Library Demand for E-books and E-book Pricing: An Economic Analysis

This paper provides an economic analysis of the market in which libraries acquire electronic books (e-books) from publishers. It first analyses the differences between print and e-books and explains how these differences affect the willingness of libraries to pay for e-books. Next, it extends the analysis to consider how this willingness to pay is affected by the restrictions imposed by some publishers on the use of e-books by libraries, such as restrictions on simultaneous and total usage and on the duration of usage. It also analyses the effect of publishers' adoption of 'pure metering,' in which libraries would pay a publisher each time they lend an e-book to a patron. Finally, the paper analyses how the fact that readers can substitute direct purchases of e-books with borrowing from a library affects the behaviour of publishers.