Wyden, Eshoo Press Big Five Publishers on Costly, Overly Restrictive E-Book Contracts with Libraries

Libraries report facing financial difficulties making e-books available to patrons under expensive, limited leases from publishing houses

Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., and U.S. Representative Anna G. Eshoo, D-Calif., today pressed the big five book publishing houses – Penguin Random House, Hachette, HarperCollins, Simon & Schuster and Macmillan – for answers regarding their contracts on e-books with libraries.

“E-books play a critical role in ensuring that libraries can fulfill their mission of providing broad and equitable access to information for all Americans, and it is imperative that libraries can continue their traditional lending functions as technology advances,” the members wrote.

E-books are typically offered by publishers under restrictive and expensive licensing agreements, unlike print books, which libraries only have to purchase once and lend as they see fit. E-books often have more constraints, from the number of times an e-book can be loaned to a time-limit on the license. The more flexibility in the agreement, the higher the price skyrockets, often at a much higher markup than what the average consumer pays for the same title.

“Many libraries face financial and practical challenges in making e-books available to their patrons, which jeopardizes their ability to fulfill their mission…. Under these arrangements, libraries are forced to rent books through very restrictive agreements that look like leases,” the members continued.

The exorbitant costs and burdensome restrictions of these e-book contracts are draining resources from many local libraries, forcing them to make difficult choices to try and provide a consistent level of service and get books – print or electronic copies – in the hands of their patrons. However, with e-book contracts eating up ever larger portions of libraries’ budgets, the same level of service appears untenable. Wyden, whose mother worked as a librarian, understands that local libraries are the cornerstone of communities large and small, providing a hub of literacy and community-building resources to every American.

Wyden and Eshoo requested answers to the following questions by October 7:

For sales of physical books to academic and public libraries, please describe any restrictions you place on the sale related to potential exercise of copyright limitations and exceptions available to schools and libraries.

For each year from 2018 to 2020, what was your total revenue for the sales of physical books to academic libraries and to public libraries, respectively?
For each year from 2018 to 2020, what was the total number of physical books sold to academic libraries and to public libraries, respectively?

For the licensing of e-books to academic and public libraries, please describe any restrictions you place on the license related to copyright limitations and exceptions available to schools and libraries.

For each year from 2018 to 2020, what was your total revenue for the licensing of e-books to academic libraries and to public libraries, respectively?
For each year from 2018 to 2020, what was the total number of e-book licenses sold to academic libraries and to public libraries, respectively?

Please provide copies of your standard e-book licensing agreements for academic libraries, public libraries, and consumers, and please answer the following questions:

Do you offer perpetual e-book licenses to academic libraries, public libraries, or consumers? If so, under what terms and conditions?
Do you offer sales of e-book files (with print-like rights of ownership, instead of licenses) to academic libraries, public libraries, or consumers?

Please summarize the lending restrictions included in your standard e-book licenses for both academic and public libraries, including:

the number of times and amount of time you allow an e-book to be loaned; and
the legal or technical restrictions you place on each loan.

Please summarize the standard e-book licensing terms, for both academic and public libraries, regarding your access to library data, including:

what reporting requirements are placed on libraries for acquiring these e-books;
whether you have any access to the lending logs of the e-books, including tracking any personal information associated with patrons and check-outs; and
what other data you have access to, including uses of the work (e.g., highlighting, notes, or annotations) and patrons’ data.

During COVID-19-related shutdowns, did you create any new licensing or permission regimes (e.g., permission to read aloud) for some or all of your e-book offerings? If so, please describe the nature of the works covered by the change and the extent of the changes.

Please describe any legal actions—including cease and desist letters, threat of lawsuit, actual lawsuits, or imposition of restrictive licensing terms—you have taken since 2016 in response to the following activities:

multiple checkouts of digital texts;
interlibrary loan;
controlled digital lending;
libraries making copies of owned works to lend digitally on a one-for-one basis;
schools making available electronic copies of books they physically own to students during the pandemic; and
e-reserves.

For each of your 100 most sold or licensed works to libraries in 2020, please provide the following data from 2020:

the average price of a physical copy of the work sold to libraries;
the average price of a physical copy of the work sold to consumers;
the average price of an e-book license to an academic library and the average number of loans permitted;
the average price of an e-book license to a public library and the average number of loans permitted;
the average price of an e-book license to consumers;
the profit margins for the sale of a physical copy of the book to consumers and to libraries;
the profit margins for the license of an electronic copy of the book to consumers and to libraries;
whether you allow libraries to purchase (rather than license) a digital copy of a book, and if so, at what average price.

For each of your 100 most sold or licensed works over the period of 2015 to 2019, please provide all the information requested in question 8 above, along with the year-over-year changes in the average sales price of a physical copy and the average licensing rate for a digital copy to consumers and to academic and public libraries.

A copy of the letter to Penguin Random House is here, Hachette is here, HarperCollins is here, Simon & Schuster is here and Macmillan is here.

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