

See also: Confessions of a Book Pirate.
[image http://www.flickr.com/photos/sylvar/ / CC BY 2.0]
[via copyfight]

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    1. I believe the article was being a bit tongue-in-cheek, pointing out the irony of libraries being likened to online book piracy

      1. Can money not earned be considered a cost?

        Well, it works for the RIAA…

        I wonder if the “piracy victims” ever tried to write off those “losses” from their taxes as any other victim from thieves can. It would be an interesting test, led by the IRS no less.

    2. Yes in economic terms, money not earned is, in fact, a cost. Ever heard of “There’s no such thing as a free lunch?” Because on some level, there is always a cost (e.g., the gas/time/energy spent getting to the lunch, the time spent eating the lunch). In very simplistic terms, the “free lunch” actually cost you because you could have spent your time earning money.

  1. The study Hellman links to is a little clearer on the “potential lost revenue” argument that some people are making… the story that was reported in Publisher’s Weekly

    http://www.attributor.com/blog/book-piracy-costs-study/

    He takes an amusing look at it, but the piracy is real. Whether it’s having a bottom-line effect the way publishers claim is a much more open question.

  2. Yea, it’s not like we can have all dem young’ins go down to the local library an do some of that “readin” we be hearing about, that be the devil!

    But in all seriousness libraries are there to help disseminate information to not only adults but also to children. Not everyone is fortunate enough in the US to have a computer and internet connection so they rely on libraries to find information they want or need (need for reports or whatnot). Not everyone has the kind of money needed to purchase large amounts of books just for a tidbit of information.

    Now with that said, the inverse can be held true, in that while people may be able to afford internet and a computer, their local library (if they even have one) may not have the book available or refuse to stock it due to (what I see as idiotic) morals, which is more often than not the case around where I live. They might not have the money needed to prchase some of the books and have to resort to other methods to obtain them, which albeit legally wrong, falls into one of those moral grey areas (not so much like a guy stealing to afford his kid’s medicine, but similar). Now am I saying that ALL books should be free and whatnot, hardly, but some of the books (especially encyclopedias) are just too expensive for a person on a reasonable budget to buy.

    1. I don’t think it was necessary to comment on whether someone is white, black, brown, or the other thing. I knew plenty of non-white people who were better off than me in terms of technology and access.

      When it comes to computers and libraries, it’s all a matter of where you live and how far you’re willing to go to get it. Living in Chicago, there’s a vast amount of libraries available and I might add that they all have computers for all the people who can’t afford word processing and internet at home. Libraries have even been known to be hubs of piracy from patrons. Unless a library has very diligent IT support, it’s hard to stop people doing what they want on library computers.

      1. >> I don’t think it was necessary to comment on whether someone is white, black, brown, or the other thing.

        Heh. I had to look to see what comment you were referring to..was it this?

        >> Now with that said, the inverse can be held true, in that while people may be able to afford internet and a computer

        Unless some other anonymous comment was pulled, I think you misread the word “while” for “white” maybe?

  3. their local library (if they even have one) may not have the book available

    You DO know about InterLibrary Loan?

    In a nutshell: (You to Librarian) “You don’t have this book. I want to read it.” (hand over piece of paper with title and ISBN)

    (Librarian to you) “We’ll have it within a week or so. We’ll let you know where it’s here.”

    (You to Librarian) “Thank you!”

    It really is just about that simple.

  4. That is what a library is about… and did you know that libraries have their own rights in copyright? Of course, if the book industry jumps on the ACTA bandwagon, those rights could be in danger.

    Greetings, LX

  5. One of the more entertaining things about being a librarian is attending conferences like ALA. Not only do you get to meet great and wise information professionals, attend great panels and seminars, but you also get handed BAGS AND BAGS OF SWAG from publishers.

    Seriously, my first ALA conference I came home with 5 very large shopping bags full of books, posters and general ephemera. Many of the books were months away from coming out (ARC=advanced reader copies) and the posters were often gorgeous pieces from top flight children’s artists that decorated our library.

    All in the service of wooing a bunch of book pirates :)

  6. #6,

    If the local library doesn’t subject the books that come in to the same censorship as the books they shelve. If the child isn’t looking up taboo topics like being LGBTTIQQA. If…

  7. Regarding interlibrary loan, which is deeply awesome but hardly piracy: Libraries do pay out the nose to the Copyright Clearance Center for each interlibrary loan transaction (of journal articles, at least, which comprise most ILL requests.) It’s common for a 10 page article to cost the lender library $75 in copyright fees. The library does not make a profit, either–we perform it as a service, and what we charge patrons (~$12) does not begin to cover the cost. We are dirty book pirates, but let it not be said that we cheat the publishers and vendors out of much. :)

  8. If not for the library while I was growing up, I wouldn’t have discovered the joys of reading; we were poor and couldn’t afford alot of extras. Once I became a working adult I’ve probably spent thousands of dollars on books; so people can blame libraries for lost revenue but in my case, publishers and authors wouldn’t have gotten my money at all if it weren’t for the library.

  9. As someone who works for one of the Big Publishers and attends these meetings, I can safely say a few things:

    1) ALA MW has probably closer to 5,000 attendees. It is much smaller, maybe 1/4 or 1/5 of the attendance of the Summer conference. It is mostly just business meetings.

    2) We like libraries. In fact, probably around 60-70% of our revenue is from libraries, much of that nowadays in the form of eBooks.

    3) Some companies, like mine, do not have DRM on their eBooks, so we are talking about just basic pdf files. Under fair use – and the contract – these can be put on any reader or downloaded and saved by the end user, or even sent to other libraries through the electronic Inter-Library Loan process. The prooblem (and I would bet it is much, much smaller than the article states), is if other libraries or people make repositories of the data, or worse, repackage or resell it. Unlike a “book” that must be “returned” to a “library,” an eBook exists forever and is very easily copied and disseminated (that is kind of the idea), and eBook piracy is a small problem now that has the potential to become irritating and time-consuming. It is absolutely not something to laugh off, nor is it something we can “write off of taxes” (seriously?).

    4) Many publishers and aggregaters are no longer willing to take the risk and have terrible models with crippling DRM or overly-protective contracts. We (and we are the minority) find that business is better without DRM. Shocking, I know. But there you go. Don’t lump us all together. Some publishing companies are a little, ok, Evil, but others – even big ones – are acually in the business of encouraging academic research, study, and innovation with our books and journals.

    5) A lot of libraries buy eBooks through third-party vendors and *not* directly from the publishing company. This is not recommended as a) we don’t give the vendors everything we publish; b) they have such insanely restrictive rights that you might as well buy the print because it’s so ridiculous – I mean, what is the point of an eBook if you can only print three pages and only one person can view it at a time; and c) publishers can negotiate and play with your budget more easily, within reason. If your rep says they can’t, it’s a lie, promise.

  10. I know this piece is “funning” us, with its talk of library piracy and all — but it makes me nervous simply because it puts the idea in the heads of some less-than-scrupulous publishing folks that maybe such “piracy” should be stamped out, for reals. Which would suck.

    And which would make baby jebus cry.

  11. Of course! The lending of a physical object (which was purchased) to one person at a time (who is penalized if they don’t give it back after the loan period) is *exactly* the same thing as the limitless distribution of a digital file (which, likely, won’t be purchased) to whoever wants it (and won’t even have to drive/walk to their local branch if they want to read it). Sharp analysis.

  12. Note that the Roehl & Varian study cited in Hellman’s “Why Libraries Exist” dates from 1996. The issues have developed and diverged a lot since then. It’s an insightful piece for its time, but now mostly of historical interest.

  13. but isnt the whole reason publishers woo the librarians at ALA and what not that librarians are the only ones who BUY books?

    i dont know about you but there’s this thing called taxes.. and sometimes they go to these things called libraries.

    most of these books would never be purchased by americans and libraries are huge customers who buy several copies. why i can’t imagine that some city libraries like la or ny dont buy several hundred copies all in one go for their branches.

    i’d hardly call that piracy. if it was then what’s with the budget cuts meaning less books?

    i get that this is all a joke but i dont think the publishing companies should take this as a joke. the book market is already hard enough without alienating the one solid stable market you do have.

  14. The real issue, as I see it, and which does not really seem to be being noticed yet, is that when eBooks finally do become accessible to all – and they will – they will do to the book industry what MP3s did to the music industry. eBooks are nearly there. At the moment, the dissemination of eBooks is not quite easy enough for the average user. But the equivalent of iTunes will eventually do that. I only hope that the book Publishing industry responds more constructively to the change than the music publishing has.

  15. My thoughts are that of course! The lending of a physical object (which was purchased) to one person at a time (who is penalized if they don’t give it back after the loan period) is *exactly* the same thing as the limitless distribution of a digital file (which, likely, won’t be purchased) to whoever wants it (and won’t even have to drive/walk to their local branch if they want to read it). Sharp analysis.

    There are some POD book publishers who opt for exactly this kind of system.

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