Is an eBook really the same as a physical copy of a book? Who really owns an eBook and what even is ownership? What is the relationship between publishers, platforms, and purchasers as the use of eBooks evolves? Authors Lamdan, Schultz, Weinberg, and Woodcock address these questions and more in “The Anti-Ownership Ebook Economy.” They interviewed over 30 stakeholders that fill various essential roles in the eBook marketplace, including publishers, platform CEOs, librarians, lawyers, and more, and synthesized and analyzed their perspectives on their participation in the eBook marketplace. Below, I’ve summarized a few key points from the paper, though all thoughts are my own interpretations of the paper and not meant to represent the authors’ perspectives.
The First Sale Doctrine is at the heart of ownership discussions surrounding eBooks. The doctrine states that a copyright holder that parts ways with their work, whether through sale or donation, has zero direct control over how that copy is used. Anyone that comes into lawful possession of the copy has all of the ownership rights that come with any other form of personal property. Owners of physical copies of books can resell, transport from place to place, or transfer ownership of the book as they please. This doctrine worried eBook publishers as they feared limitless piracy and the secondary resale market for books, which they have no control over. Publishers were able to circumvent the First Sale Doctrine by establishing a licensing regime in which eBooks are “licensed” to purchasers and not sold. eBook purchasers are merely granted the right to access the books, not do anything else with them such as resell, lend to others, or donate – the rights typically associated with true ownership.
Publishers’ Concerns Surrounding eBooks
There are numerous nuances between eBooks and physical books that pose concerns for publishers and push them toward more controlling and limiting eBook regimes. Selling to libraries makes up a large portion of book sales. Library eBook lending poses serious concerns for publishers because of the lack of “friction” of library eBook lending. When borrowing a physical copy of a book from a library, readers have to take the time and effort to go to the library, see if the book they want is there, put the book on hold until it is there, and return the book once obtained within two weeks or risk getting fined. When borrowing an eBook from a library, a reader is able to instantly download the eBook from the library’s internet server exactly the same way they would purchase the book from, say, Amazon. Readers were incentivized to purchase books to avoid the “friction” of borrowing physical books. Publishers are worried that the lack of “friction” in borrowing eBooks will take away this incentive to actually buy the book and lead readers to view library copies of eBooks as “free,” thus devaluing eBooks.
Furthermore, paper books degrade over time, creating opportunities for publishers to resell – especially to libraries where books are exposed to significant wear and tear. In contrast, eBooks last in perpetuity because they don’t degrade. They only become less accessible over time if digital collections do not keep up to date with evolving technologies. Publishers are worried about missing out on significant amounts of revenue as a result of both of these differences between eBooks and physical books.
The Relationship Between Publishers, Platforms, and Purchasers
The eBook licensing regime enables publishers to retain control over purchasers and copies of eBooks in previously unimaginable ways. eBook platforms facilitate this control. eBook platforms are where eBooks are both purchased and read so platforms maintain contact with the purchaser in perpetuity. The Digital Rights Management tool (DRM) prevents consumers from downloading, saving, or sharing their books and even prevents purchasers from moving eBooks in their collection between platforms and ereaders, for example, from Kindle to their Nook. DRM benefits both publishers and eBook platforms. DRM eliminates the secondary market for eBooks as it prevents the type of casual sharing of books between friends that would be allowed under the First Sale Doctrine. The existence of a secondary market for eBooks poses concerns for publishers because it would enable purchasers to transfer identical digital files of books in perfect condition to multiple people. In contrast, when a purchaser shares a physical copy of a book, that book has been subject to the wear and tear of the previous reader’s use and can only be shared with one person at a time. Furthermore, publishers retain no control over the sale of books in the secondary market because of the First Sale Doctrine, so a book could be sold at prices that harm the original market for the book.
DRM also locks purchasers into platforms, furthering platforms’ dominant market shares and creating a “walled garden structure.” A reader who has bought one book on Amazon and cannot easily transfer the file to another platform will continue to purchase books on Amazon. This is anti-competitive and inhibits readers’ ability to switch platforms as they see fit or price-shop across platforms for the best prices for the books they want to purchase.
While DRM is extremely beneficial to publishers and it is publishers who insist on its use on eBook platforms, DRM also enables platforms to lock publishers into walled gardens. According to one estimate, Amazon leads the US eBook market with around 81% of the market share in 2020. OverDrive claims at least 90% of public libraries in the US and Canada as clients. Publishers must cooperate with market dominant platforms in order to have their books seen by the most consumers. If readers are “locked in” to a platform, publishers have to use platforms that have the most readers. Publishers aren’t able to shop around for platforms the same way that readers also cannot. Consequently, publishers are dependent on and restricted to the limitations of the platforms. While publishers may wish to create better versions of eBooks that have improved features, like audio for example, publishers cannot if the platform doesn’t support the feature. Platforms can also use their market dominance to contradict publisher preferences and sell books below retail price.
The greatest effect of the relationship between eBook platforms, publishers, and purchasers is that the eBook licensing regime enables platforms and publishers to have access to readers permanently. The “walled garden” nature of an eBook platform gives access to a wealth of customer data that would never be available in a physical book context where access to the customer ends the moment the sale of the book is complete. Platforms can now collect data on the physical location of a reader and their personal information such as name, address, and payment information. Platforms can track every movement that a reader takes on a platform. Platforms then compile this data and monetize it. They share it with publishers who use the data to increase sales and make marketing and manufacturing decisions, such as which books to advertise more and which to give up on. They can also use the data to predict market trends on which books will be popular and worth publishing. Platforms also sell customer data to third parties, such as advertisers, companies, and institutions, for massive profits. This is a massive infringement of the privacy of all eBook readers.
The current eBook landscape is such that though readers can own a physical book, they cannot own an eBook of the same material. eBook readers are deprived of their basic rights of ownership. They can no longer access their basic freedoms to take books anywhere and give them to whomever they please. eBook readers are subjected to the extended control of publishers and platforms and their personal data is collected and harvested for these entities’ further gains.
To dive into a much more comprehensive understanding of the report, learn more about the eBook ecosystem, current eBook licensing models and their impacts on privacy, and the future of digital ownership more generally, please join the Engelberg Center for their event Exploring the Anti-Ownership Ebook Economy on Friday, October 27! Learn more and RSVP to the event here.