February 16, 2018

Rachel Yu and the Monetization of Library Loans

As a person who cares deeply about public libraries, Rachel Yu worries me. Let me emphasize this is not about Rachel personally. She must be a bright and talented young lady because she is only 16 and already a successful author.

Rachel self publishes through Amazon’s Kindle Direct Publishing Program, and her books can be borrowed through the Kindle Owners’ Lending Library.

So, Rachel, at a tender age, has developed a constructive relationship with a company that publishes her books and distributes them to buyers and borrowers. Sale or loan, Rachel makes money, because, on top of royalties from sales, Amazon pays writers every time their book is loaned.

In December, that translated to $1.70 per loan, and for Rachel, that meant 3,647 loans or $6,200.

So, even as public libraries tussle with the criss-cross of debates about ebooks, even as large publishing houses sniff at the idea of public libraries lending ebooks, Amazon has further vexed the library groundwork with this disruptive idea — royalties for borrows.

“It’s so cool to be part of the success of KDP Select,” Rachel said in a statement released by Amazon. “It’s just like a library but with easier access. There’s truly no other opportunity like Amazon for self-publishing.”

She neglected to mention, in addition to the easier access, the pot of money for loans, which is $700,000 for January.

A library loan, until now, was not a financial transaction with an immediate profit for an author. At best, a loan held out the hope of future sales and royalties (and Kindle authors who loan do see greater sales than those who don’t).

Now, the loans themselves have been monetized, provided Amazon’s neo-library does the lending and the writer agrees to keep the digital format of the book exclusive to Amazon for 90 days.

Why should a writer like Rachel or an independent publisher stray from this enticing ecosystem that pays them for a loan as well as a sale, regardless of how long the exclusivity lasted? Maybe these authors practice altruism. Maybe they appreciate the role of public libraries in a free society. Then again, maybe they don’t.

The raison d’etre of the first sale provision of Section 109 of the Copyright Act is, in part, to remove from the governing principles of library loans the generosity or self-interest of a copyright owner. However, in the digital realm, where libraries don’t own books but rent them, the rights under first sale are alienable — by Rachel or by Amazon.

My particular worry here is that self-published authors like Rachel, with popular careers in embryo, will identify their now prevailing rights and financial well-being as inseparable from Amazon’s, their lucrative mother ship. They will see Amazon’s exclusive library as the best of all possible libraries for their books.

How can a supporter of the local public library, which might also want to lend such books, convince them otherwise?



Michael Kelley About Michael Kelley

Michael Kelley (mkelley@mediasourceinc.com) is the former Editor-in-Chief, Library Journal.



  1. In some countries (like the UK) ‘Public Lending Right’ (PLR) payments are made to directly (by the PLR agency not libraries) to authors on the basis of (public) library loans. So here library loans are already monetised. Payments are modest Payments are not made for ebooks as yet. Maybe a modified form of PLR could be part of the business model for ebooks?
    See http://www.plr.uk.com/
    ‘Over 23,000 writers, illustrators, photographers, translators and editors who have contributed to books lent out by public libraries receive PLR payments each year’.

  2. I was about to say the same thing as Ken Chad – public lending right is well established in a number of countries – 28 at the last count, including Canada, just next door. Hardly a novel disruptive idea, then! At least with Amazon paying the author a small ‘borrowing’ fee, the money doesn’t come out of public funds – and why shouldn’t the author benefit from a loan, from which the lender gains income? It’s directly analogous to the performance rights concept in music.

    • Michael Kelley Michael Kelley says:

      Good point. But it doesn’t change the fact that it’s new in the U.S. And I’m assuming you got that 28 number from the Wikipedia article on “Public Lending Rights,” which also notes that the International Federation of Library Associations (IFLA) does not favor the principles of ‘lending right’ because they “can jeopardize free access to the services of publicly accessible libraries, which is the citizen’s human right,” and that is the main point I am trying to make. It’s not begrudging the author the payment; it is asking how will a public library gain access to these works?