Press Release

New Study Analyzes the Impact of Library E-Lending on Commercial Book Markets

WASHINGTON, D.C. — Today, the Association of American Publishers (AAP) and the Authors Guild announced the release of a landmark independent study by leading economists at Secretariat Advisors, titled An Empirical Study of the Impact of Library E-Lending on the Book Economy: As Public Libraries Prioritize eBook Formats, Harm to Commercial Markets Across All Formats is Quantifiable and Significant.

The study, commissioned jointly by AAP and the Authors Guild, but independently conducted by Secretariat Advisors’ economists, provides the most rigorous analysis to date of how the steep shift toward digital lending in recent years has affected the commercial marketplace for books in the United States, specifically, the consumer sales on which authors and publishers rely for financial success. The research concludes that increased digital access to e-books through library apps influences consumer behavior and impacts commercial markets across both physical and digital formats. The study further concludes there is robust and economically meaningful evidence of direct substitution between library e-lending and retail sales and that decreases in library e-book prices or certain other changes to licensing terms, as required in recent state legislative initiatives, would cause further harm to commercial markets.

Authors, publishers, and libraries enjoy a close relationship and shared objective to promote and maximize reading across all levels of society, not only to champion established works of literature but to support the continued production of books not yet written. Speaking to this alliance, the study recognizes the crucial role of libraries as both public institutions and market participants, while contributing key empirical data that is essential to understanding the broader publishing ecosystem. It describes a book economy that is fueled by human creativity, technological innovation, and market competition, under the auspices of a federal Copyright Act that serves the public by prescribing a clear profit motive to authors and publishers, as envisioned and authorized by the U.S. Constitution. It observes that recent legislative efforts by several states, however well-intentioned, would compromise and conflict with this well-established equation, by imposing government controls on the distribution, purchase, and pricing of e-books, and often audiobooks as well, in library channels to the detriment of the overall book economy.

As the study shows, these state efforts would effectively undermine the commercial marketplace by demanding more digital copies for libraries for less money immediately upon first publication with little regard for the larger ecosystem. The financial impact would be felt by authors and their publishers whose livelihoods and business models depend on robust and sustainable revenue streams, by bookstores and state and local economies that will suffer lost revenues, and by consumers who will ultimately suffer from reduced supply. As further context, the study examines library funding in recent years across jurisdictions, concluding that collection budgets have not meaningfully increased and are generally constrained, even as states and localities expect libraries to offer both print and digital formats to their communities.

The study concludes that as libraries expand digital lending availability and shift their purchasing decisions from print to digital formats, they invariably compete with consumer channels, especially during the early window of a book’s commercial potential, given the ease of checking out e-books at any time of day or night with just a couple of clicks.  Data cited in the study shows that e-books now account for nearly half of many libraries’ collections as digital check-outs have increased significantly in recent years and library costs per license have fallen.

The following is a joint statement from Maria A. Pallante, AAP President and CEO and Mary Rasenberger, Authors Guild CEO:

“This expert study will be of critical interest to everyone who cares deeply about the future of books, including the authors who write them, the publishers who invest in them, and the booksellers and librarians who promote and deliver them to readers and communities across the country through a dynamic variety of formats, distribution channels, access models, and price points designed to give each book its best shot at success for as long a period as possible.

For state legislatures that seek to intrude into the literary marketplace by singling out e-formats for government mandates, the study addresses the significant economic consequences likely to result from such actions.  It is a central tenet of copyright that licensors and licensees should individually negotiate their terms in competitive transactions that are free of government regulation by state or local governments. This time-tested legal framework has built a U.S. creative economy and book supply that are world-renowned, but which should not be taken for granted.

We note that many if not most libraries are inadequately funded for their outsized missions and collection needs in contemporary society, but the solution is not to upend the book marketplace. Rather, fully funding libraries should be an urgent priority for all lawmakers, and the Authors Guild and AAP stand firmly behind efforts that would increase taxpayer funding at every level of government and support new ideas for private sector support.  It should be obvious to policymakers that both the mission of libraries and the intellectual property of authors and publishers are equally invaluable to the public interest, not a tradeoff.

As a matter of law, it is incontrovertible that state governments lack constitutional authority to contradict our national copyright system for books or any other protected creative expression, which is the exclusive province of the U.S. Congress. In short, the key to the future of books across all formats will not come from the statehouse but from ongoing private sector innovation and more numerous and varied business models that are the result of nimble and competitive marketplace negotiations. It is our view that debates in the states, frequently accompanied by misinformation about law and facts, have not assisted the discussions between licensors and licensees but rather polarized and confused them.  

We believe this study presents new information that points to the importance of a healthy book economy that is able to reflect and respond to complex digital markets with an eye to the future, free of one-size-fits-all mandates or artificial terms that ask the private sector to subsidize the state.  In this moment, as creators throughout the world face enormous harm from AI-generated products that have infringed their works on a mass scale and now compete with them for sales, the common cause of authors, publishers, libraries, and booksellers—to get more people reading and more books into the hands of readers—has never been more important.”

Key Findings from the Study

• “[D]igital checkouts for e-books and audiobooks have exploded in recent years as libraries have reformulated their spending to prioritize digital formats, and patrons have discovered the ease of digital borrowing made possible through frictionless library apps.”

• “[S]hifts in the library marketplace have affected consumer behavior and commercial markets. Even where print remains the preferred format for purchase, some readers may still shift to reading digitally when library access makes the digital option easy, immediate and free.”

• “[T]o the extent e-lending is likely to significantly decrease book sales, economic theory would expect market forces to account for that through negotiations over the scope and extent of restrictions on library lending of e-books in licensing agreements.”

• “[C]onsumer print sales decline by approximately 0.85 to 1.0 percent for every one-percentage-point increase in the share of e-books in public libraries, with adult fiction being at the upper end of this range.”

• “[T]here is robust and economically meaningful evidence of direct, within-title substitution between library e-lending and retail sales, especially early in the lifecycle of a book.”

• “[W]ith respect to bestsellers, library e-lending is not serving as a channel for discovery but rather is substituting for retail e-book sales at the national level.”

• “Numerous states…have attempted to legislate special treatment for library e-books that appears to contravene the Copyright Act’s preemption of state law by capping or otherwise interfering with licensing fees, removing controls on the number of copies available to libraries, and/or forbidding economically rational practices such as windowing that are widespread in other creative content industries.”

• “These findings suggest that state legislative efforts related to public library e-lending, however well-intentioned, present significant negative consequences for the publishing ecosystem and consumers by exacerbating substitution between e-lending and retail sales, which threatens to destabilize the commercial book market.”

• “[A]cquisitions budgets remain constrained even as libraries are expected to maintain both print and digital collections.”

About the Study:

This study is the work product of Jéssica Dutra, Ph.D. and Robert Stoner, Ph.D. of Secretariat Advisors. Undertaken at the request of the Association of American Publishers and the Authors Guild, the study’s empirical analyses and all findings belong entirely to Secretariat Advisors. Secretariat Advisors is a global expert witness, litigation consulting, and economic advisory firm trusted to address complex legal, risk, and regulatory matters. Read more at secretariat-intl.com.

The full study is available here.

About AAP

The Association of American Publishers (AAP) represents book, journal, and education publishers in the United States on matters of law and policy, advocating for outcomes that incentivize the publication of creative and intellectual expression across a variety of formats and business models in support of an inspired and well-read democracy. AAP fights vigorously for the copyright and freedom of expression protections that have been the lifeblood of American publishing for more than 250 years, from the printing press to digital markets. Comprised of small, large, independent, scholarly, commercial, and nonprofit houses, AAP’s members collectively cultivate and publish a vast body of literature by both new and established authors, including winners of every major writing prize.  Learn more at publishers.org.

About The Authors Guild

The Authors Guild is the nation’s oldest and largest professional organization for published writers in the United States, with a particular expertise and long history of involvement in freedom of expression protections and copyright law, which together are the constitutional and economic bedrock of authors’ livelihoods. With over 18,000 members, the Authors Guild advocates for authors’ rights and fair pay, and protects against challenges such as infringement, censorship, book bans, the misuse of AI, and nonpayment. In addition to engaging with legislatures and the courts on behalf of all writers of every level of achievement, the Authors Guild offers resources, legal support, and a professional community to individual authors to help sustain their careers and thrive in an evolving literary landscape.  Learn more at authorsguild.org.