Culture, Media and Sport CommitteeWritten evidence submitted by The Publishers Association

Introduction

1. The Publishers Association (“the PA”) is the representative body for the book, journal, audio and electronic publishers in the UK. Our membership of 113 companies spans the academic, education and trade sectors, comprising small and medium enterprises through to global companies. The PA’s members annually account for around £4.6 billion of revenue, with £3.1 billion derived from the sales of books and £1.5 billion from the sales of learned journals.

2. In this submission we make the case that:

libraries are fundamentally important to the social and economic vibrancy of the UK;

UK publishers continue to provide full support to the library community through a variety of programmes and initiatives; and

UK publishers are working with the library community and government to overcome the challenges and barriers to developing an e-book lending capability through the public library service.

3. The PA greatly welcomes the Committee’s timely inquiry into the current actual and threatened library closures. The full impact of library closures on the books and reading eco-system in the UK is probably impossible to accurately predict or evaluate. But there surely can be little doubt that depriving communities—be they villages, towns or cities—of universal access to free reading material will have a damaging affect on their ability to acquire knowledge, their social well-being and their education. In the longer term these negative impacts would inevitably be felt back up the supply chain, as over time a population decreasingly rooted in a reading culture will engage less with books and literature, which would translate into a diminished cultural and economic opportunities for authors. Nor could Britain’s vibrant and world-class publishing sector expect to be immune from these negative impacts.

Publisher Engagement with the Library Service

4. Publishers have a long standing historic relationship with libraries and across our membership libraries are seen as a vital element of our country’s reading culture. We recognise the immense value professional librarians deliver to their readers in helping with discoverability and recommendation, and the role this plays in developing reading audiences. This role is of particular importance to publishers at a time when bookshops are under such strong commercial pressure. Unlike in some other countries, sales to libraries are relatively small, and so publisher interest in a thriving library sector is not so much a directly commercial question as one of long-term reader development and audience building.

5. A number of our members are founding partners of Reading Partners, The Reading Agency’s (TRA) initiative to increase the collaboration between publishers and libraries, through which publishers are active in promoting author events at libraries. Several publishing initiatives geared at boosting reading and literacy, such as World Book Day, World Book Night and Quick Reads, see publishers engaging directly with the library sector and encouraging readers into their local libraries.

6. Furthermore, The PA is currently engaged with TRA in a joint bid for funding from the Arts Council “Commercial Partnerships” programme. The bid has the PA working with TRA and the Society of Chief Librarians to support the strategic aims of library services through giving libraries access to publishers’ digital marketing skills and collateral. If successful, the bid would see the creation of six practical projects to act as case studies of excellent practice in digital reading initiatives, with evaluation of how well new digital reader services help build audiences for reading.

7. Publishers are also working on the National Reading Offer, which is aimed at helping libraries combat the effect of cuts by working together as a network to share costs through shared programmes, such as marketing content and supporting the Reading Groups for Everyone campaign to increase the number of reading groups to 2000 by 2013.

E-Lending

8. Among the questions posed in the Committee’s call for evidence is what constitutes a comprehensive and efficient library service in the 21st century. At least part of the answer is likely to involve a discussion on e-books and the ability of public libraries to engage in e-lending. To the extent that the Committee is interested in this issue, we set out below the views of The Publishers Association.

9. As a representative trade association The PA can have no part to play in encouraging member companies towards any particular commercial model of e-lending, be it a “download” model, such as provided by aggregators like Overdrive, or a “streaming service” of the sort developed by Public Library Online; or indeed whether to engage in e-lending at all. However, The PA does hope to perform a useful function in providing information about all of the relevant services and offerings available to member companies. It acts as a conduit between the publishing and library communities and a focused first point-of-contact for those wishing to enter either the market, or the policy debate.

10. As an on-going example of this role The PA convenes regular meetings of the Society of Chief Librarians, The Reading Agency, the Chartered Institute of Librarians and Information Professionals, to develop a greater mutual understanding of each others’ positions. (The most recent such meeting was on 8 December 2011.) The PA and its members have also been involved in conversations with Ed Vaizey MP and DCMS officials in seeking a sustainable future for the UK’s public library service which we and our members see as a vital component in the literacy community of our country

Challenges and Barriers

11. The public library service sees the ability to offer e-lending as an important element in ensuring that libraries remain relevant and popular in the coming decades. As the penetration of e-reading devices in the population continues to grow (as surely it must with the manufacturers’ pricing strategies clearly aiming for the mass market), readers will inevitably want to know what libraries can offer them, alongside the e-retail offering. Publishers are not opposed to such developments in principle. However, we are keenly aware of a number of challenges and barriers to the development of e-lending services. These are essential to overcome if the ambitions of e-lending are to become a reality.

12. As noted above, competition law rightly precludes The PA from taking a more proactive role in the development or promotion of commercial services. Whilst a fully understandable restriction, this does nevertheless create a challenge in terms of how fully we can be involved in the debate.

13. However, we are aware of two major concerns from many publishers with regards to the present viability of e-lending services. The first is the commercial risk. Facilitating the free acquisition of ebooks to readers does imply the risk of substitutional activity: bluntly, why buy when you can borrow? Experience in the physical book world, where lending activity can be strongly positively correlated to purchasing, will not necessarily be relevant in the digital domain. The relatively restricted supply of physical books in the library service means that there are always likely to be occasions when purchasing is the best option for the reader who wants a book immediately. Digital lending does not suffer from the same restriction meaning that borrowing is always likely to be a viable option. Furthermore, whereas the lending of “front list” titles can be managed through control of supply which will usually not meet demand, “mid” or “back” list titles are less in demand and so their supply can be more easily managed. For these titles, therefore, there is a considerably stronger risk that a huge amount of the current retail demand could be quashed through e-lending.

14. Publishers have a primary duty to the authors whose copyrights they license to ensure that their works are protected and afforded the maximum commercial opportunities. Allied closely to the commercial risk to publishers is the potential damaging impact to authors. Through our regular engagement with the Society of Authors—as well as through individual members’ engagement with authors and their agents—it is clear that although authors support and encourage library borrowing and reading, there is high degree of concern amongst authors about the potential impact of e-lending. The widespread proliferation of free e-lending would potentially deprive authors of significant royalty streams, thus clearly undermining their ability and incentive to create works in the long run. It could be further noted that given the on-going absence of Public Lending Right for e-books that authors will not stand to benefit from any e-lending activity. It would be a welcome step if Government were to implement this.

15. The second major risk factor is that of online copyright infringement. Whenever digital files are put on the internet the risk is created that they will be duplicated and disseminated in unauthorised ways, allowing widespread free access and undermining legitimate commercial activity. Although Digital Rights Management software is employed throughout the supply chain, this is relatively easy to crack. There is already clear evidence across the world that e-book piracy is a clear and present danger to publishers’ and authors’ royalty streams.

16. The combination of these two risk factors lies behind a great deal of the trepidation on the part of publishers to fully engage with current e-lending solutions. This is not simply a result of a natural commercial instinct for self-preservation: the entire reading eco-system could be imperilled if wrong or rash decisions are made. If deprived of revenues by either or both factors, publishers quite simply lose their ability to invest in new works. This would have a huge negative impact on the volume, diversity and innovation in the marketplace. The losers in this scenario are not just the publishers, but authors, retailers, libraries and most of all consumer-readers.

17. One challenge for publishers and local authorities lies in the capacity of local authority IT systems and the rules governing their operation. To the extent to which local authorities wish to develop and deliver their own e-lending platforms, the provision of e-lending by public libraries is dependent on their being sufficiently robust IT systems in place in the services. It is our understanding that not all local authorities’ systems could sustain high levels of e-lending activity at the present time; and also that strict regulations around data protection and network security could make it difficult for public libraries to engage a well functioning system. (The basis for this view is largely anecdotal but it would useful to have a full discussion on this point.)

Concluding Remarks

18. Thank you for this opportunity to convey our views and we would be delighted to provide the Committee with any further views and evidence, either in written or oral form.

January 2012

Prepared 5th November 2012