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Macmillan Announces New Library Lending Terms for Ebooks

Update (9/17/2019)

The Authors Guild’s post (below) about Macmillan’s new library ebook license terms has caused some consternation. We apologize for that and want to clarify our position.

To be clear, the Authors Guild loves libraries. What author doesn’t? We grew up reading in them, we use them for research and workspace, we speak to readers at libraries, and libraries introduce new readers to our work. We applaud the immensely important role that libraries play in our society.

But we also love writers, and our mission is to support them and their ability to earn a fair wage. Without a doubt, we need more verifiable data on library e-lending, but what we have seen so far suggests that the easier it is for readers to find free ebooks—through any source—the more publishers’ revenues and authors’ incomes decline. We’ve heard several publishers express concerns over revenue loss from library e-lending, and we’ve seen 4 of the Big 5 publishers recently change their library licensing terms to try to adapt. And with author earnings down to new lows, we cannot tolerate more losses.

Based on our latest Author Income Survey, the median salary for today’s full-time book author is just $20,300 (and the median income for all traditionally published and self-published authors is only a measly $6,080), far below the poverty line in New York and dozens of other states. And the median income keeps falling, down 42% in the past decade. Authors need money to live on while they write, or they don’t write as much or as well or at all, and declining incomes are pushing more authors out of writing. Roughly 25% of all published authors and 18% of full-time authors earned $0 in book-related income in 2017. Literary fiction writers’ incomes have fallen the most, down 27% in just five years, followed by general nonfiction (down 8%), raising serious concerns about the future of our literary heritage—of books that teach, inspire, and make us think and empathize.

As James Gleick, the Authors Guild’s past president, has said,“When you impoverish a nation’s authors, you impoverish its readers.”

A wide variety of factors conspire to reduce authors’ incomes today, and the Guild’s current advocacy efforts are focused on fighting back. Among our legislative priorities are the creation of a small copyright claims tribunal so writers have a shot at enforcing their rights, collective licensing for out-of-print books so those who want to use them do not have to rely on fair use, clarifying the eligibility requirements for the copyright safe harbors for online platforms to create more accountability for those platforms that benefit from rampant piracy, the creation of a federally funded public lending right, and more federal support for the literary arts, as well as increased library funding so that libraries can buy more books and better serve their communities. We’re also rolling out our new model contract in the coming weeks and demanding publishers cease excessive use of deep discounts and special sales and that they do their part to keep new books off of reseller markets by marking them.

The central question it seems that we all should be asking is “how can we ensure that authors can afford to keep writing?” Compared to the author-income crisis at hand, we did not think that having to wait eight weeks for a library ebook was an unreasonable compromise, especially when print copies are available for borrowing. But we hear those who disagree, and understand that there are people who might need immediate ebook access and that windowing might create a backlog in the queues.

The Guild will continue to support efforts that bring writers, publishers, and libraries together to explore new business models for library lending. It is still a relatively young market, and we saw Macmillan’s new model as another experiment that will provide more feedback on what works. No one model is perfect, and the latest reconfigurations will need to be tweaked over time as markets continue to evolve.

We also want to further the discussion on other mechanisms to bring income back into authors’ pockets. For example, in the U.K., Europe, Canada, and other jurisdictions, authors receive micro-royalties from a national government fund when their printed books and ebooks are loaned at public libraries. The U.S. failed decades ago to set up such a system, but the Guild is starting to lobby again to fix that.

It is in the interest of everyone—readers, libraries, publishers, and authors alike—to make sure that authors can afford to write and publish. In the meantime, we are trying to obtain any relevant data on the e-lending issue and will continue to review our position as the situation progresses. We greatly appreciate members’ and other authors’ feedback.

Original Post:
Macmillan Announces New Library Lending Terms for Ebooks

In response to the well-recognized impact of library e-lending on book sales, Macmillan Publishers is now changing the terms on which it sells ebooks to libraries. Since readers are able to borrow ebooks from libraries around the country (and in some cases, around the world), book sales—and authors’ royalties—have fallen. Last year, Macmillan tested a “windowing” system by which frontlist books weren’t made available for library e-lending until 16 weeks after the book’s release. It is now adopting a new system to protect the value of new releases while still respecting and supporting the needs of libraries.

Under its new system, Macmillan will make one copy of an ebook available upon that book’s release to each library system in perpetuity, at the half-price rate of $30 for that one copy. According to Macmillan, “this change reflects the library request for lower prices and perpetual access.” Libraries may obtain additional ebook copies of that title eight weeks after publication, for a period of two years (or 52 lends) at the cost of $60 per license; these licenses can then be renewed for additional two-year (or 52-lend) periods. This new system will only apply to ebooks, and libraries will still be able to order as many physical books as they like.

The Authors Guild welcomes this approach and thinks it is a reasonable compromise between the needs of the authors and the needs of the libraries. Although the American Library Association has objected to this new program, we believe that Macmillan has attempted to fairly address the concerns of the libraries and balance them with those of authors and others in the book industry. If, as Macmillan has determined, 45% of ebook reads are occurring through libraries and that percentage is only growing, it means that we are training readers to read ebooks for free through libraries instead of buying them. With author earnings down to new lows, we cannot tolerate ever-decreasing book sales that result in even lower author earnings. Macmillan’s new licensing scheme will still allow libraries to obtain a digital copy of new books in the first eight weeks, so readers who can’t afford to buy books and who can’t get to the library to take out print copies should not be impacted. We look forward to seeing how this new program affects readership—and ultimately, authors’ royalties.