The Costs of Digital Licensing for Libraries and Readers
How the flawed system threatens budgets, access, and ownership
Introduction
As libraries across the country face potential budget cuts, many readers are starting to see the impact—especially with regards to digital materials like ebooks and audiobooks. But while the Trump administration’s decision to gut the Institute of Museum and Library Services (IMLS) has and will continue to impact public libraries, libraries were already facing rising costs for digital services. And the true impact of these digital licensing models extends far beyond monetary harm.
Over the past few months, readers have taken to social media to express disappointment—and even anger—with their local public library system: many have announced that they’d no longer be carrying Hoopla or, in some cases, Libby.
Hoopla and Libby (the latter which is owned by OverDrive) are two digital distribution services that libraries use to help get audiobooks, ebooks, tv shows, movies, and more to patrons (the platforms differ in their offerings). While patrons are able to access these valuable resources for free, they are not free, of course, for the libraries. And these distributors and publishers are charging libraries more than they can afford, resulting in their cancellation.
Now, this wasn’t always the case; in fact, digital materials at libraries used to operate very similarly to physical resources. A digital copy had a “life span” (say, for example, 100 checkouts) to mirror a physical copy’s decline. Once that audiobook was checked out 100 times, a library would buy a new copy. Copies could only be loaned out to one person at a time. But as digital reading and the demand for accessible reading materials grew, publishers shifted their models.
And it’s not just libraries’ budgets that are impacted; digital licensing also impacts what types of resources libraries can provide to patrons and how they provide them, as well as how readers purchase digital books from various services, like Amazon’s Kindle and Audible.
Settle in, readers, because in this issue, we’re taking a look at all things digital licensing: how libraries provide digital resources to patrons, AI copyright cases, and potential opportunities for censorship. It’s a longer read, but, as always, the more information we know, the better we’re able to fight for a more equitable reading ecosystem.
A Deeper Look
What are digital licensing models?
Behind every Libby hold or checkout is a detailed system catalogued by your library, Libby, and the publisher of the ebook or audiobook. Your library, just like you, does not own the copy (even though they pay for it). Instead, they essentially have it on loan.
Some publishers offer a license on a check out basis, so every time you check out a copy, your library gets charged. A few offer flat prices on specific catalogues. But by far, the most popular lending model is metered access: your library gets access to the product for a specific length of time before they have to renew. This is most commonly used in tandem with one user being able to access the product at a time (one-copy/one-user).
In a piece for NPR’s Book of the Day, journalist Andrew Limbong interviewed Lisa Wells, Executive Director of the Pioneer Library System in Oklahoma. According to Wells, “They have 88 copies of The Women in ebook format at $60 a pop. That comes out to $5,280, which Lisa will have to rebuy some of those copies 24 months after purchase if she wants to keep up with demand.”
$60 an ebook is just about two times more than the hardcover version, and three times more than a paperback. And, what most readers don’t realize is often when you check out a library book, whether or not you actually read it, your library is charged.
In the past few decades, especially coinciding with the pandemic, the demand for digital resources has skyrocketed. Audiobook listening continues to increase—2024 saw a 13% increase from 2023, and 2023 a 9% increase from the year prior (with at least 10% each year before that). And library budgets have not always kept up. Overall, state funding is down by 9.2%, and the overall local increase in funding is only up by .7%—the smallest change since 2015. As a result, some libraries have stopped carrying digital copies of bestsellers, or have cancelled Libby/Hoopla altogether, no longer able to afford the services (a quick online search of “Libraries cancel Hoopla” will show numerous press releases from local libraries, especially as cuts to the IMLS threaten their budgets). This can be life-changing for patrons, especially with regards to accessibility, income, etc.
(Now, some states have tried to regulate publishers’ licensing models and costs of digital materials. However, these have largely failed; only Connecticut has passed a bill, and this will only go into effect if a state or states with seven million residents successfully adopts similar laws.)
What else does digital licensing impact?
It’s not just the pricing causing issues; licensing models themselves are up for debate. Many publishers, authors, and libraries disagree on digital copyright laws and licensing regulations. Libraries want to be able to make as many resources freely available as possible, and have enough budget to do so. Authors and publishers want to ensure they are paid adequately for each reader picking up their book. Most, if anything, would agree they want to protect the integrity of these stories, too, preventing manipulation or, now in a world of AI, LLM training.
For this reason, many publishers put digital rights management (DRM) into place, a legal (and digital) framework that prevents readers from actually owning a digital copy. So, for example, on Kindle, a reader does not actually own an ebook they purchase…even though they’ve purchased it. They are, somewhat similar to a library, borrowing it from the distributor. That reader cannot (legally, although it can be done) download the copy of that book and read it on a different device.
With libraries, DRM helps limit how many folks can access a digital copy, how long they can access a copy, what devices a digital copy can be accessed on (ex: Amazon allowing Libby users to use a Kindle for their ebooks), and more.
Okay, not great…but isn’t DRM ultimately a good thing if it protects copyright?
A few months ago, when AI-giant Anthropic appealed a judge’s ruling that they were in violation of copyright laws for purchasing 7 million physical copies of books, training their LLM, and then discarding those copies (literally tearing the covers off and throwing them away—as if harming our environment with their AI tech isn’t enough), the American Library Association backed their appeal. Why? Not because, suddenly, they were on the side of this company’s desire to diminish art’s value, but because they’d seen copyright cases play out before. And when it comes to digital rights, they can be extremely difficult to prove.
In 2020, publishers sued The Internet Archive, a nonprofit based out of San Francisco that essentially acts as a digital archive of everything on the web (you may be most familiar with their Wayback Machine). But they also have archives of other digital resources, including books, audio recordings, images, videos, and more. As the pandemic began, the Archive launched a National Emergency Library.
Controlled Digital Lending is the idea that libraries can provide patrons with digital copies of physical books they already have in their collection (here’s a great breakdown from Penn Libraries). Librarians and archivists often champion this model, as it enables them to expand and further their services. They are less restricted by what publishers do or don’t decide to make digital versions of, and have the ability to loan out rare books, first editions, etc. While it often runs into conflict with copyright laws, because it involves making and distributing copies of books (here’s where those dots start to connect to Anthropic’s appeal), there are scholars out there who believe it’s legal—and that copyright laws should be tweaked to even further protect libraries.
The Internet Archive had been operating under this model for some time; if they had a physical copy, they also would make a digital copy. Both versions could not be on loan at the same time. When the pandemic led to lockdown, they removed this restriction. This upset publishers, resulting in Hachette v. Internet Archive, and after three years, publishers won the ruling. The Archive appealed, lost, and decided to not appeal to SCOTUS; and if they had, and lost, the ruling could potentially have regulated libraries even further. (Before this, there was also Authors Guild v. Google, Inc, which ruled that Google was exercising fair use laws when they copied millions of books without permission from authors or publishers—and that their providing of digitized copies to libraries also didn’t constitute infringement.)
Publishers and the various groups siding with them argued that the real problem is a lack of library funding. And we agree with that; but is that really the only issue at hand? Are these companies also weaponizing capitalism against a pretty socialist institution?
You mentioned censorship at the start of the newsletter; what does this have to do with that?
Because what happens when digital rights and censorship collide? What if our government decides—as they have with students speaking out for a free Palestine, schools housing books about equity and identity, or comedians refusing to pander to Charlie Kirk’s beliefs—that a certain book should no longer be sold? What if a publisher, sued by Trump for $15 billion, has to settle, and that involves pulling a book from publication? What if Jeff Bezos, who has already capitulated to Trump, decides to do so once again? DRM prevents readers from downloading or truly owning copies; censorship with DRM has the power to turn on and off access to whatever books are in a reader’s digital library, and a library’s collection for that matter. (An aside, but The Internet Archive is already working against this on the internet side of things, designated earlier this year as a Federal Depository Library—an increasingly important role as our government takes down various web pages, etc.)
Ways to Respond
So yeah, a lot going on when it comes to digital licensing; its impact radiates out, and intertwines with numerous issues in the library world and beyond. But the more we know as readers, the more we can make decisions that will benefit our public library system. So, knowing what we know, what can we do?
Support our libraries in conscious ways.
Do your research before you check out a digital product—because whatever you don’t read still costs your library.
September is Library Card Sign-Up Month! Get your library card, get your friends and family library cards.
Contact our representatives about library funding—at a local level, and at a federal as they finalize the 2026 IMLS budget.
We can also know more about the distributors we are utilizing at the library. We’ve shared before how KKR, the owner of Libby, supports the Israeli government’s illegal actions in the West Bank.
Keep educating ourselves.
Stay up to date on what’s happening in the digital licensing world. Follow authors such as Cory Doctorow and organizations like The eBook Study Group and The Internet Archive, who aim to make digital rights more equitable and transparent.
Look into what legislation has been introduced in our state to regulate digital licensing costs. Not seeing any? We can still call our reps and express it’s an important issue we hope they address.
Support companies that don’t utilize DRM.
To start, some ebooks on Bookshop.org are DRM-free (just look for the tag on the product page), and Libro.fm advocates for DRM-free audiobooks.
Create our own lending libraries to share widely with others.
Digital, print, you name it—we don’t know how extreme censorship will become…but it never hurts to plan.
Final Musings
This was a longer newsletter, so we appreciate you reading through all that! If you have any questions, or are interested in learning more about any specific element, please let us know in the comments.
Also on the topic of censorship: October 5-11 is Banned Books Week! We’ll be sharing content throughout the month (here and on Instagram) with additional resources on how to fight bans, the latest with censorship, and more. But in the meantime, take a moment to look up your school and/or library board’s next meeting and add it to your calendar.
We’ll be back in a few weeks with more. In the meantime, make sure to check out our reading-themed prints for a cause, free downloads (wallpapers, templates, and more), and our exclusive downloads for newsletter subscribers (with password newsletterdownloads). If you have any questions, comments, or concerns, don’t hesitate to get in touch via email, the comments below, or Instagram DM.
Xx,
ad astra
this is so informative and a useful resource to direct people to—was literally discussing this exact thing last night with my in-laws and just sent it to them!
$60 seems like an outrageous price to pay per ebook read. How does supply and demand play into this? If libraries all just refused to pay, would publishers be forced to reduce the price? I have a suspicion this wouldn't work in reality, but can't really explain why, so am curious for your thoughts!