Tor Books has just demonstrated that the decision makers at Macmillan are surprisingly ignorant on the basic principles of microeconomics in general.
Earlier this weeks Tor Books informed libraries that it was windowing library ebooks. Starting this month, ebooks would be delayed by as much as 40 months.
Here's the statement, as reprinted by one of the Upper Arlington Public Library:
Tor Books, a division of Macmillan Publishers and a leading global publisher of science fiction and fantasy will be changing our eBook lending model to libraries as part of a test program to determine the impact of eLending on retail sales. Our current analysis on eLending indicates it is having a direct and adverse impact on retail eBook sales.
Effective with July 2018 publications, all new titles from Tor Books will become available for library eBook distribution four months after their retail on-sale date rather than the current program which allows libraries to purchase the titles on their retail on-sale date. During the test period, we will work closely with our library vendors who service this channel to evaluate the results and develop ongoing terms that will best support Tor’s authors, their agents, and Tor’s channel partners.
In addition, Macmillan will actively participate in the recently launched “Panorama Project,” the first large-scale, data-driven research project focused on understanding the impact of library holdings on book discovery, author brand development, and retail sales (panoramaproject.org).
With data from both programs, we will be in a better position to analyze and understand the impact of eLending on our publishing program. The timing of the test period is open-ended.
OverDrive also sent a message to libraries, but I don't have it yet.
Edit: It has been added to the end of the post, along with the ALA statement.
I do, however, have the statement that Macmillan sent to PW. "We have been seeing an adverse impact on our ebook sales over a period of time," Macmillan said, "and are using this test to determine if library ebook lending is one of the contributing factors."
This is so bizarre that I had to read it twice before I could beleive that Macmillan could say something this clueless. (I also have to wonder what drug Andrew Albanese is on, that he did not react to the quote - Xanax?)
The thing is, I know why Macmillan has poor ebook sales, and so do you.
Macmillan has poor ebook sales because they have adopted a policy of discouraging ebook sales in favor of print sales. Macmillan adopted this policy in late 2009 when they conspired with Apple and 4 other publishers to violate antitrust law by forcing Amazon to accept what is called agency pricing, a system where the publishers set the price and retailers are prohibited from deep discounts and sales.
Everyone knows this; you could even ask Mike Shatzkin and he'll tell you pretty much the same thing. To pretend that Macmillan's poor ebook sales are a result of anything other than Macmillan's own policies shows a basic lack of awareness of consumer behavior.
Pretending that the cause might be library ebooks, on the other hand, is reminiscent of Animal Farm (or possibly 1984, but either way Orwell nailed it).
It almost makes you wonder if this is really just a smokescreen for something else, doesn't it?
Update: Here's the ALA's statement:
At the beginning of July, Tor, a division of Macmillan, announced without warning that it was immediately beginning to embargo ebook sales of new titles to libraries for four months. Today American Library Association (ALA) President Loida Garcia-Febo issued the following statement:
“The American Library Association and our members have worked diligently to increase access to and exposure for the widest range of ebooks and authors,” said Garcia-Febo. “Over years, ALA made great strides in working with publishers and distributors to better serve readers with increasingly robust digital collections. We remain committed to a vibrant and accessible reading ecosystem for all.
“I am dismayed now to see Tor bring forward a tired and unproven claim of library lending adversely affecting sales. This move undermines our shared commitment to readers and writers—particularly with no advance notice or discussion with libraries. In fact, Macmillan references its involvement with the Panorama Project, which is a large-scale, data-driven research project focused on understanding the impact of library holdings on book discovery, author brand development, and sales. For this reason, this change by Tor—literally on the heels of Panorama’s launch—is particularly unexpected and unwelcome.
"The ALA calls for Macmillan to move just as quickly to reverse its course and immediately lift the embargo while the Panorama Project does its work.”
The American Library Association (ALA) is the foremost national organization providing resources to inspire library and information professionals to transform their communities through essential programs and services. For more than 140 years, the ALA has been the trusted voice of libraries, advocating for the profession and the library’s role in enhancing learning and ensuring access to information for all. For more information, visit ala.org.
And here's the email OD sent to libraries
On behalf of **********, your account manager, I am writing to let you know we received notice from Tor Books, a division of Macmillan Publishers, regarding a change in policy for eBook lending availability for libraries. Tor Books titles will now be delayed for library availability for four months from their retail release date, beginning with the July 2018 releases. As your library has placed pre-orders for titles affected by this change, we are cancelling orders for these titles. You can see affected titles in your “Recalled Content” report in Marketplace. We have attached Macmillan’s notice of this policy change.
OverDrive is dismayed and disappointed in Macmillan’s decision. We take issue with Macmillan’s conclusion that library availability has an adverse impact on retail sales and Macmillan has not shared the data or analysis that supports this statement.
We are in ongoing and active dialogue with Macmillan to provide data and information to advocate a change of this policy. Macmillan plans to participate in the Panorama Project, which is undertaking a series of pilot programs and research projects to provide objective evidence of the impact of library catalogs and lending as it relates to book discovery, author brand, and retail sales.
We encourage you to contact Macmillan directly to provide your feedback at [email protected].