New Study Links Library E-Book Lending to Decline in Retail Book Sales

The Association of American Publishers (AAP) and the Authors Guild have released a new empirical study asserting that the growth of e-book lending in public libraries is directly undermining the commercial health of the publishing industry. Titled "An Empirical Study of the Impact of Library E-Lending on the Book Economy," the report was conducted by Secretariat Advisors and serves as a direct response to a wave of state-level legislative initiatives aimed at regulating how publishers negotiate digital content agreements with libraries. The central finding of the research is that increased access to e-books through library channels is consistently associated with a statistically significant reduction in retail sales of books, effectively supplanting print and digital purchases rather than expanding the overall market.

The timing of the report’s release coincides with ongoing political debates in several U.S. states regarding the balance between public library access and intellectual property rights. As lawmakers in Connecticut, New Jersey, and Illinois consider or implement new regulations, the AAP and Authors Guild argue that government intervention in the pricing and distribution of e-books and audiobooks would further damage the commercial ecosystem. The study predicts that any legislative requirement to lower e-book prices or alter licensing terms would cause additional harm to publishers, authors, and booksellers by distorting the natural market dynamics that sustain the industry.

The authors of the report acknowledge the critical role libraries play as public institutions, noting that collection budgets have not seen meaningful increases even as state and local governments expect libraries to provide both print and digital formats to their communities. However, they contend that imposing government controls on the purchase and pricing of digital materials would undermine the commercial marketplace. Specifically, the report argues that such mandates would demand more digital copies for libraries at lower costs immediately upon first publication, a practice that shows little regard for the broader economic ecosystem that supports the creation and distribution of books.

In a joint prepared statement accompanying the report, AAP President and CEO Maria Pallante and Authors Guild CEO Mary Rasenberger emphasized that fully funding libraries should be an urgent priority for lawmakers. They stated that both organizations stand firmly behind efforts to increase taxpayer funding at every level of government and support new ideas for private sector support. Pallante and Rasenberger argued that the mission of libraries and the intellectual property rights of authors and publishers are equally invaluable to the public interest and should not be viewed as a tradeoff. They further noted that state governments lack the constitutional authority to contradict the national copyright system, which is the exclusive province of the U.S. Congress, referencing a 2022 Federal Court decision that blocked a similar Maryland library e-book law.

Despite the legal challenges faced by previous legislative attempts, the new laws in Connecticut and pending bills in New Jersey and Illinois are drafted to avoid the specific copyright issues that led to the overturning of the Maryland effort. For instance, the Connecticut law focuses on barring libraries from entering into contracts with terms that run counter to the library’s mission, thereby sidestepping direct conflicts with federal copyright law. However, the study’s authors argue that changing the legal language of these bills does not alter their potential negative impact on book sales. The research indicates that the core issue remains the substitution of commercial sales with library lending, regardless of how the legislation is framed.

The data presented in the report highlights a significant shift in library expenditures over the past two decades. In 2023, public libraries held approximately 650 million printed materials and 1.5 billion electronic materials. Library spending on electronic materials in the U.S. increased sharply from $125 million in 2006 to $673 million in 2023. In contrast, expenditures on printed materials fell from $900 million in 2006 to $751 million in 2023. The sharpest year-to-year decline in print spending occurred in 2020, with a 13.6% drop that coincided with the pandemic, a period that also saw a surge in digital adoption.

The study also challenges the common argument that libraries primarily serve as a tool for "discoverability," which proponents of e-lending often cite as a benefit to the industry. Citing a report based on usage data from the Seattle Public Library, the authors found that shifts favoring e-book lending are strongest earlier in a title’s lifecycle and when print usage is already high. The authors conclude that these patterns are consistent with genuine format substitution, meaning that library e-book share is not associated with book discovery or market expansion, but rather with readers choosing a free or low-cost library option over a paid retail purchase.

To address the ease with which e-books can be ordered from home, which has been a key driver of the growth in e-book lending, the study suggests introducing "friction" into the process. One proposed tactic is "windowing," which involves delaying the release of e-books for library lending or requiring a delay before they become available. The authors cite a 2025 European Commission report that acknowledged the challenges e-book licensing models present for public libraries but held that windowing practices are necessary for rightholders to protect other revenue streams and maintain the balance of rights. The study suggests that windowing could be a potentially effective licensing option in the U.S. to mitigate the negative impact on commercial sales.

The report concludes that the future of books across all formats will not be determined by state legislative actions but by ongoing private sector innovation. The authors argue that more numerous and varied business models, resulting from nimble and competitive marketplace negotiations, are essential for the industry's health. They expressed the view that debates in the states, which they described as frequently accompanied by misinformation about law and facts, have not assisted discussions between licensors and licensees but have instead polarized and confused them. The AAP and Authors Guild maintain that protecting the commercial marketplace is vital to sustaining the diverse and robust book ecosystem that serves readers in both print and digital formats.