Artificial Scarcity: I attempt to identify the root cause of the #HCOD debacle

...the publishing industry has lost its technological monopoly on the flow of information. This means that libraries can no longer identify ourselves as purchasing collectives for containers of information.

#HCOD sturm und drang

There has been much sturm und drang in library-land over Harper Collins recent decision to limit ebook circulation of their titles. Harper Collins has decided that after the 26th time one of their ebooks has circulated, it will expire and the library will need to purchase a new copy. A New York Times blog ran a piece on it and Bobbi Newman (Librarian-by-Day) has an excellent digest of the conversation. It has certainly stirred a hornets' nest, but it remains to be seen whether this is itself a big deal, or whether it is merely a symptom of a deeper problem.

In circumstances like this one I tend to look for root causes and big picture solutions. This means that my contribution to the discussion should not be confused with practical, daily-running-of-the-library kinds of solutions. What I'm interested in sorting out is why is this happening and whatever is happening, where are we on the timeline of its progression? I've been trying to think and talk this issue out using twitter (@nnschiller) and my +/- 140 character response would be: Publishers are becoming an anachronism. Libraries risk the same if we single-source our content through the publishing industry. Phrased another way: The real problem can best been seen by analyzing artificial scarcity efforts. Neither really get at the core of the issue, so here is my attempt to connect some dots.

Artificial Scarcity is the real problem. (Or at least a significant manifestation of the real problem)

First things first, let me define some terms and set some background context. I make my overly broad statement about publishers and anachronism based on this analysis. We have publishers in our information streams because publishers originally provided two absolutely necessary services. First, they owned printing presses and employed highly skilled typesetters to run them. Second, they maintained logistical distribution systems that stored, shipped, and delivered the contents of those printing presses to libraries, bookstores, and readers. Publishers (those who make things public) were artifacts of Gutenberg's mechanical movable type printing press. They replaced the monastery and the scriptorum in the information stream. Today, with digital publishing and distrubution (henceforth referred to as "teh intarwebz"), wordpress (.org & .com) personal publishing platforms, and Amazon Kindle publishing; there are a multitude of examples of writers making their work public without the intersession of ublishers. Some are even profiting. So, while publishers may still provide value-added services, they are no longer absolutely necessary and appear to becoming less and less necessary as time passes.

Second, when I talk about artificial scarcity I am referring to attempts to make digital distribution model mimic the economic model of physical distribution systems. I could just say "DRM" or digitial rights management at this point and most of you would know what I'm referring to, but I think a deeper explanation will be helpful. The economic model of physical books is a familiar one. Objects are exchanged for money. In this specific case, distributors of books make their money by selling physical items and taking a percentage of the sale as profit. In this model, libraries purchased books from distributors because the distributors provided both the physical items and the logistics of printing, storing, and shipping them. This worked very well for a long time. However, when digital formats became valid media for the distribution and consumption of information, the basic math behind this relationship changed.

The model works for physical books because it is difficult and expensive to reproduce a physical book. This is why we do business with publishers, they have the means to do this well. However, it is easy to copy digital items. In fact, using a digital item requires making a copy. We copy it from the library's server to our computer, we copy it from our computer to our device, or we copy it from Amazon's database to our Kindle. That is one of the great things about digital items, we can make unlimited perfect copies of them. There is no inherent limit for the number of times any one book, song, article, or picture can be copied. This should be a good thing and I think it will be one day. The short-term problem is that it breaks the revenue model for publishers and content distributors. We all know the law of supply and demand. Prices change to account for changes in either supply or demand. Digital items, with ability to make unlimited perfect copies should then have the effect of bringing the prince per copy to near zero. This is great for consumers but a problem for businesses built on taking a percentage of the financial transactions in the information stream and a problem for the creators of information. We may still need their services, but 5% of free is no way to make a living.

The single biggest challenge of the digital information age has been to find a revenue model that acknowledges the properties of digital objects and still finds a way for creators to be rewarded for the value they create. We have a few stop-gap measures: freemium models, value-added services, giving the content away and selling the customers (the Google/Facebook model). There is also artificial scarcity: the popular method of trying to force digital objects to mimic the limitations of physical objects and thereby preserve economic balance destroyed by digital technology. Artificial scarcity is little more than an agreement for everybody to pretend that the digital revolution never really happened. It benefits the established print-based distributors but harms patrons and libraries. While we need, for now, publishers to remain profitable; does it make sense to sacrifice the benefits and promise of emerging digital technology in order to protect them? The core question appears to be: are you willing to limit patron access to information in order to shore up a failing business model for publishers? If the answer is yes, then #hcod isn't a problem for you. If your answer is no, our problems are a lot bigger than Harper Collins' expiring licenses or Overdrives byzantine barriers to access. In the end, the longer we are willing participants in the shared delusion of artificial scarcity, the harder it will be for us to craft a meaningful post-print role for libraries.

Artificial scarcity describes attempts by content vendors to make digital object mimic the physical limitations of physical objects. DRM (digital rights management) is the most recognizable example of an artificial scarcity effort. Since digital items break the economics of supply and demand, artificial scarcity is an attempt to force digital objects to behave like physical objects, losing their unique properties in the process. Simple artificial scarcity efforts include making it difficult to make copies of digital items, limiting the kind or number of devices that will "read" a digital item, or limiting the number of patrons who can access a digital library item at the same time. This makes it much more difficult for out patrons to access content. It doesn't have to be as hard as Netlibrary or Overdrive make it. There was a physical reason why books had these limitations, but there is no inherent reason for digital items to be subject to these limitations. No reason other than to protect a business model based on physical supply and demand. In other words, these artificial scarcity efforts protect publishers from having to develop working twenty-first century business models but they make accessing digital information much, much more difficult than it needs to be for library patrons and they restrict libraries from developing practices appropriate for today's technological environment.

My advice is to stop living in the past

The kindest thing I can say about artificial scarcity efforts is that they are not ultimately sustainable. The most unkind thing I can say about artificial scarcity efforts is that they involve librarians selling out their patrons to protect the publishers' bottom lines. The most accurate statement probably lies somewhere in the middle. Given that we do not have a viable alternative to publishers at this time, it doesn't make sense to say "since publishers will eventually whither away, like the state in Marxist ideology, we should give up on them now." That isn't practical. We know our patrons want what publishers sell. We also know that the alternative to publishers' content isn't yet fully arrived. I WANT to live in an open source, open access, "information wants to be free" environment, but I have to live in this world as it is today. Libraries aren't in a position to tell our patrons that open content, like broccoli, should be consumed because it is good for them and because we say so. We aren't in loco parentis over our patrons.

On the other hand, I think it absolutely necessary for librarians to come to grips with the idea that the publishing model that has been in existence since Johannes Gutenberg pressed his first bible is endangered. It is a service that has reached end-of-life in its product support timeline. Compare it to IE6: once this product was viewed as flawed but necessary. It is now officially obsolete, but it still carries such a significant install base that cannot be safely ignored. Likewise libraries cannot survive by completely ignoring print publishers or, more accurately, the print publishing model. But if we continue pretending that libraries are, by definition, groups that buy content from publishers and re-distribute it to our patrons, we, like the publishers, will soon find ourselves no longer needed. The network will interpret us as broken and route traffic around us.

So, even though we don't know what the future looks like, and really, we don't even know what the present looks like very well; we should stop acting as though the rules that governed the past still apply today. Libraries are full of very smart people trying to solve this problem. We should listen to them. I'm not suggesting we leap blindly after every new bleeding edge fad (Second Life reference anyone?) but we do need to recognize the necessary value of experimenting and trying new approaches until we figure out what works. This means that we need a higher tolerance for failure that we've accepted in the past. We have to be willing to make mistakes or else we'll keep doing what we already know how to do very well until we come to work one day and realize these services are no longer technologically relevant.

Harper Collins is not our enemy

After all I've said about obsolete business models, artificial scarcity and how these efforts are harmful to our patrons, I have come to realize that Harper Collins and Overdrive are not our enemies. This particular policy is crap and should result in no library buying products that the crap license applies to, but Harper Collins and Overdrive aren't our enemies. Libraries and publishers are actually in very similar situations right now. I've claimed that digital content and digital information streams do not require publishers to print or distribute them. Before I get too smug, however, it should also be noted that libraries are no better off in the context of digital content and digital information streams. At least, if we continue to subscribe to the tradition definition that states libraries are agencies that pool resources from a population, spend these resources to purchase content from publishers, and make this content available to our population of users. This role is one that developed in a print context. It will not exist unchanged forever. Going forward, our users will still need access to information, they probably will not need, or probably not need to the same extent, access to our collections of information. The question becomes: what are libraries if we are not our collections?

Libraries without collections

Here is where I realize that I have better questions than I have answers. I think I know where the answers can be found, but at this point of the conversation, I think it best to point to thinkers who have influenced me on this subject and ask what you all think about the issue. If libraries are to find a way to become more than just our collections, I think we need to read and understand Yochai Benkler's thinking on information and networks.

The key title is, I think, his The Wealth of Networks: how social production transforms markets and freedom The following titles all participate in some of the same ideas and all seem to stand on Benkler's shoulders in some way. They are also, incidentally, written for broader audiences and thus are more accessible.

Clay Shirky: Ontology is Overrated (text w/ images | podcast w/o images)

also: Here comes Everybody and the more recent book on the same theme: Cognitive Surplus

Larry Lessig: Ted Talk on the laws that choke creativity

David Weinberger: Everything is Miscellaneous

More from Benkler:

Conclusions, of a sort.

My conclusion here is that #HCOD isn't a problem in and of itself. Harper Collins has offered a license agreement that should be unacceptable to libraries because it doesn't serve our patrons' interests and connects our patron records with our vendors in a way that violates our professional ethics. That said, it isn't the real problem. It is a mistake that we should be tolerant of while refusing to play along with it.

What we really need to do is to figure out what libraries are after our collections stop being our raison d'etre. What happens as Google Books continues to offer digital access to the printed page? What happens when the economic value of digital items reflects their supply? One prediction I can confidently make is that our library collections, by themselves, will cease to be a reason to keep library doors open. I don't think that will happen soon or mean the end of libraries, but the publishing industry has lost its technological monopoly on the flow of information. This means that libraries can no longer identify themselves as purchasing collectives for containers of information. If there is another role for us, one that will be relevant in the future, I think we can find it in Benkler's work.


  1. Corey Murata 2011-03-01 at 10:51 AM

    Starting with your last question first, libraries are about discovery. Classification facilitates discovery, LCSH facilitates discovery, indexing and bibliographies facilitate discovery. I think we lose sight of this because at a time when the storage and transfer of knowledge was tied to a physical item we, out of necessity, became vast warehouses of physical items and created complex schemes for organizing those physical items. But the organization was not the end in itself, the organization was core to discovery.
    Connecting this to your discussion about the role of publishers, I would point to Shirky’s description of the shift from “filter then publish” to “publish then filter” models. In the “filter then publish” paradigm publishers fulfilled a third very important role, that of a filter to what can get published and make it into wide circulation. In that world, libraries were a second order filter. We could not possibly provide access to the entirety of published works so we provided access to those things that we determined would best fit our communities and created tools to discover other works that we did not or could not store (bibliographies, NUC).
    In the “publish then filter” world what was once a second order filter is now a primary filter. We cannot possibly compete with the engineering resources that goes into writing algorithms for Google or Bing. We cannot compete with the sweatshop level wages paid to contributors of content farms. We cannot compete with the just-good-enough (however mediocre) answers people get from, Yahoo Answers or Facebook Questions. Where does that leave us? I’ve thought a lot about it and I don’t know. The only thing I can say is the answer will come from us working together more than we ever have in the past.
    Regarding #hcod, I can’t say I’m surprised by Harper Collins and, sadly, neither am I surprised by the reaction, but I think we need to own up to the fact that in many cases we willingly gave up on first sale doctrine in the name of convenience a long time ago. We like to think we’re buying “things,” when what we’re actually buying is conditional use licenses. And, I’m not just talking about libraries. If anyone thinks they own that Kindle book that they bought should go back and look at the Amazon Terms of Use.
    I think we can move forward from this incident in useful and possibly even productive ways. However, drawing a line in the sand, as Cory Doctorow did, by saying we should not buy any DRM’d content will only result in the “published” e-content world being routed around libraries. (Insert here monologue about libraries/digital divide/educated electorate/etc.)
    By the way, I would add to your reading list, Code by Lawrence Lessig. The 2nd ed is a few years old but the concepts are still solid.

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