eLending & eBook update - November 2016
With the Court of Justice of the European Union’s eBook judgement, it is a good time for a round up of eBook and eLending news.
The below also contains updates on the Simon and Schuster eBook royalty case, eBooks and tax, the economics of electronic publishing, eBooks and education, the ongoing saga of the merger of the International Digital Publishing Forum with the World Wide Web Consortium, eBooks and open access, geoblocking, and piracy, as well as links to pieces on libraries and electronic media in general, digital ownership, a move to give authors more possibilities to get their work published electronically, and a roundup of markets news.
The CJEU Judgement
I attach a longer summary of the judgement, but the core is that the one-copy-one-user model does fall under the exception to the public lending right in Article 6(1) of the Rental and Lending Directive, but that it is possible to oblige libraries only to buy copies of books that have legally been put into circulation.
There are many remaining questions in the judgement, some raised in the attachment. Your comments are more than welcome, as we should aim for some sort of guidance for libraries around the world on how they can use the CJEU judgement to support their own causes. Volunteers to help work on this are welcome, and we can link up with EBLIDA, which is already working on materials for EU libraries and library associations.
In terms of reactions, in France there is a concern, among editors, that the existing Library eLending scheme (Pret Numérique en Bibliothèque) will either become redundant or be seriously reduced. This is seen as a negative by publishers, but à priori as a positive by librarians who were no fans of its licensing schemes. The article helpfully notes the inconsistency between publisher positions on VAT on eBooks and eLending.
Meanwhile, the Dutch Royal Library has engaged to follow up on the decision as soon as possible in order to maximise access to books without doing a disservice to authors. It suggests that it will continue to promote eLending as it is, but also look at how to establish one-copy-one-user lending for books which haven’t yet been made available to libraries.
The UK Society of Authors has welcomed the judgement, suggesting that it offers it a mandate to claim PLR for remote lending of eBooks. This may be included in the Digital Economy Bill, currently being discussed in Parliament, if the Society of Authors and the Authors’ Licensing and Collecting Society gets its way.
The last update noted a case brought against Simon and Schuster about royalties paid to authors, arguing that the publisher had paid the (lower) sales rate, rather than the (higher) licensing rate, despite having licensed the author’s book. The case has been dropped, as the publishing division in question had since been sold to John Wiley and Son, but will likely shortly be relaunched.
eBooks and Tax
The EU seems to be advancing rapidly towards harmonising VAT for eBooks with that for physical books. The publishing industry has long argued for this, and the Commissioner for Financial Affairs has indicated that a decision is likely shortly. In parallel, a CJEU case brought by the Polish Constitutional Court has seen an opinion from the Advocate General arguing that in fact, there is no need to have the same rate for books as for eBooks, given that eBooks do not have the same role in promoting culture.
The International Publishers’ Association and Federation of European Publishers have brought out their annual survey of VAT on eBooks, as part of an ongoing campaign to exclude books in general from VAT. It argues that book sales in general are highly sensitive to price (and so VAT increases), and that given the nature of books, they shouldn’t be taxed anyway.
The Economics of Electronic Publishing
The Journal of Electronic Publishing has dedicated an issue to the economics of electronic publishing, focusing in particular on the methodology for calculating the cost side of the equation. There is this critique of the approach on the Scholarly Kitchen, arguing that publishing is about much more than simple production, and so justifying much higher figures on the ‘cost’ side, but also commenting on differences between journals’ approaches as concerns level of editorial investment.
eBooks in Education
There are signs of greater coordination by university libraries in the UK on eBook purchasing, in order to get better deals from publishers. This proposal for a ‘charter’ suggests as principles that eBook licences should be perpetual, cover every stage in the chain, price, access and usability, and the need for access to archives and not to lose content previously made available.
Elsewhere too, there are efforts to study university library purchasing in more depth at a time of flatlining eBook sales. Meanwhile, eReference sales are rising. The article contains interesting statistics on trends and sales models over the last few years.
Data from the US show a fall of 12% in the amount the average US student spends on textbooks every year, with use of lower cost electronic materials at cause. In response, David E. Anderson, Executive Director of Higher Education, Association of American Publishers, said “These surveys confirm that the shift to lower cost digital course materials is clearly benefitting students. Students are savvy consumers, so when presented with lower cost digital textbooks, digital discount programs and varied rental options for both print and digital course materials they can save on college expenses”.
There is a similar finding from recent (commercial) survey work, which suggests that digital learning materials are gaining ground in the higher education sector, although take-up remains uneven. While use of digital devices in class is more widespread than use of eTextbooks, 61% of students do use them, with two thirds getting them by borrowing from the library. There is, however, no evidence on trends, at least in this story.
EPUB vs IDPF
There is a further update on progress towards the merger of the IDPF and World Wide Web Consortium. This appears to have attracted a lot of interest within the publishing community, with the IDPF planning to release a response to comments received, and suggestions about where to go next by early September.
The CEO of Overdrive had warned strongly about the loss of influence and consideration (and higher membership fees for some) for the publishing industry, while this blog suggested that the situation is not so dramatic, and indeed that without greater collaboration, an alternative to EPUB could be developed that would add complexity and risk making EPUB redundant in the end.
Following the decision by 88% of the members of IDPF to accept the merger, L’Actualitté carried a piece noting the positives (overcoming a tendency by IDPF to operate in isolation from broader trends, greater compatibility with browsers, opening up new avenues for offline consultation of websites), and suggesting that things could be finalised in January.
eBooks and Open Access
A blogpost from the Scholarly Kitchen offers an interview with Wendy Queen, the head of Project MUSE, a platform for open access academic monographs. This aims to improve the usability of OA eBooks, with publishers making the platform a one-off payment in order to host and make the work available. With funding from the Andrew W. Mellon Foundation, Project MUSE’s stated aim is to drive innovation in the way that the content of monographs is presented and made accessible.
eBooks and Geoblocking
Despite general French favouring of geo-blocking, this piece suggests that there are Senators and Deputies who see overcoming this as a means of helping promote French culture abroad.
A short piece on Slate underlines that increasingly, the digital version of a book, song or film will cost more than the physical version, despite the fact that buying digital implies that you do not own the work. It suggests, nonetheless, that this is a demand issue, with convenience and trust now higher for digital products, justifying the higher price (although still making the point that while people are less likely to display DVDs now, they still want to show off their physical book collection). A subsequent piece looked at the same theme, arguing that increasingly while we own the hardware, someone else owns the software, reducing the value of the hardware in itself.
Libraries and Electronic Media in General
There have been a series of articles on Mediashift about libraries and media, including one particularly interesting one about archiving and privacy, exploring a distinction between ‘available’ and ‘visible’ knowledge, with the internet making things much more visible, if not more available.
eBooks and piracy
A Spaniard has been arrested and fined for pirating and making money by making over 10 000 eBooks available online. This article, from Actualitté, offers worrying figures about the numbers of people ready to use pirated goods, suggesting that the virtual format of eBooks itself means that people feel less guilty about downloading illegal copies.
At the same time, there is also concern about the way that DRM is used to divide markets, and block interoperability. This article (also from Actualitté) suggests that watermarking could be a more proportionate approach.
Right to ePublish
At the beginning of December, French authors will have the right to withdraw rights signed over to publishers to produce eBooks, if the publisher does not respond to a request. The idea is to encourage the publication of eBooks, faced with some reticence from publishers to do so given costs. This is echoed by a further piece based on KPMG research that underlines that publishing houses have tended to be cautious about entering into the eBook market. There is a similar conclusion from research into Caribbean publishers’ behaviour.
eBooks, Libraries and Self-Publishing
An interesting little piece from the perspective of a self-published author, celebrating libraries as a potential source both of revenue, and discovery. The emphasis on eLending being a win-win for those outside of the established publishing houses is an interesting one. This piece from a librarian offers a different perspective, suggesting that efforts to sell self-published eBooks to libraries with significant mark-ups is a non-starter.
eBooks continue to account for major parts of the falling revenues of publishers. PRH saw declines in the US and UK, compensated by rising print revenues to some extent, although blamed this on new digital terms of sale rather than to anything else. This comment piece suggests, however, that publishers are driving up the costs of eBooks in order to drive people into print, where they get to keep most of the profits, rather than giving them to Amazon. Digital Book World offers some advice, while a further (longer) comment piece offers a more in-depth look at the issues around eBook pricing, and how these relate to physical book pricing.
Meanwhile in the UK, competition to Amazon is falling away, with supermarket chain Sainsbury’s leaving the market. This follows the withdrawal of Tesco and Nook as well, while Amazon enjoys a 90% market share. In France, two reports have painted very different pictures of the book market, with the national publishing union claiming a small rise in revenues 2014-15 while PwC has suggested there was a fall. Indeed, PwC forecasts gently decline to 2020, but underlines that digital books are likely to be a growth area.
Turkey has seen a rapid growth in eBook sales, from 0.7% of total book sales in 2014 to 5% in 2015. There is now a catalogue of 15000 books in Turkish online. However, piracy remains a problem, as well as publishers’ own ability to collect and publish data.
There is also an ongoing anti-trust case against Amazon in Europe, based on the charge that it obliges publishers to reveal deals of its eBook distribution contracts with other companies. Amazon is aiming to settle this before judgement.
Last update: 18 April 2017