The first-sale doctrine does not apply to digital content.
For the most part, publishers do not sell their e-books or audiobooks to libraries—
they sell digital distribution rights to third-party venders, such as OverDrive, and people like Steve Potash sell lending rights to libraries.
These rights often have an expiration date, and they make library e-books “a lot more expensive, in general, than print books,”
The vast majority of OverDrive’s earnings come from markups on the digital content that it licenses to libraries and schools,
which is to say that these earnings come largely from American taxes
Rakuten, the maker of the Kobo e-reader, bought OverDrive for more than four hundred million dollars, in 2015.
Last year, it sold the company to K.K.R., the private-equity firm made famous by the 1989 book “Barbarians at the Gate.”
The details of the sale were not made public, but Rakuten reported a profit of “about $365.6 million.”
last year, more than a hundred library systems checked out a million or more books each from OverDrive’s catalogue, and
the company reported a staggering four hundred and thirty million checkouts,
up a third from the year before
gradually, the Big Six began to sell digital rights to libraries under a “one copy, one user” model.
As soon as one reader returned an e-book, a second reader could check it out, and so on, with no expiration date
In 2011, HarperCollins introduced a new lending model that was capped at twenty-six checkouts,
after which a library would need to purchase the book again.
Publishers soon introduced other variations, from
two-year licenses to
copies that multiple readers could use at one time,
which boosted their revenue and allowed libraries to buy different kinds of books in different ways.
For a classic work,
which readers were likely to check out steadily for years to come,
a library might purchase a handful of expensive perpetual licenses.
With a flashy best-seller,
which could be expected to lose steam over time,
the library might buy a large number of cheaper licenses that would expire relatively quickly.
OverDrive’s influence is an important counterweight to the largest publishers and to Amazon,
which dominates the consumer e-book market and operates as a publisher in its own right.
Amazon did not make its own e-books available to libraries
until May, when it announced a deal with the Digital Public Library of America
Libraries now pay OverDrive and its peers for a wide range of digital services,
from negotiating prices with publishers
to managing an increasingly complex system of digital right
At that point, the library system
had purchased three hundred and ten perpetual audiobook licenses at ninety-five dollars each, for a total of $29,450, and
had bought six hundred and thirty-nine one- and two-year licenses for the e-book, for a total of $22,512.
Taken together, these digital rights cost about as much as three thousand copies of the consumer e-book,
which sells for about eighteen dollars per copy
Audible, which is owned by Amazon, has already made listening to books more like streaming,
with subscribers gaining access to a shifting catalogue of audiobooks that they do not need to buy separately
Maybe readers will expect books to feel more like Web sites, and
an infinite scroll will replace the turn of the page,
as it has in the digital magazine you are reading now.
Perhaps readers will want images and videos to be woven seamlessly into the text, requiring a new format.
Let’s Consider Some of the Implications of Third-Party Payment Processing for In-App Purchasing on iOS and Android
If Apple winds up acceding to these demands for third-party in-app payment providers —
whether nation-by-nation as legislation passes, or by washing their hands of the entire controversy and making a worldwide policy change —
I really hope they add APIs and mandate the use of them
such that however you pay in-app,
any subscription made in-app must show up in this list, and
the provider must support no-hassle cancellation from within the system interface.
Renewal receipts and upcoming renewal reminders should be mandatory, too