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E-book battle: Libraries, publishers square off on pricing

E-book publishers are worried about profits shrinking if libraries go digital, and they're hiking e-book prices. Stretched thin by lean budgets, libraries are slow to embrace digital content. Can the two sides reach a solution?

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Publishers have said little about their specific fears or strategies as they experiment in the library marketplace. They acknowledge libraries serve a public good, but insist they can't simply sell e-books in accordance with old models.

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"The library e-book and the lending privileges it allows enable many more readers to enjoy that copy than a typical consumer copy," says Random House spokesman Stuart Applebaum in an e-mail. "Therefore, Random House believes it has greater value, and should be priced accordingly."

Random House raised e-book prices for libraries on March 1 and has since dropped prices on select titles.

Last year, HarperCollins sparked an outcry and inspired a boycott of its books when it announced that e-books sold to libraries would expire after being loaned out 26 times. E-books from Simon & Schuster have become unavailable to libraries. Penguin offers only its backlist, not new releases, of e-books to libraries. Hachette Book Group plans to start piloting an e-book program for libraries but didn't share details.

Of course, libraries have always given readers free access to books that publishers would like to sell, so the dynamics aren't entirely new. Distributors program e-books to be read by just one patron at a time and expire two or three weeks after the checkout date. Hence patrons who don't want to wait might still have an incentive to buy a copy. "Some libraries have a 'buy it now' button for people who don't want to wait," says Molly Raphael, president of the American Library Association (ALA). "So we're doing a whole lot, frankly, to drive people to buy."

But publishers worry that libraries might disrupt sales on new releases, just as publishers are trying desperately to adjust and stay profitable while protecting e-books from piracy.

"Some publishers are not seeing a lot of results in sales of e-books to make up for their huge investments" in digital publishing, says Sue Polanka, head of reference and instruction for Wright State University libraries and editor of "No Shelf Required: E-Books in Libraries." "They are very nervous and uncertain about what the future might bring, and so they're being very cautious."

Libraries' acquisitions accounted for 4.8 percent of all book sales in 2009, based on the latest available figures from the Book Industry Study Group and the ALA. E-book receipts grew from less than 4 percent of all book sales in 2009 to nearly 6 percent in 2010.

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