Penguin Random House Unifies Library eBook Terms

03.12.2015 Nate Hoffelder 2 Comments

Over the nearly 3 years since the Penguin Random House merger was announced, the newly formed conglomerate has been slowly merging operations in the US, Canada, and elsewhere, and now the consolidation efforts have spread to the library ebook market.

Starting 1 January 2016, all ebooks published by Penguin Random House will be sold under the same terms currently offered by Random House.

PRH currently licenses Penguin titles to libraries under an expiring one-year term, and sells Random House titles to libraries at premium prices with no expiration. Starting next month all of the ebooks will be sold under the premium price model, and libraries will continue to enjoy the right to transfer ebooks from one library ebook platform to the next.

“We want this transition to our new terms to be as easy and as smooth a process as possible for our library partners, and my team and I have been working closely with all the various digital aggregators who sell our titles to libraries to achieve this. Any Penguin or DK titles purchased prior to January 1, 2016 will be honored under the existing one-year loan cap,” Skip Dye, VP of library sales for Penguin Random House, told LJ.

At the same time, PRH also plans to cut the library ebook price cap from $85 down to $65. Current prices start at "under $20 per title" (meaning $19.95), and in the statement PRH said their "suggested pricing of ebooks for libraries will be variable and flexible." They’re also promising to hold periodic sales.

Those high prices are the main reason why library ebook adoption lags. Depending on which survey you look at, as few as 38% of Americans know that their library has ebooks (when in fact over 95% of public libraries offer ebooks) and only 6% have checked out a book.

But PRH is not solely to blame; the other Big Five publishers demand similarly exploitative terms. Hachette also sells ebooks to libraries at a steep markup, while S&S licenses ebooks under an expiring one-year license (or two years, for 150% of the price). Macmillan manages to combine the worst of both models; they charge a premium price and limit libraries to a two-year license.

image by michael_d_beckwith

Comments

Anne December 3, 2015 um 4:21 pm

My cousin is in charge of Youth Services for my state’s largest library and she made a point last week that hadn’t occurred to me but is covered in the linked article.

I mentioned my shock that my ( IMO, poor and pitiful) library had purchased nine digital copies of a particular book. When cousin found out who the author was and that the publisher was Penguin, she wasn’t surprised. The book was bound to be very much in demand in our state and the fact that the license expires in 12 months probably works in the favor of the library’s budget. Odds are they paid somewhere around $20 for each copy to Penguin and each copy will likely be circulated 14-15 times during the license period. If they had had to pay $80 a copy to Random House, they never would have been able to come close to covering early demand.

Well, they aren’t covering demand. There are currently 60+ holds on the book four months after release date but I’m sure it would far worse under the RH model.

Anyway, cousin says that libraries hate the RH model for blockbusters and she cited Fifty Shades as a worst case scenario. They paid RH’s price for a huge number of copies for that are just sitting there uncirculated these days. RH is justifying the pricing by saying the libraries have "full and permanent ownership". How does that work with a digital item?