More than a year after imposing a controversial four month “test” embargo on new release e-books in libraries from it’s Tor imprint, Macmillan announced today that it will now impose a two month embargo on library e-books across all of the company's imprints. The terms take effect November 1.

Under the publisher’s new digital terms of sale for libraries, "library systems" will be now be allowed to purchase a single—that is, one—perpetual access e-book during the first eight weeks of publication for each new Macmillan release, at half price ($30). Additional copies will then be available at full price (generally $60 for new releases) after the eight-week window has passed. All other terms remain the same: e-book licenses will continue to be metered for two years or 52 lends, whichever comes first, on a one copy/one user model. A Macmillan spokesperson confirmed to PW that the single perpetual access copy will be available only for new release titles in the first eight weeks after publication—the option to buy a single perpetual access copy expires after that eight week window, and the offer is not available for backlist titles.

In what counts as a measure of good news for libraries, however, no changes were announced for Macmillan digital audiobooks.

Macmillan is now the fourth Big Five publisher to change its terms for digital content in libraries in recent months—but its changes, and the views expressed by Macmillan CEO John Sargent, are by far the most unique and contentious of the group. In a July 25 memo (addressed to authors, illustrators, and agents), Sargent not only delivered the news of Macmillan's library e-book changes, he basically called out libraries for depressing author payments.

“It seems that given a choice between a purchase of an e-book for $12.99 or a frictionless lend for free, the American e-book reader is starting to lean heavily toward free,” Sargent wrote. “Our new terms are designed to protect the value of your books during their first format publication. But they also ensure that the mission of libraries is supported."

In the memo, Sargent asserted that 45% of Macmillan’s U.S. “e-book reads” were now “being borrowed for free” from libraries," a trend he attributed to a mix of factors, including the lack of "friction" in e-lending compared to physical book lending, the "active marketing by various parties to turn purchasers into borrowers," and unnamed apps "supporting e-book lending regardless of residence, including borrowing from libraries in different states and countries."

Macmillan has declined repeated requests over the last year to discuss the embargo, or Macmillan's library e-book program more generally.

At press time, American Library Association representatives had yet to issue an official response, but Alan Inouye, ALA's senior director, for Public Policy & Government Relations, offered a blunt first assessment of Macmillan's plan: "Worse than expected," he told PW. "Embargoes violate the principle of equitable access to information that is at the core of libraries," he added, pointing out that Macmillan's policy is curiously out of step with the rest of the industry. "Within the past year, three of the other Big Five publishers revised their library e-book business models, and none of them concluded that libraries were a threat to their profitability," Inouye observed. "Indeed, these other publishers believe that libraries benefit their businesses. Macmillan stands alone with its embargo."

“ Sargent asserted that 45% of Macmillan’s U.S. 'e-book reads' were now being 'borrowed for free' from libraries ”

"This is just Sargent using fear tactics, trying to gaslight authors and agents," said PW library columnist Brian Kenney, director of the White Plains Public Library, citing Sargent's references to "mysterious" data that "is never shared" and suggestions that libraries are somehow circulating e-books outside their service areas. "My library is able to share its e-book collection with other libraries in my consortium, but with the consent of all the publishers involved. And it rarely involves sharing frontlist titles, since an algorithm ensures that my e-book copies go to fulfill requests from my users first. And for every four requests, we purchase another copy." As for an app that would allow libraries to circulate e-books to patrons outside of their service area, Kenney says he is unaware of any.

Susan Caron, director, Collections & Membership Services, for the Toronto Public Library, which racked up the most digital lends in 2018, according to vendor OverDrive, said the claims in Sargent's memo left her speechless. "I don’t know where to start," Caron said. "Active marketing to turn purchasers into borrowers? There is no friction in e-lending? Except that people have to wait months for a title. I just randomly picked Normal People by Sally Rooney, published in August 2018. One year later, people still have to wait 29 weeks for a copy and we have 130. Hardly frictionless."

And both Kenney and Caron suggest Macmillan clearly did not listen to librarian input, because the single perpetual access copy is not useful. "If we need more than one copy of a title, we’ll just wait. [Otherwise] our users will be upset if we don’t buy more to reduce holds, as we normally do. And if we can wait eight weeks, we may decide not to buy the title at all."

In offering a single perpetual access e-book for $30, Kenney says Sargent is offering libraries a concession he knows most public libraries don't want.

"There are very few titles I want to own in perpetuity," Kenney explains, adding that this kind of "archival" collecting is best done in print, by larger institutions, like the Library of Congress or the New York Public Library. "And eight weeks after publication, It's unlikely I'm going to go back and purchase the e-book at all. Libraries buy books, print and e-books, in advance of publication. After eight weeks, you've fallen off our workflow. Any buzz is likely dissipating. And, without a record for people to place holds against, I have no way to accurately gauge my community's interest. In the instance that a book is actually popular, I don't want just one copy to be available, collecting hold requests that I can't fulfill. I'm not in the business of making my users unhappy. After eight weeks, only a bestseller will make me sit up and go back and make a purchase. Which is the thing about Sargent's model: it's designed to reward bestselling authors, while penalizing everyone else."

St. Mary's County librarian Michael Blackwell, an organizer of the ReadersFirst Coalition, said the Macmillan change did represent one positive development: making copies available in two licensing terms (perpetual access at half-price, plus the metered model) shows that "flexibility" in offering models simultaneously is possible, something ReadersFirst has long advocated for. But Blackwell also took aim at Sargent's memo. "Some of Sargent's claims are preposterous and reflect a woeful lack of understanding," Blackwell told PW. "But after the Tor experiment, we saw it coming."

In her most recent PW column, Sari Feldman, executive director of the Cuyahoga County Public Library, warned librarians about the tenuous state of digital content in libraries. Sargent's memo, she says, has left her outraged. "John Sargent and Macmillan have given us no choice but to organize," she said, "and fight back."

Blackwell agreed. "What we clearly need is unified action. We need to organize, take our case to our readers, encouraging them to write for government action," he said. "Libraries are vital for promoting authors and their works, helping discovery of content that we would argue, yes, promotes sales beyond libraries. We want authors treated fairly. Librarians appreciate that changing business models with the coming of digital are a challenge for authors and, for that matter, publishers. But it is time for us not just to take a stand, but to ask our millions of readers to take a stand with us."

UPDATE: The American Library Association has released a statement on Macmillan's change in terms for libraries.

"Macmillan’s new model for library e-book lending will make it difficult for libraries to fulfill our central mission: ensuring access to information for all,” said ALA President Wanda Brown. “Limiting access to new titles for libraries means limiting access for patrons most dependent on libraries. When a library serving many thousands has only a single copy of a new title in e-book format, it’s the library, not the publisher, that feels the heat. It’s the local library that’s perceived as being unresponsive to community needs. Macmillan’s new policy is unacceptable. ALA urges Macmillan to cancel the embargo.”

In addition, Penguin Random House has shared the following statement: "In support of the invaluable contributions libraries make to our communities and the promotional opportunities they provide our authors, Penguin Random House U.S. continues to make our e-books available to library patrons the same day they go on sale at retail."