In a 90-minute "Ask Me Anything" session, Macmillan CEO John Sargent met with librarians at the ALA Midwinter Meeting to hear feedback and to defend the publisher's controversial eight-week embargo on new release e-books in libraries. And despite palpable tension in the room, there was little news, no real surprises, and the meeting came off pretty much as expected.
Among the few newsworthy moments, Sargent told librarians that it was too early to tell whether the embargo, which took effect on November 1, was serving its function. “It’s been exactly what we predicted—you have this horrific drop in sales because we’re not making [new titles] available,” he said, adding that it would probably take another "two or three months" to better assess the program.
With no presentation, notes, or slides, Sargent opened the session by briefly recapping the publisher’s previously stated rationale for pursuing the embargo. In essence, Sargent explained, Macmillan executives are concerned that the rapid growth of library e-book lending is creating an “imbalance in the publishing ecosystem,” not unlike the growth curve Amazon created when it first launched the Kindle and priced new release e-books at $9.99. That "imbalance" eventually led publishers in 2010 to take control of consumer e-book pricing by switching to the agency model for e-books, he noted—and, led to five of the then Big Six publishers, including Macmillan, being sued with Apple for price-fixing.
In his talk, Sargent insisted the embargo wasn’t designed to “punish” libraries, but was an honest effort to correct what he sees as a troubling, emerging imbalance in the digital marketplace. To restore balance, Sargent told librarians, the publisher had basically two “levers” at its disposal: pricing, and availability. With library e-book prices already high, Sargent said Macmillan executives “did some math” and concluded that tweaking the availability lever seemed worth a shot.
Librarians and library supporters, of course, have strongly disagreed with that choice. And in the opening minutes of the session, Sargent acknowledged the resistance. "You don’t like the availability solution,” Sargent said. “But, on the other hand you don’t like the price solution, either.”
Later in the talk, Sargent told librarians that Macmillan would not be reversing the embargo at this stage. "We've gone down this path," he said. "We will gather information and at some point will sit down and will try to make some good decisions." But, Sargent did not rule out changes in the future.
“This is a complex ecosystem. What we are trying to do is use the levers we have available to try to figure out an answer,” Sargent said. “We tried something. It’s clear that the library community did not like what we tried. I still think there’s value in it. But, is it the right thing to do? I don’t know. We might look at having two models. You can buy it from this model, or you can buy it from that model. We are not saying we are going to do this forever. We are trying to find a way to fix an issue that we all have.”
What About the Data?
But what, exactly, is the issue? A number of librarians at the session pressed Sargent to more fully detail—and share—the data from which he is drawing his conclusions. For example, Sargent’s contention in the session that 55% of Macmillan’s digital “reads” in the U.S., on any device or platform, are coming from libraries. (Note: in the July 2019 memo announcing the embargo Sargent put this number at 45%).
In a somewhat newsworthy moment, Sargent confirmed for librarians what many have assumed all along: that Amazon data is a key part of the mix. “The people who have the largest amount of data in the ecosystem is Amazon. They are the only player that has both sides of the data,” Sargent explained, noting that the Kindle is the largest reading platform not only in terms of retail e-books, but libraries as well, through its partnership with OverDrive.
And, Sargent made clear that librarians are not going to see the data backing up his claims. “All the data [Amazon] has on our books and all the data they share with us is under extremely strict nondisclosure agreements,” Sargent said, adding that all the data Amazon is "willing to share with us is determined only by them.” Nondisclosure agreements also prohibit sharing OverDrive data, Sargent said, another key source.
That answer visibly frustrated many in attendance. "But it's our data," one librarian protested. "They're getting it from us."
Guy Gonzalez, who now directs the OverDrive-funded Panorama project, pointed out that the data being put forth by Macmillan is contested by vendors and librarians, and asked how Macmillan expects to get librarians or other stakeholders on board with without common data points?
This led to one of a few moments of mild drama from the session, as Hillsboro (Oregon) Public Library director Stephanie Chase politely, but firmly, rebuked Sargent for nearly two minutes.
“I think some of what is so hard is that there are many people in this room who were part of these conversations with you 15 years ago, 10 years ago. And what I hear is that you still view us as a problem,” Chase said. “Until you see us as part of your ecosystem, and not a problem in your ecosystem, I think we’re not going to get anywhere. And that’s why it remains so difficult to have these conversations with Macmillan, and why you see so many librarians so willing to say, you know what, hands up. I would just say, on behalf of the people in this room, it’s been really hard to listen to you kind of explain to us our work in a way that is not fundamentally correct.” The room applauded in agreement.
In response, Sargent offered a sincere apology.
“I was told that same thing last night, and in no uncertain terms, that my language is sometimes not good,” Sargent said. “What I see is an ecosystem unbalanced, and it worries me about the future of the book. That’s what worries me. And I think that is a library worry. I think that’s a retailer worry. I think that’s an author worry. I think it’s an ecosystem-wide worry. And I apologize if I’m giving you the impression that I think this great institution, that’s fundamental to the United States, the library, is a problem. I apologize. I don’t mean it to be that way.”
Another big worry, Sargent explained, is his concern that the "continued marketing" of free, including from libraries, is training consumers to stop paying for books. Sargent acknowledged that libraries pay hefty prices for time-limited e-books. But he expressed concern that, to the end user, the book is still free.
"The shorter the waiting lists get, the more patrons are going to say 'I love this free e-book reading,' and we are already seeing significant numbers of people saying I’m going to switch from print to e-books because I can get them all for free," Sargent said, citing new and developing apps and browser extensions that he claims are helping to spike library e-book lends.
So, if libraries are not the problem, one librarian asked, what is?
"The biggest problem we see is actually the incredible increase in circulation, and how and where it comes from," Sargent said. "We see policies put in place where library cards are extremely easy to get and many people can get many library cards. We see policies where libraries are willing to, for $10, to sell library cards around the world. We see apps and technology that is developed extremely quickly, as they always are, with the sole intent of moving people from a purchase to a lend. And that causes this great acceleration."
Sargent said it wasn't the "actual baseline" number of people libraries reach and circulate to in their communities that has him alarmed, but the "explosive" growth curve driven by these various forces.
"If you are in the state of California, you can easily own a library card for every library in the state of California, and when a book comes out that you want, you can put your name on every wait list in every county, and there are apps being developed to make that easier to do, and so that drives up the number of lends for every book in every library and that causes the amount of money per reader reading a book to go down. And that is the change that we worry about."
Librarians were quick to respond. "One of the things we say in libraries is don't make a policy based on the worst case scenario, and that's what that sounds like to me," one librarian said. "Sure, those things happen, but that's not the vast majority of our users."
"It is not," Sargent agreed. "But what we see is a tremendous increase in it."
Equity of Access
The library community's opposition to the embargo, of course, is directly connected to a core library value: equity of access. And throughout the session, librarians questioned whether Sargent understood the burden Macmillan's embargo places on librarians and on public library users.
Sargent insisted he did understand.
"Look, we have windowed stuff forever. It's the hardcover and the paperback," he said. "We could do that, we could take this model that we have and change it entirely. We could say instead we’re not going to make the books unavailable to you, but we’re going to make a tough decision for you. Do I want to buy the book here, or do I want to wait just eight weeks and buy it here. We thought the issue for you—and we may be wrong, and I’d love it if if we were wrong—the issue for you is that your patron would still want that book, and you'd have this big price tag and then he's pounding the table in your library saying 'I need you to buy that book' and then you'd be saying, oh god, what is that going to do to my budget?"
One librarian quickly shot down the comparison of e-books to hardcover vs. paperback (hardcovers and cheaper paperbacks are generally not published simultaneously; e-books are first run publications), adding that not letting libraries license digital copies for books that are available to consumers is unfair to digital readers who will never be able to afford to buy a book, or can't use print, or get to a physical library.
"I agree," Sargent said. "And this is something I've been adamant about, and actually we were talking about the other night. I have always been adamant about, if we can find a way to address that issue, right, the disadvantaged people who cannot afford to pay, if we can find a way to address that..."
"They're called libraries!" a librarian shouted, pointing out that the issue is not finding a way to serve the disadvantaged—the core library value of equitable of access is about serving all. "Public libraries are meant to be the great equalizer in our society. Benjamin Franklin and all of the great founders of our society thought that this was important. And now you’re limiting access because you want people to buy it?"
The exchange made clear a theme that persisted throughout the session: Macmillan should have more deeply engaged librarians about the problems they saw, and the models they were considering.
Sargent resisted that contention. "We talked to what we thought was a representative sample of libraries, and the library associations," he said. "We went on a listening tour at [the ALA 2019 Midwinter Meeting in Seattle] and got a ton of feedback." However, Sargent said the librarians Macmillan consulted would continually ask for cheaper e-book prices, and perpetual access. "What we got to was, in the end, I don’t know, call it an impasse."
If there was one positive to come out of the session, meanwhile, it is that the lines of communication between the library community and the publisher now appear to be engaged. During the session, Sargent agreed to pull in a wider array of library associations in ongoing discussions, rather a sampling of individual libraries.
"Let us help you come up with a model," one librarian at the session implored. "We have really smart people in this room."
"That's why I'm here," Sargent replied.
Another moment of mild drama came at the end of the session. With Sargent still in the room, ALA put out a press release. “Today, Mr. Sargent invited conference attendees to ask him anything. He talked, and stakeholders from the library community asked questions and engaged. Unfortunately, he has not been listening to us," the release stated. “We see only one acceptable outcome for this situation: Macmillan must lift the embargo." As the session broke up, Sargent clearly did not appreciate the release.
Nevertheless, while "probably unsatisfying to both sides" said Columbus (Ohio) library director Pat Losinski, the session was useful. Not only did librarians get a better sense of what was motivating Macmillan to explore this change, librarians now have a better sense of what's happening in the market. Many librarians PW talked to said they shared the blame for not engaging the e-book issue with publishers more forcefully in the last few years. And librarians now recognize the broader challenge librarians face: Amazon.
And, as Texas State librarian Mark Smith noted at the end of the session, the embargo also presents an opportunity for librarians to think more deeply and creatively about the library's role in the marketplace.
"Why should librarians rush to develop a new model, to work with you, until we know also what the results of your experiment is going to be? Especially since we don’t see other publishers joining you at this point," Smith asked Sargent, toward the end of the session. "There’s a world of material in libraries besides Big Five content that is pushed by celebrity influencers. I just think that maybe the library community might take this opportunity to see, one, what influence libraries really have in the marketplace, and two what other options we have to provide reading material to our customers."