Thread by @kidsilkhaze

I want to dig a little deeper into the numbers that @OverDriveSteve shares in this post about how people use Macmillan ebooks at their library.

@OverDriveSteve Now, in justifying their campaign against libraries, @MacmillanUSA claims that 45% of their ebooks reads come from libraries and not private sales (remember though LIBRARIES PAID A LOT OF MONEY FOR THAT BOOK. They got a lot of $$$ for it.)

@OverDriveSteve @MacmillanUSA We have no idea how Macmillan gets that number, unless Amazon is sharing data (and lets face it, Amazon never shares its data)

As I've discussed earlier, best guess is that Macmillan thinks each book purchased gets checked out 52 times.

@OverDriveSteve @MacmillanUSA Macmillan licenese expire after 2 years or 52 checkouts, whichever comes first.

EVEN IF a book were popular enough to be continuously checked out for 2 years (most books aren't that popular for that long) the way most systems are set up, you can't hit 52 in 2 years.

@OverDriveSteve @MacmillanUSA According to OverDrive's data, 79% of ebooks expired at the 2-year limit, not the 52-checkout limit.

SEVENTY NINE PERCENT.

@OverDriveSteve @MacmillanUSA OverDrive also knows how many times those books checked out. (It has no idea if they were opened or read, but it knows they were checked out.)

The average Macmillan title checked out 11.5 times before needed to be repurchased.

Libraries paid $60 for 11.5 checkouts

@OverDriveSteve @MacmillanUSA And that 11.5 number has some HUGELY popular titles that are skewing the stats.

75% of Macmillans titles circed for 8.3 times.

Libraries paid $60 for 8.3 checkouts.

@OverDriveSteve @MacmillanUSA So, let's do some math.

Libraries are paying an average of $5.20-$7.22 per checkout.

Macmillan sells its Tor novellas to private consumers for $3.99

Hardcover frontlist is the most expensive and is usually $14.99

@OverDriveSteve @MacmillanUSA Now, I don't know what their balance is between Hardcover frontlist sales and less expensive midlist and discounted backlist.

I have no idea what their average ebook sale is. But I'm guessing it's around the same price libraries are paying on a per check-out basis.

@OverDriveSteve @MacmillanUSA And here's the thing? For their 8 week embargo to make them more money?

Maaaaaybe 3 people can check out 1 ebook during an 8 week period.

But 4 people would have to purchase the book at $15 to make up for 1 lost library sale.

@OverDriveSteve @MacmillanUSA THEIR MATH DOES NOT MAKE ANY SENSE.

But it's seriously fucking over libraries (guaranteed repeat customers!) people who use libraries, and their authors.

@OverDriveSteve @MacmillanUSA ALSO! People don't buy ebooks at prices that high.

@JenReadsRomance has been spending A LOT of time this year looking at how ebook price effects sales. At least in romance, only 75% of bestsellers were under $6

kirkusreviews.com/features/readi…

@OverDriveSteve @MacmillanUSA @JenReadsRomance Ugh. Got on my roll and never actually linked to @OverDriveSteve 's post where he shares all that data:

overdrivesteve.com/macmillan-publ…

@OverDriveSteve @MacmillanUSA @JenReadsRomance Ok, so let's look at the PW article about the CEO of @MacmillanUSA meeting at COSLA (Chief Officers of State Library Agencies)

Once again, the math doesn't add up

@OverDriveSteve @MacmillanUSA @JenReadsRomance Here's the article!

publishersweekly.com/pw/by-topic/in…

@OverDriveSteve @MacmillanUSA @JenReadsRomance Here's the part I'm really going to dig into:

"... based on “anecdotal” data, Macmillan believes that “if library users cannot gain access to a new e-book from their library, 8% of those waiting will likely buy the e-book.” "

@OverDriveSteve @MacmillanUSA @JenReadsRomance Now, leaving aside the fact that the plural of anecdote isn't data, the 8% number is something I buy.

As librarians have been saying all along, the vast majority of people won't go out and buy a book, they'll read something else.

8% seems believably low enough.

@OverDriveSteve @MacmillanUSA @JenReadsRomance But... 8% is really low, and when you look at the difference in prices consumers and libraries pay, 8% will not make them more money.

If only 8% buy the book, Macmillan is leaving money on the table.

@OverDriveSteve @MacmillanUSA @JenReadsRomance King County Public Library is boycotting Macmillan as a result of this. So let's look Ninth House, one of Macmillan's current bestsellers.

Right now, at @KCLS there are 282 holds on 55 ecopies (purchased pre-boycott)

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS 8% of 252 is 22.56. Let's round up to 23.

Macmillan would give up 55 sales for 23.

They'd leave 32 sales on the table. How will that make them money?

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS Even worse? Libraries pay $60 for their ebook copies. Amazon charges $14.99

So, Macmillan would walk away from $3300 because they can get $345 instead.

DO THEY NOT OWN A CALCULATOR?!

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS As we discussed yesterday (upthread) Macmillan is operating under the delusion that every ebook a library buys gets checked out 52 times (it doesn't, but we'll get into that later)

Let's say 8% of those 52 people bought the book instead.

That's 4.16 people.

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS Macmillans most expensive ebooks are $14.99. Let's say each of those 4.16 people bought a book at that price point.

That's... $62.36

That's a whopping $2.36 more than selling that 1 copy to a library.

Is it worth the bad PR and boycotts?

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS Let's look at some other realities. As discussed yesterday, 79% of Macmillans books DO NOT circulate 52 times.

The actual average is 11.5

8% of 11.5 is .92

That's not even 1 copy sold! How does that recover the $60 lost in library sales?!

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS And that 11.5 number? There are a few big titles skewing the stats. 75% of Macmillan's library ebooks circulate 8.3 times.

If 8% of those circs converted to sales? That's .66

You're walking away from $60 because for .66 of a sale?

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS HERE'S WHERE IT GETS MORE INFURIATING.

Holds ratios.

Libraries don't like it when their patrons have to wait forever for a book. We have holds ratios--how many holds we allow per copy. Too many holds, BUY MORE COPIES.

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS Now every library has a different holds ratio, depending on what their budget can handle. I did a survey and rough average is 7.5

That means for every 7.5 people waiting for a book, libraries buy another copy.

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS SORRY. I just deleted my last 2 tweets, because I messed up the math.

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS Ok, say 100 people are waiting for a book. With a 7.5 holds ratio, libraries would buy 13.3 copies. (100/7.5)

At $60/each, that's $798

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS If 8% buy instead of wait, that's 8 sales. At $14.99 (their HIGHEST price point, not their average one) that's $119.92

That's 5.3 fewer sales and a loss of $678

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS In my survey, I also asked what ratios were on print books. 7.5 was the holds ratio for ebooks. It's 5.36 for print.

The lower number is because we can afford to buy more in print, because it's so much less expensive.

Lower prices = libraries buy more!

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS Macmillan's embargo

1. Loses them massive amounts of sales AND even more money
2. Pisses off libraries, who are frequent, repeat, loyal customers
3. Is BAD for their authors. Really, really bad.

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS And I know it's hard to measure the role libraries play in the publishing economy but...

If we weren't a major player, why do they have positions that are JUST about marketing to schools and libraries?

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS My job is Collection Engagement Librarian.

Part of my job is buying books, but a big chunk of it is telling our users about awesome books they want to read and training my coworkers to do the same.

The part of my job where I'm not spending money on books, I'm creating demand.

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS When I say all I want to do is buy your book and then tell people to read it? I'm serious. That's my job.

When we put up staff picks on our website? Holds shoot up. We frequently have to buy additional copies to meet demand.

@OverDriveSteve @MacmillanUSA @JenReadsRomance @KCLS So why make it so freaking hard? Why make it so I can't buy your book, either through embargo or exclusivity deals (Amazon imprints, I'm looking at you) or just pricing yourself out the market?