Decommodfying E-Books

A readers shouldn’t have to pay anything to download an e-book. Here’s the gist of the economic argument from Postcapitalist Books — Pamphlet 2:

There are no variable costs associated with printing, transporting, warehousing, and distributing copies of e-books, so I ought to be able to download them for free.

Libraries already give readers free access to books. But it’s just a loan: the reader borrows the book for a short duration, then returns it. Libraries also lend e-books. There is no physical book being lent, its possession being transferred from the library to the reader; rather, the reader is granted access to an electronic copy of the book. The reader doesn’t return the borrowed e-book either; rather, when the predetermined lending interval expires, the library blocks the reader’s online access to the book. Why doesn’t the library simply let the reader keep the downloaded copy of the e-book? It would be cheaper and less of a hassle. Every member of the library could download a copy of the book without paying for or returning it, and without exhausting the library’s “supply” of that book. No waiting lists to be maintained by the library; no waiting by the reader: just click and go.

Well, it wouldn’t be fair, would it? Just because there are no costs to be covered in making copies of an e-book, that doesn’t mean that the book cost nothing to make. Writing, selecting for publication, editing, formatting: all of the fixed costs incurred in transforming  a manuscript into a real book remain. Selling e-books one at a time, even when there are no one-at-a-time costs to be covered, is a way of recouping incrementally the fixed costs.

However, as I belabored previously, the writer, who does most of the work, gets paid only a small fraction of the per-book revenue. Most of the revenue stream gets funneled to the middlemen. That’s true even with e-books: the writer might get 20 percent instead of 12, but the other 80 cents on the dollar goes to the agent, the publisher, and the e-bookstore. The per-book price for an e-book is lower than that for a physical book, but the price gap is surprisingly small and getting smaller. Even much of the responsibility for editing and publicizing new books — fixed costs traditionally covered by the publisher — have largely been shifted to the author. Lower costs of production translate into higher profit margins for the commercial publisher and its investors.

If the writers organized their own publishing companies and could find readers for their books, they could continue to sell the books one at a time, recouping their own costs of writing and editing more directly. That’s the dream of the self-publisher. it’s also the dream of writers who envision organizing themselves into publishing Houses, then networking the Houses into a large-scale Syndicate.

But for a writers’ Syndicate to perpetuate the e-book’s economic position as a commodity, sold or lent one at a time to readers as if it were a scarce resource, ignores the virtual reality of the e-book. It’s not scarce; it can be replicated again and again and again for no cost and without ever exhausting itself. The e-book is a post-commodity.

What’s needed is a means of covering the fixed costs of turning a manuscript into a book, because the individual e-book copies can be distributed freely to one and all. In short, the e-book industry would be replaced by an e-book utility.

Who then pays the writers and editors if copies of books are being freely distributed to readers?

Nobles and bishops aren’t in the habit of patronizing writers these days. Not many novel-writing grants are bestowed by governments or charitable foundations. University-level teachers of creative writing can presumably get paid enough to subsidize their own creative writing endeavors, but those gigs are few and far between.

What about libraries? The infrastructure is already in place: counting local branch facilities there are more than 16,000 public libraries in the US. Suppose a thousand libraries bought my book for $10 per copy: that’s $10K right there; I’d be fully patronized, not by a single government grant or a sugar daddy but by a thousand $10 grants. And the cardholders would benefit. Each of those thousand libraries, by purchasing its single copy of my book, would acquire the right to duplicate and distribute e-copies of it to any or all of its members, for no charge, with no returns and no waiting.

Why don’t libraries do this already? Because the publishing companies won’t let them. Publishers don’t embrace the role of the library as a public utility; instead, they regard the library as a loss leader, a means of stimulating reader demand that translates into more sales at the bookstore. Not only that, but publishers of e-books have figured out an angle for finagling even more money from libraries:

Not only is the individual library user’s access to the e-book time-limited – so is the library’s. In effect, the library rents e-books rather than buying them. After a certain number of people borrow the e-book, or after a predetermined interval of time has elapsed, the library’s right to loan out the e-book expires. The library then has to pay another fee to the publisher in order to renew its lender’s license for that book. Instead of letting readers take advantage of the cost-free duplication and distribution potential of e-books, the publishing industry turns book usage into a metered transaction – like buying gasoline at the pump. Instead of charging libraries less for e-books, the publishing industry ends up charging them more.

The libraries might welcome a return to the traditional arrangement of actually owning their e-book holdings rather than renting them. Still, the primary incentive for decommodifying e-books lies elsewhere:

In an era of shrinking government, public libraries face tight budgetary constraints. Even if the library could give away unlimited free copies of each and every book in its holdings, it would still have to pay for its own copy, which for budgetary purposes would cost the library no less than the book it lends out one patron at a time. The incentive to stock the virtual shelves of the giveaway public book utility lies not with the local government but with the local readers. All it would take is for one person to buy a copy of a book and donate it to the local library: then all of the other library members could download their own free copies.

The replicating library replaces both the lending library and the bookstore, letting readers obtain, for free and instantaneously, their own copies of any and all e-books in the library’s holdings. Readers might well go for this scheme. What about authors, who typically are paid $6,000 or less from sales of their published books, $600 or less from self-publishing?

In our imagined book utility an e-book is bought only by libraries, and only one copy per library. If every public library branch in the US bought a copy of a book, that’s 16 thousand copies total. At ten bucks a pop the book would generate $160K in aggregate revenues – not a windfall, but not bad either. Still, most books probably wouldn’t achieve such widespread societal distribution in the book utility model. Let’s say the average book is acquired by a quarter of the libraries: that’s 4 thousand copies and $40K revenue. The publishing industry would probably abandon ship, unable to generate enough return to compete with alternative opportunities available to investors.

But what if the writers owned and ran their own publishing companies? Eliminate the variable costs and the time lag entailed in turning books into commodities, eliminate the middlemen and investors, and most of that $40K per book goes to the writers. Now maybe the writer can earn a living wage. Then there’s the multiplier effect: each book purchased by a local library could be freely copied and distributed to a dozen readers, a hundred readers, a thousand… An e-book distributed widely and freely through local book utilities could attain a cultural cachet equivalent to or surpassing that of a bestseller even if no money changes hands. I’m guessing that a lot of writers would go for this arrangement, even if it meant abandoning the dream of making a fortune by writing industry-published bestsellers.


5 thoughts on “Decommodfying E-Books

  1. As a socialist, I’m completely on board with this concept. It’s where we should be, but we’re not yet there. Your idea is a “fiction” in the best sense of the word, something in the imagination that we wish to actualize. So, the questions I have all have to do with what we do in the meantime.

    Is there a realistic way to sell e-books to libraries?

    Have you attempted to do this with your Salon series?

    As a side note………..Last winter I was in New England, and I frequented the Curtis Memorial Library in Brunswick. They had a little sign that caught my eye. It was something to the effect of “Attention Authors!” There was a web address where writers could go to find out how they could get their work into the hands (or under the eyes of) library readers.

    In essence, the idea was to upload your work (for free) and hope that enough readers read it such that librarians would notice and then maybe libraries would start buying it. I don’t remember all the details, and I went back to search the website just now and couldn’t find the portal — but I remember thinking it was a bit of a rip off. After reading your post, here, though, maybe I was a bit hasty. I mean, it probably was a rip off for the indie writer, but still, maybe the Brunswick Library was going in the right direction.


  2. Good thoughts, Erdman. Public libraries already buy e-books and lend them out, so that’s not an obstacle. As I wrote in the post, publishers can make even more money from e-books than from hard copies by charging the library a fee for each time the e-book is loaned out, instead of simply letting the library loan out hard copies an unlimited number of times at no additional cost.

    It’s safe to say that the libraries acquire books only from traditional commercial publishing companies. That’s true of hard copies and of e-books alike. What’s needed if writers are going to form their own publishing houses is a process assuring that the quality of the books is at least as rigorous as that imposed by the commercial publishers. That’s the topic of subsequent posts and the third pamphlet.

    But public libraries aren’t operating solely as collective repositories of the best books available; they’re also trying to meet members’ demand. So the acquisitions people tend to buy books more copies of books that have already become bestsellers or that are likely to become so based on author track record. So in a sense the public library does act as a kind of accomplice to the commercial book industry.

    You and I have discussed previously the Maine library scheme. Again, I can see why they’d not want to spend money on books that haven’t been vetted by a publisher. But the premise as I remember reading about it before was that the author would give a free copy permanently to the library in hopes that readers would borrow it and then want to buy their own copies at the bookstore. The library is functioning as a sales agent rather than as a public utility in that arrangement. If that was a serious premise, then why don’t libraries tell the publishers to do the same thing: give the library a free copy in order to boost sales at the bookstore? Double standard.

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  3. Key relevant findings from <a href= recent study of library usage by the Pew Foundation:
    – Most adults have interacted with their local public library during the past year.
    – Most do so to borrow books and to browse/read books in the collection.
    – Younger adults are more regular library users than are older adults.
    – More highly educated adults are heavier library users.
    – Income is not correlated with library use.
    – Library use has remained stable over recent years.

    From a 2011 Pew study:

    78% of those ages 16 and older said they had read a book in the past year. We asked those book readers about their borrowing and buying habits. Among those who had read a book in the previous year, 48% say they had bought their most recent book; 24% borrowed it from a friend; 14% borrowed it from the library; and 13% got it another way. Among library card holders, a similar proportion (47%) say they had bought their most recent book, while 20% borrowed it from a friend, 20% borrowed it from the library, and 12% got it another way. Among those who read e-books, 41% of those who borrow e-books from libraries purchased their most recent e-book.

    We also asked book readers about their general preferences when it came to getting books. Fully 55% of the e-book readers who also had library cards said they preferred to buy their e-books and 36% said they preferred to borrow them from any source—friends or libraries. Some 46% of library card holders said they prefer to purchase print books they want to read and 45% said they preferred to borrow print books. When it comes to e-book borrowers, 33% say they generally prefer to buy e-books and 57% say they generally prefer to borrow them…

    Library card holders are more likely to own and use digital devices than those who don’t have cards. Card holders are more likely than others to be internet users (87% vs. 72%), more likely to own a cell phone (89% vs. 84%), and more likely to have a desktop or laptop computer (81% vs. 67%). And they are more likely than others to say they plan to purchase an e-reader or a tablet computer. Library card holders also report they read more books than non-holders. In the 12 months before our December survey, library card holders report that they read an average (the mean number) of 20 books, compared with 13 books for non-card holders. The median (midpoint) figures for books reportedly read are 10 by library card holders and 5 by non-holders.

    So public libraries remain a central resource for book readers, but even library users would rather own books than borrow them. So readers would likely be enthusiastic if their local libraries became a utility for members to download e-books to own rather than to borrow.

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  4. From this 2013 study of public library funding:

    -Per capita library expenditures were $37, nearly all of it coming from local taxes. Donations accounted for less than 10% of library revenues.

    – Two-thirds of the library’s budget goes to paying staff. Only about 11% of the budget went for adding books to the collection.

    So I’m not sure how likely it is that the library would allocate much if any of its acquisitions budget to a new source of books. It might be easier to build up a parallel library system relying on individuals acquiring copies of the books to be freely distributed. On the other hand, the library is a visible and well-used resource in most communities, so there would be advantages to working in collaboration with the public libraries, serving as an adjunct to their already-existing services rather than as another thing for them to spend their limited financial resources on.

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    1. That’s a lot of staff expenditures at public libraries. Librarians are middlemen too in the existing book distribution system. A lot of the work involves handling the borrowing-lending transactions and reshelving the books when they’re returned. Much of that work would go away if the libraries handled only e-books and gave them away rather than lending them out. An e-library utility could be maintained online with minimal staff, whose main tasks would be acquiring new books to the virtual collection, uploading them to the website, paying the publishing houses, maybe keeping track of and posting downloading data, doing maintenance and improvements on the website. Most of these tasks could be centralized. I’d guess maybe 15-20% of revenues for book acquisitions would go to maintaining the online duplicating library.

      So think about that $37 per capita cost of running a local library. There are 16K libraries in the US, with a total population of 320 million: 320M/16K = 20,000 citizens served by each local library on average. $37 x 20K = $740K average annual local library budget, of which nearly $500K goes to paying staff while $80K goes to acquiring new books. That’s pretty good: at $25/book that’s about 3,200 new books per year. But what if 80% of the budget went to book acquisitions: that would be nearly $600K, or 24,000 new books per year. And all of those books could be freely downloaded and kept to own by library members, with no returns, no waiting lists, no late fees, no staff handling all that busywork.

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