The growing costs of digital libraries

On the day that the New Yorker magazine published An App Called Libby and the Surprisingly Big Business of Library E-books by Daniel A. Gross, the major New Zealand internet infrastructure provider Vocus was hit with a DDoS [Distributed Denial Of Service] attack which took its internet service down for about an hour, leaving hundreds of thousands of New Zealanders working from home – or wanting to read on line – without access to their essential connections.

On the same day over a million Americans, from Louisiana to New Jersey, were without power because of the damage done by Hurricane Ida to their homes and electricity infrastructure. A week later only one quarter of New Orleans had its power restored, and it was expected to take another three weeks before the whole state of Louisiana was reconnected. So no internet access for them either.

Are cyber-attacks rare and infrequent? Is the climate changing and bringing more extreme weather events more frequently, taking out essential infrastructure? Is the Pope Catholic?

In the light of these physical realities, it was interesting to read in Gross’s article that Big Tech now has a new business model which is extremely lucrative for the tech companies – and expensive for the ratepayers and taxpayers who fund public libraries. It works like this:

“The sudden shift to e-books had enormous practical and financial implications, not only for [digitising company] OverDrive but for public libraries across the country. Libraries can buy print books in bulk from any seller that they choose, and, thanks to a legal principle called the first-sale doctrine, they have the right to lend those books to any number of readers free of charge. But 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 [they] 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,” Michelle Jeske, who oversees Denver’s public-library system, told me. Digital content gives publishers more power over prices, because it allows them to treat libraries differently than they treat other kinds of buyers. Last year, the Denver Public Library increased its digital checkouts by more than sixty per cent, to 2.3 million, and spent about a third of its collections budget on digital content, up from twenty per cent the year before.” …

… “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. As libraries and schools have transitioned to e-books, the company has skyrocketed in value. 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.”

If you can afford an internet connection and an e-reader, and you don’t mind your rates and taxes contributing to the hundreds of millions of dollars the Big Tech middlemen are raking in, then the convenience of digital library books will probably appeal. But to anyone subjecting this supposed convenience to a reality check, it looks more and more like a Faustian bargain.

Book Guardians Aotearoa knows that studying the vulnerabilities and hidden costs of the current internet and electricity systems and assessing the likelihood that these will increase in the near future as cyber-criminals ramp up their lucrative activities, and extreme weather events become more common, is probably way above the pay grade of the current managers of the National Library. But is it too much to expect that their managers in the Department of Internal Affairs (all on six figure salaries) could and should do a much better job of examining physical and economic realities and taking steps to protect New Zealand’s knowledge baskets accordingly?