HarperCollins generated a lot of controversy and debate with its new pricing model for e-books capping usage. In this week’s issue of PW, Connecticut librarian Kate Sheehan weighs in on the issue, and in PW Daily today we offer another piece by NYPL’s Christopher Platt, who takes a slighter different tack.

The Happy Reader Equation

Recently, HarperCollins announced a new pricing model for e-books that caps usage, after which it would require a library relicense the title again for another set of uses. They further clarified that by mimicking the hardcover-to-paperback replacement purchase model, the price of the title would come down as it ages.

It has been a momentous few years for publishers and libraries. The economic downturn hit publishers hard, forcing cost-cutting, downsizing, and a review of business models. During all of this, the rapid advance of e-reading became the bright spot on publishers’ balance sheets, and now they are focusing intensely on ways to provide interesting content, engage new readers, and generate revenue in that arena.

Libraries were hit hard too, many of us enduring major fiscal challenges that strained our resources in the face of skyrocketing use. Libraries have downsized, cut back spending and services, and in some cases even closed during a time when their communities needed them the most. For many librarians, the announcement of e-book use limits from a major publisher must have felt like yet another in a long line of punches to the gut.

HarperCollins is a publisher that has worked hard to build up a great track record supporting libraries, and I know they are a team of dedicated individuals who recognize the value we bring to the table. They, like many of us, are tasked with the difficult job of revising long-held models to stay profitable and relevant. As content and demand have grown in the e-book retail market, publishers have been revising e-book pricing models, and it’s no surprise they are now looking at the library market. I know the other trade houses are watching with great interest, and I applaud HarperCollins for being courageous enough to make the first move. This call for understanding is directed to all trade publishers and my respected library colleagues.

Librarians: public libraries are valued institutions. Remember that we are just one portion of the formula that gets titles to readers, and the only step that is not-for-profit:

Author + Publisher + Wholesaler + Library = Happy Reader

We regularly educate publishers on our role in this equation: connecting books to individuals in meaningful ways that often surpass efforts made by bookstores or publishers themselves. The number of libraries nationwide and escalating library use indicate we have extremely effective market penetration and are highly valued by our users.

As reading goes online, publishers are also interested in connecting directly to users. If you’ve been monitoring current digital publishing conferences, you’ve seen that they are swapping ideas on how to reach out to, engage with, interact among, and lock in individual users. I sat in on a YA session at Digital Book World that suggested doing many things my library does already: create engaging environments that get teens interacting together, creating new content, and providing focus-group level feedback to the publishers. They understand the power and opportunities of social networking and are actively looking to create enticing online spaces for consumers to become involved in, especially as physical stores close, lessening the “showroom” opportunity for them to display their wares. In other words, many publishers are actively developing the means to do what we do already.

Publishers: Libraries excel at engaging and building the readers you want. Promoting literacy and developing life-long reading habits are central to our service models. Through our buildings, our online presence, our extensive and creative programming, we expose and connect your content to readers. Recognize and leverage that value. Work with us to develop engaging interactive online environments to connect to people and gain valuable feedback. It’s the author tour of the future, writ large, with significant return on investment opportunity for you.

Librarians: Use the opportunity before us to better understand how the publishing supply chain works. Knowing how rights, digital publishing, digital production, and marketing work will better illustrate publishers’ needs. Technology is moving faster than the speed of light and publishers are trying very hard to keep up. Publishing an e-book is immensely complicated and requires a very different skill set than creating a printed work, from authoring and editing to packaging and delivery.

Publishers: As evidenced by the recent Associated Press and Wall Street Journal articles on checking out e-books from libraries, we know that many of our e-users have a higher expectation that their needs will be met immediately, despite having a holds queue system that mimics the print model. The notion that they may have to wait in line for a physical copy and then go to a library to get it is one that they may grumble about, but they accept. They understand that 26 people cannot read the same print copy of The Girl With the Dragon Tattoo at the same time.

Many do not bring that same understanding to the e-book version. They know it is a digital file copied to their device and because there is no return mechanism, they know the digital copy is not then traveling back to the library at the end of the loan period to then travel onto the next patron’s device. Rather it is sitting on their device until it times out and becomes useless digital dust. Therefore, the notion that they have to wait in line for their copy does not make inherent sense. They do not understand the reasoning behind publisher restrictions, nor should we expect them to, especially if those restrictions vary from publisher to publisher.

I propose that implementing a use limit is de facto admitting that we would be paying per use. Given that digital is different from print, we could provide that use simultaneously and better satisfy the patrons’ experience getting your title, target our materials budgets more responsibly, and in many cases likely increase the number of copies we would acquire, thereby increasing your sales. By removing the patrons from an arbitrary wait on a holds queue, we could get them onto your next title that much quicker. Happy readers using our collections heavily drive us to put more money in our materials budgets. Simultaneous loans may make a use limit scenario more palatable to libraries.

I also propose that if this structure is going to remain, that flexibility be built in to accommodate the different categories of material (children’s vs. adult, bestsellers vs. practical nonfiction, accommodation for in-house use, etc.). Reach out to talk to a variety of types of librarians to best understand the implications and needs. A single use limit number will not fit all.

But on an even more fundamental level, I suggest you as publishers will have difficult decisions to make on the future of the repurchase model, period. There is valid reasoning behind lowering the price over time, but if you’re trying to preserve a revenue stream rooted in the hardcover-to-paperback repurchase process, you’re basically asking libraries to foot the bill for a process unnecessary with e-books. When we pay for a mass market paperback reprint we know we’re paying for editorial effort and paper and ink and production work. When the relicensing of the e-book just gets us access to the same file we had before, it’s not immediately apparent to us what that revenue supports. If it really is just about continued access, then let’s also look at subscription models that the wholesalers could package on your behalf and would be easier managed by libraries.

Librarians and publishers: Rome wasn’t built in a day. Let’s continue this productive conversation in meaningful, articulate ways at conferences, on webinars, in focus groups, and online. Let’s develop realistic pricing models that preserve publishers’ ability to show a profit and fund new content while still allowing libraries to provide unfettered access within our materials budgets. Above all, let’s try to make it consistent from publisher to publisher so libraries can effectively carry out the already complicated task of collection management and we don’t confuse our readers. Connecting people to good books is the reason many of us got into this game to begin with. We each have a role in the Happy Reader equation that can and should last well into the future.

Christopher Platt is director, collections and circulation operations at the New York Public Library.