Rights? What Rights?

The battle is on.

If nothing else, the battle lines over eBooks are being drawn, with authors, publishers and retailers staking out their various positions. The proxy war is being fought over the lending of eBooks. Seriously. No, I mean it. As we have noted here previously, Amazon is pushing a lending library as a way to promote Kindle sales. Here’s what they say about the underlying agreements that make their program possible:

For the vast majority of titles, Amazon has reached agreement with publishers to include titles for a fixed fee. In some cases, Amazon is purchasing a title each time it is borrowed by a reader under standard wholesale terms as a no-risk trial to demonstrate to publishers the incremental growth and revenue opportunity that this new service presents.

Not so fast, Amazon, replies the Author’s Guild.

The Big Six publishers have refused to participate in the Amazon program. Amazon then approached second tier publishers. Many of them also refused to participate. According to the Author’s Guild, however, many found their books enrolled anyway.

Amazon has decided that it doesn’t need the publishers’ permission, because, as Amazon apparently sees it, its contracts with these publishers merely require it to pay publishers the wholesale price of the books that Amazon Prime customers download. By reasoning this way, Amazon claims it can sell e-books at any price, even giving them away, so long as the publishers are paid.

More from the Author’s Guild: “Amazon, in other words, appears to be boldly breaching its contracts with these publishers. This is an exercise of brute economic power. Amazon knows it can largely dictate terms to non-Big Six publishers, and it badly wanted to launch this program with some notable titles.”

What about those few publishers who did sign agreements with Amazon? Well… They may have violated their own author contracts. Again from the Author’s Guild:

While these publishers generally have the right to license e-book uses for many of their authors’ titles (just as most trade publishers do), our reading of the standard terms of these contracts is that they do not have the right to do so without the prior approval of the books’ authors…

Under most (perhaps all) publishing contracts, a license to Amazon’s Lending Library is outside the bounds of the publisher’s licensing authority. This isn’t a minor matter – in order to protect the author’s interests, all publishers should be asking permission before entering into such a bulk licensing agreement, and most would need to seek a contract amendment to do so.

On another front, meanwhile, Penguin has pulled its books from both the Amazon and Overdrive lending programs.

The battle is on.

Content consumers are caught in the crossfire, for sure. One pathway to eBooks has been blocked for the time being. At the moment, however, it appears that author’s are the biggest losers, what with at least one retailer trying to foist off reduced royalties and some publishers apparently skipping the get-author’s-permission step.

This is screw-you capitalism at its finest. We don’t say this from a scholarly reserve, either. We’ve experienced it first-hand, from a print publisher no less. This cannot stand. It promises to be a protracted battle.

Lending eBooks

The first English language reference to a “lending library” occurred in 1586. Since that time, they have taken many forms, including parish libraries, endowment libraries and municipal corporation libraries. Though they are to be distinguished from public (or circulating) libraries by the source of funding, they share a fundamental concept: participants “borrow” rather than “buy” the books in question.

The eBook, however, has challenged the concept of lending or borrowing books. Absent institutional support, the eBook remains tied to a single user. That’s tough to swallow. After more than five centuries of this practice, it’s also a hard habit to break. Most of us, at one time or another, have borrowed a book. I have personally lent copies of “Butcher, Baker” to a number of people, mostly family and friends. It’s an effective and efficient way to “spread the wealth.” Some of these borrowers later became buyers.

Now comes news that Amazon is taking steps to bring the eBook into the lending library tradition. Well, sort of… They’ve created the Kindle Owners’ Lending Library. The operative words here are Kindle Owners’ who, by the way, must also be Amazon Prime subscribers. Yes, that’s correct. If you own any other device or eReader, you’re out of luck, even with an Amazon Prime subscription. According to the Wall Street Journal, Amazon is using this restriction to drive Kindle sales.

Truth told, however, there is less here than meets the eye. Of the major six publishers, none are participating in this program. So Amazon is “offering” a grand total of 5,000 books. If we put that in mobile app terms, this would qualify Amazon as a third-tier player. It’s naive, however, to think that the lack of lending capabilities will make the eBook less popular or that it won’t eventually dominate book sales. And Amazon is making the most disruptive moves here.