Should authors have concerns about e-book lending?

Part One of this article received so little response I’m doubtful there’s reason to post the second, but for the one or two people who might be interested, here you go. As promised, I’ll tell you why I had doubts about two of the e-book lending sites I found. In a word … money.

I won’t name these two sites, or link to them, because I don’t want to publicize sites I have reservations about. If you search out e-book lending sites, I suggest you read their policies carefully and make up your own mind.

One site uses a credit system: each book you lend entitles you to borrow one book. BUT, if you don’t want to lend your e-books, you can buy a credit for $2.99. Wait! Isn’t that an illegal resale? What about the licensing agreement you make with Amazon and Barnes & Noble when you purchase an e-book? Well, you see, the site owners didn’t buy the book, they didn’t “sign” that agreement. They’re just acting as the middleman.

And never mind that thousands of authors, myself included, have e-books priced at $2.99, and by the reader paying the owners of the site for the book instead of Amazon or B&N, the author gets cheated out of a royalty. Hush, silly author. Quit being petty. Just consider the word of mouth potential.

The other site I have bigger doubts about. I’m not concerned about the way they operate the actual book loan, which uses the lending features of the Kindle and Nook, but I have questions about their policy of asking the lender to request the borrower pay for this loan—not pay the lender, but the site owners. The borrower has the option to pay the requested amount, or more, or less, or nothing at all.

The homepage blurb states that “100% of profits in 2011 go to charities promoting childhood literacy” and in one section of their Guide it tells the lender to enter “the amount you’d like to see a borrower contribute to charity for this book.” However, I could find no statement of what percentage of the money they collect is considered profit. What if you pay $3 for the book and only 3 cents of that goes to charity? Would you feel deceived?

Sprinkled throughout this site’s user guide and FAQ are statements that are somewhat misleading, such as these (emphasis mine): “We hope that you’ll be willing to pay something to support our cause, support the authors who bring us such great books, and do some social good!” And, in answer to the question why they don’t set a price for borrowing, they say, “Because it would likely lead to market fragmentation as other markets arose to compete on price, decreasing the benefit of secondary markets to consumers searching for a specific book and authors who deserve compensation for the content they create.

Am I wrong, or does that sound like they are sending the deceptive subliminal message that authors receive a portion of the fees borrowers pay?

If you read their FAQ, you’ll see that their aim is to see Amazon and B&N change their policies to allow reselling of Kindle and Nook books. They say (emphasis mine): “By contributing to eBook Exchange when you borrow a book, you’re helping us work to change that.” My question—how? How would my paying eBook Exchange any amount of money to borrow a book change the licensing agreements?

Again in their FAQ, they state: “Ultimately, by opening up the ebook licensing restrictions that publishers currently impose, we’ll be able to make ebooks available to an expanded number of markets. We’ll be able to reduce ebook prices to many while helping authors earn more.” Truly, helping authors earn more sounds good to me, but I find it hard to believe a third party is interested in helping me earn more. Helping themselves earn money off my work … yeah, I believe that.

Am I missing something? Please, if I’m too dense to see how this is in my best interests as an author, help me understand.

To be clear, I am NOT identifying the above sites as bit torrent piracy sites. For now, they only exchange books through the authorized lending features at Amazon and Barnes & Noble. But the whole issue of e-book lending or selling makes me nervous for one good reason—abuse. How so?

E-books are intangible.

If you buy a print book, you have the right to loan it out. You buy one book, you loan one book. Of course, assuming it’s returned, you can loan it out more than once, but look at the most popular print book you own and tell me how many times you’ve loaned it out over the years. Three, four, ten times? Fair enough. An author would consider that word of mouth.

Now, consider the forums where, via email attachments, people trade files copied directly from their e-readers. Disregarding the licensing statement they agreed to when they purchased those e-books, they say, “I have the right to loan out my print books to as many people as I want, so what’s the difference?”

Let me tell you the difference. If you share your “e-book shelf” on one of these unscrupulous trade sites, how many times do you think you’ll be “loaning” each of those books? Not three or four. Not even thirty, forty. A hundred times? A thousand? Where’s the limit?

Bit torrent (peer-to-peer) sites essentially force e-books into public domain—meaning the authors receive not another penny for their hard work after that initial sale. And yes, people do that with music files too, but most musicians make the bulk of their income from live performances and merchandising. Only the big-time authors make real money from public speaking engagements.

As for reselling books, that’s a bit different. Reselling a print book is still within the realm of word of mouth. Books deteriorate after awhile, so its resale can continue for only a limited time. BUT e-books don’t deteriorate. If sites spring up to resell ebooks with no licensing limits, they could duplicate and sell as many copies as they want.

How is that fair to the author? That goes beyond “word of mouth”. That’s theft.

I perused one of these bit torrent book sites once and read an author’s plea after finding her e-book available for unlimited free download. She asked that it be removed and tried to explain that writing was her career and unlimited “sharing” deprived her of income. The response? They told her to go f**k herself!

What say ye?