E-book sharing: Amazon and book publishers' stupid attempts to curtail lending sites.

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March 22 2011 5:41 PM

No Sharing Allowed

Amazon and book publishers' stupid attempts to curtail e-book lending.

Illustration by Robert Neubecker. Click image to expand.

As convenient as they are, I've long worried about the many ways in which e-book purveyors restrict readers' rights. You can't resell the books you purchase for the Amazon Kindle, and you can't read them on most other e-readers. We also don't really own e-books in the same way we own paperbacks—Amazon has gone as far as remotely deleting titles from users' devices.

Lendle, a web clearinghouse for people who want to loan out and borrow Kindle books, tries to make lemonade out of this sour situation. Many Kindle titles can be loaned out once for a 14-day period. When you sign up for Lendle, you tell the site which books you have in your Kindle library. The more books you put up to lend to other people, the more books you're allowed to borrow. Everybody wins, right?

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Not according to Amazon. On Monday, Lendle's co-founder Jeff Croft got a surprising letter: Amazon said it was cutting off Lendle's access to the company's e-book database. Since Lendle can't run without access to Amazon's listings, this move effectively shutters the site. Amazon didn't do much to explain its reasoning—in its letter, the company said Lendle did not "serve the principal purpose of driving sales of products and services on the Amazon site." While Amazon has not responded to my inquiries as of press time, two other book-lending sites told me they still have access to the database. "The news for Lendle looks troubling," said Anna De Souza, a spokeswoman for eBookFling, "but everything is looking OK for us for now." And Catherine MacDonald, the founder of BookLending.com, e-mailed to say her site "has had and continues to have Amazon API access and everything is business as usual for us." This suggests that Amazon might have shut down Lendle for narrow technical reasons. So far, though, the company hasn't told Croft what those reasons are or what Lendle should do to restore access to the database. [Update, March 23: Lendle is now back up and running. Indeed, as I suggested earlier, it seems Amazon restricted Lendle's access to its database for narrow technical reasons  that have now been resolved.]

Croft suspects there's something else behind Amazon's decision—that book publishers are pushing Amazon to limit e-book lending. That seems plausible. Publishers have long been wary of letting people share digital content. Indeed, they demanded the right to disable sharing for any book in the Kindle or Barnes & Noble Nook stores. Publishers haven't been shy to take advantage of that right. By my count, just three of the top 10 books in Amazon's Kindle store (as of Tuesday morning) are lendable. Things get worse when you move to the more expensive books on the New York Times bestseller list. Not a single one of the top 10 books on the  Times' hardcover fiction list is lendable, and just one of the top 10 books on the nonfiction list can be loaned out—Pope Bendedict's biography of Jesus (and perhaps that's only because he was known to have strong feelings about charity).

These restrictions are misguided. They're bad for readers, they're bad for authors, they're bad for e-book stores, and they may even be bad for publishers. Of course, the ways in which our rights get chipped away as we move away from analog content is a constant worry in the digital age. I'm not the first pundit to note how terrible it is that we can no longer share, resell, or modify the books, movies, and video games that we get over the Internet. But the sharing restrictions that publishers have placed on e-books strike me as particularly stringent, a rule that underlines how we'll mourn physical media when it goes away. Under Amazon's and Barnes & Noble's sharing model, you're allowed to loan out a book just once, for two weeks, and while it's loaned out, you don't have access to it. The fact that publishers can't stomach even this milquetoast model should have us scared for a future in which physical media loses its primacy.

Perhaps publishers will relent when they realize that lending and borrowing could increase sales. A raft of economic studies shows that secondary markets improve the market for new goods. This makes intuitive sense: You'll be more likely to buy a new car if you know you're allowed to resell it later; indeed, you might even pay more for a car with higher resale value. This model has been shown to apply to print books, too. In a 2005 paper, researchers Judith Chevalier and Austan Goolsbee (now the chairman of Barack Obama's council of economic advisers) showed that when buying textbooks, students take into account the resale value and the likelihood of new editions. Another study showed that Amazon's introduction of used books increased the online store's overall book sales. Why? Because, as economist Hal Varian once explained, there seem to be two different markets for books—some people like to buy new books and others like to buy used books.

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