Tag Archives: loan

A publisher caught loaning its own ebooks from library for profit

2016-11-21

In some countries, like Sweden, public libraries have an advanced system for citizens to loan ebooks. All parties, libraries, citizens and publishers have been happy to the system, because it works, allows budgeting for libraries, and enables some business for publishers. Now, a Swedish publisher has discovered an old-school method to cheat the system. The publisher’s family members loaned as many their own company’s published ebooks as they could from the library in order to generate revenue from the loans.
acer b3-a20 tablet, 10 inches, Android 5.1
This is how the library system works in Sweden. Digital media distrubutor Axiell maintains a platform that connects publishers and libraries. A publisher uploads ebooks they want to make available for libraries to the system, and sets the price per loan for each book. Libraries search the system for ebooks. When they discover what they want, and the price is right, they make the ebook available for their community.

Each loan of an ebook generates a small amount of revenue for the publisher of the book.

That is exactly what the family of the small publisher in southern Sweden had been ordered to do.

Helsingborgs Dagblad reported that the scheme was discovered in the library of small community Burlöv in South Sweden. The community is so small that library staff took notice of strange peak in loans on the first day of each month. That’s when six family members of the publisher loaned as many ebooks as they were allowed to loan each month. They could borrow 36 ebooks altogether, but in a small community, they had already consumed half of the monthly budget that library had reserved for ebooks.

Family members had been able to get library cards to other nearby libraries as well. They had implemented the same routine in three libraries, at least.

So far, the estimated total profit the publisher had managed to generate is less than 10 000 euros (82 000 Swedish kronor). More libraries may discover they have been cheated as the news spread.

Police report has been filed, and what-went-wrong analysis has started. Publisher’s all ebooks have been removed from the library system.

The case may not be as straightforward as one might think. The family members had legal library cards. They used their right as citizens and library card holders to loan ebooks from public libraries.

Surprisingly, the platform provider Axiell recalls a similar case that happened in 2014. A publisher had loaned its own ebooks, got caught, and was reported to the police. Axiell, however, didn’t modify the platform to detect behavior like this. When asked why, Axiell representative responds that the platform doesn’t store any personal information that could be used to track users.

Axiell has informed libraries that it will fully compensate them, and pay the estimated loss 82 000 krona back to libraries. Obviously, Axiell seeks to settle the case with the publisher in or out of court.

EU confirms that libraries can lend ebooks provided authors are fairly compensated

2016-11-13

Ebooks have been, and are being, lended by public libraries in many EU countries, but on November 10th, 2016 the EU Court of Justice decided that libraries really have the right to do so. The court regarded that the principles for lending paper books and ebooks are the same. The most important point for authors and publishers of digital books is that the court specifically stated that the authors must be fairly remunerated for library loans.
bookshelf, dictionaries
The case was brought to the EU Court of Justice by Dutch authors’ organization Stichting Leenrecht which collects remuneration for authors. The EU court, however, saw the big picture and stated in its press release:

“That conclusion is, moreover, borne out by the objective pursued by the directive, namely that copyright must adapt to new economic developments.”

The EU Court attitude is warmly welcomed, and hopefully spreads to EU nations as well. Authors’ rights to benefit from their work is the number one priority for everyone in the business, but at the same time, the way the rights are used must be developed as the digital era progresses.

The EU Court states:

“[e-book lending] has essentially similar characteristics to the lending of printed works. That is the case as regards the lending of a digital copy of a book under the ‘one copy, one user’ model.” And specifically reminds “… provided that authors obtain, at least, fair remuneration.”

Currently, there are many practices in EU countries how libraries deal with digital books. For instance, public libraries in Finland don’t compensate ebook rights holders anything when citizens lend their works. That’s why publishers and authors are very reluctant to make ebooks available via libraries – one of likely reasons that has prevented ebook market to emerge in the country. In Sweden, publishers can set the price per loan that libraries have to pay for each loan. If a publisher sets the loan price too high, libraries won’t make the book available, but when the price is right, everyone is happy (including citizens who couldn’t get enough of football star Zlatan’s biography).

Surprisingly, The Federation of European Publishers opposes EU Court’s ebook lending decision. The organization represents national publishers’ associations, which tends to mean big publishers. The organization’s concern seems to be (according to the press release) piracy: ebook lenders would loan ebooks only to crack the DRM and keep the books forever, and not return them to the library.

Two things for the Federation of European Publishers to consider: the same piracy risk is present in all ebooks purchased from bookstores, and it would be a good idea for the organization to get familiar with the ebook lending system in Sweden.