Executive Overview
A escalating economic and legal battle between the publishing ecosystem and public library systems has reached a critical juncture. The Association of American Publishers (AAP) and the Authors Guild have jointly released a landmark economic report revealing that the rapid rise of public library e-book lending directly cannibalizes print and retail book sales. Conducted by Secretariat Advisors and titled “An Empirical Study of the Impact of Library E-Lending on the Book Economy,” the comprehensive study delivers an empirical rebuke to legislative efforts aimed at regulating digital library licensing terms.
The report arrives as state legislatures across the United States—including Connecticut, New Jersey, and Illinois—draft or enact measures to force book publishers into offering discounted, perpetual, or mandatory digital licenses to public libraries. According to the study’s primary authors, Dr. Jéssica Dutra and Dr. Robert Stoner, government-imposed price controls or compulsory licensing schemes would severely destabilize the commercial marketplace. By requiring publishers to supply unlimited or heavily discounted digital copies immediately upon publication, such mandates threaten the financial viability of authors, independent booksellers, and publishing houses alike.
At the core of the conflict is a fundamental shift in consumer behavior and library acquisition strategies. While public libraries face chronic budget constraints, their shifting prioritization from physical inventory to frictionless digital lending has altered book consumption. The AAP and Authors Guild argue that forcing commercial publishing into state-level regulatory frameworks undermines national copyright laws established by Congress, ultimately jeopardizing the creation of new literary works.
Detailed Chronology
2006–2019: Early Expansion
• Digital library spend expands slowly ($125M in 2006).
• Print remains dominant ($900M spend).
• Publisher-library digital licensing frameworks begin to evolve.
2020: The Pandemic Tipping Point
• Physical library closures trigger massive surge in digital lending.
• Print spending drops 13.6% in a single year.
• Digital consumption habits permanently accelerate.
2022: Federal Court Sets Legal Precedent
• Maryland enacts law forcing publishers to license e-books to libraries.
• Federal Court strikes down Maryland law, citing preemption by U.S. Copyright Act.
2023–Present: Legislative Pivot & Economic Impact Report
• Public library digital spending reaches $673M; print spend falls to $751M.
• Digital catalog holdings balloon to 1.5 billion items vs. 650 million physical books.
• States (CT, NJ, IL) introduce revised "contract-focused" e-book bills to bypass federal copyright preemption.
• AAP and Authors Guild publish Secretariat Advisors study opposing state controls.The Transition Era (2006–2019)
Over the past two decades, the book trade transitioned from an overwhelmingly physical supply chain to a dual print-digital ecosystem. In 2006, public library expenditures on electronic resources totaled a modest $125 million, while physical print acquisitions dominated at $900 million. During this period, publishers experimented with various digital library business models—including metered access, limited checkouts, and timed licensing—to balance institutional access with retail sales.
The Pandemic Shift and Maryland’s Legal Challenge (2020–2022)
The COVID-19 pandemic dramatically accelerated digital adoption. With physical branches closed, public libraries redirected substantial budget allocations toward e-books and digital audiobooks. In 2020 alone, library expenditures on physical print dropped by 13.6%, marking the sharpest single-year decline in recent history.
Seeking to institutionalize free, unrestricted digital access, the state of Maryland passed legislation in 2021 requiring publishers to offer digital titles to public libraries on "reasonable terms" concurrently with retail release. The Association of American Publishers filed suit, culminating in a pivotal 2022 Federal Court ruling. The court struck down the Maryland statute, ruling unequivocally that state governments lack constitutional authority to override or dictate terms under federal copyright law, which remains the exclusive domain of the U.S. Congress.
The Current Legislative Wave (2023–Present)
Undeterred by the Maryland decision, library advocacy groups and state lawmakers shifted their legislative strategies. Rather than regulating copyright directly, emerging bills in Connecticut, New Jersey, and Illinois target commercial contract law. The Connecticut legislation, for instance, seeks to prohibit state libraries from entering into license agreements that contain terms deemed contrary to a library’s public mission.
In response to this contractual workaround, the AAP and Authors Guild commissioned Secretariat Advisors to conduct an empirical analysis evaluating the macroeconomic consequences of expanded digital lending and state-level market interventions.
Supporting Context & Metrics
The Secretariat Advisors study challenges several long-held assertions by library advocates, providing concrete data on collection trends, spending shifts, and sales cannibalization.
Shifting Library Expenditures and Collections
The study highlights a stark realigning of public library acquisition budgets toward digital holdings over the past decade and a half:
| Metric | Year 2006 | Year 2023 | Net Change |
|---|---|---|---|
| Library Spending on Electronic Resources | $125 Million | $673 Million | +438.4% |
| Library Spending on Physical Print | $900 Million | $751 Million | -16.5% |
| Public Library Print Inventory | N/A | ~650 Million Units | N/A |
| Public Library Electronic Inventory | N/A | ~1.5 Billion Units | N/A |
By 2023, public library holdings of electronic materials surged to approximately 1.5 billion items, dwarfing the physical print catalog of roughly 650 million items. This surge reflects systemic reallocation of capital, even as total library procurement budgets remained relatively flat in real terms.
Public Library Expenditure Trends (2006 vs. 2023)
Electronic Spending:
2006: [$$] $125M
2023: [$$$$$$$$$$$$$$$] $673M (+438.4%)
Print Spending:
2006: [$$$$$$$$$$$$$$$$$$$$] $900M
2023: [$$$$$$$$$$$$$$$$] $751M (-16.5%)Direct Substitution and the "Discoverability" Myth
A core argument advanced by library advocates has been that public library exposure drives retail sales through increased "discoverability." However, the Secretariat Advisors study refutes this claim, drawing on empirical lending and purchase data, including granular usage patterns from the Seattle Public Library.
Researchers found that increased digital access to e-books correlates with a statistically significant reduction in commercial retail sales across all formats—both print and digital. The data indicates that format substitution is most pronounced early in a title’s release window, precisely when commercial retail demand is highest and print usage peaks.
"The research in this study, which focused on the impact of e-book lending, identified one recurring conclusion: increased digital library access to e-books is consistently associated with a statistically significant reduction in retail sales of books across formats… These patterns are consistent with genuine format substitution rather than library e-book share being associated with book discovery or market expansion."
— Dr. Jéssica Dutra and Dr. Robert Stoner, Secretariat Advisors
The Mechanics of "Digital Friction" and "Windowing"
Physical library lending naturally incorporates "friction"—a patron must physically travel to a branch, wait for a book to be returned, or manage physical late returns. Digital lending, by contrast, eliminates physical friction, allowing patrons to download titles instantly from home without cost.
To protect commercial markets from complete digital substitution, the report highlights the operational necessity of introduces artificial friction into licensing frameworks, specifically through "windowing"—the practice of delaying digital availability to libraries for a set period following retail release.
The report cites a landmark 2025 European Commission study on digital publishing, which affirmed that while e-book licensing creates complex demands for public institutions, windowing practices remain necessary for rightsholders to protect alternative revenue streams and maintain a balanced creative economy.
Official Statements
Leadership from both the Association of American Publishers and the Authors Guild issued a unified response alongside the publication of the report, emphasizing that short-circuiting market dynamics via state legislation undermines the broader literary ecosystem.
+-----------------------------------------------------------------------------------+
| JOINT LEADERSHIP STATEMENT |
| |
| "Fully funding libraries should be an urgent priority for all lawmakers, and |
| the Authors Guild and AAP stand firmly behind efforts that would increase |
| taxpayer funding at every level of government and support new ideas for private |
| sector support. It should be obvious to policymakers that both the mission of |
| libraries and the intellectual property of authors and publishers are equally |
| invaluable to the public interest, not a tradeoff." |
| |
| — Maria Pallante (President & CEO, Association of American Publishers) |
| — Mary Rasenberger (CEO, Authors Guild) |
+-----------------------------------------------------------------------------------+Addressing the ongoing constitutional and contract-based legislation, Pallante and Rasenberger reaffirmed the legal boundary established in federal court:
"As a matter of law, it is incontrovertible that state governments lack constitutional authority to contradict our national copyright system for books or any other protected creative expression, which is the exclusive province of the U.S. Congress.
In short, the key to the future of books across all formats will not come from the statehouse but from ongoing private sector innovation and more numerous and varied business models that are the result of nimble and competitive marketplace negotiations. It is our view that debates in the states, frequently accompanied by misinformation about law and facts, have not assisted the discussions between licensors and licensees but rather polarized and confused them."
Future Outlook
The dispute between creative rightsholders and state legislators reflects a deeper struggle over how cultural goods are funded and consumed in a digital-first economy. As state legislatures in Connecticut, New Jersey, and Illinois move forward with contract-focused statutory frameworks, legal experts anticipate immediate federal court challenges premised on federal preemption principles under Title 17 of the U.S. Code.
For authors and publishers, compulsory licensing or price ceilings threaten to deplete the royalties that sustain professional writing. For public libraries, static municipal budgets coupled with rising community demand for digital formats present real operational pressures.
However, as the Secretariat Advisors report demonstrates, shifting the financial burden of library services onto rights-holders through state legislative mandates disrupts market equilibria. The future of digital reading will likely depend on nuanced, market-driven licensing innovations—such as tiered windowing, pay-per-circulate models, and dynamic library-specific windowing—backed by increased public taxpayer investment in library system infrastructure, rather than state-level intervention in free-market copyright licensing.
