> consumer expectations that a digital file will be less expensive than a physical copy That expectation is justified, because bits haven't been a scarce resou

> consumer expectations that a digital file will be less expensive than a physical copy That expectation is justified, because bits haven't been a scarce resource ever since Shannon's digital circuits drove marginal cost of copying a file to approximately zero. > very little of the cost of making a book is tied up in the physical format If the market isn't willing to pay that price, then their business model isn't sustainable. Blaming libraries and attempting to make their product artificially scarce (with rate-limiting contracts or technical tricks ("DRM") at best only postpone the business model's eventual failure. While it would be unfortunate if authoring books became unsustainable, the publishers may not be needed. That's what capitalism does: it removes inefficiency, including middlemen that no longer strictly required.. > Potash said that studies consistently show library patrons to be more frequent book buyers overall—which is another reason Macmillan’s letter stung. “They are taking their readers, their customers, their fans, and intentionally trying to frustrate them,” he said. Giving your actual paying (even indirectly through a library) customers a worse experience than they could get by sim0ply downloading a pirated copy is always a bad idea. It takes a long time to rebuild from a bad reputation. However, the bigger problem is failing to recognize that the real competition is for people's attention. Rate-limiting or otherwise restricting libraries is throwing away the most important resource: people's awareness that your product even exists. Do you want free advertising even when people read your book for free, or do you want fade into obscurity without even the possibility of making a sale? > The licensing model for libraries and e-books itself is complex and difficult to explain to outsiders. That's intentional, because they are trying to use complex tricks to artificially recreate scarcity instead of adapting to a new business model.