<html xmlns:m="http://schemas.microsoft.com/office/2004/12/omml">
<head>
<meta http-equiv=Content-Type content="text/html; charset=us-ascii">
<meta name=Generator content="Microsoft Word 10 (filtered)">
<style>
<!--a:link
{mso-style-priority:99;}
span.MSOHYPERLINK
{mso-style-priority:99;}
a:visited
{mso-style-priority:99;}
span.MSOHYPERLINKFOLLOWED
{mso-style-priority:99;}
p
{mso-style-priority:99;}
/* Font Definitions */
@font-face
{font-family:Tahoma;
panose-1:2 11 6 4 3 5 4 4 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:12.0pt;
font-family:"Times New Roman";}
a:link, span.MsoHyperlink
{color:blue;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{color:blue;
text-decoration:underline;}
p
{margin-right:0in;
margin-left:0in;
font-size:12.0pt;
font-family:"Times New Roman";}
span.emailstyle18
{font-family:Arial;
color:navy;}
span.emailstyle19
{font-family:Arial;
color:navy;}
span.emailstyle20
{font-family:Arial;
color:navy;}
span.EmailStyle21
{font-family:Calibri;
color:#1F497D;}
span.EmailStyle22
{font-family:Arial;
color:navy;}
p.Default, li.Default, div.Default
{margin:0in;
margin-bottom:.0001pt;
text-autospace:none;
font-size:12.0pt;
font-family:"Times New Roman";
color:black;}
@page Section1
{size:8.5in 11.0in;
margin:1.0in 1.25in 1.0in 1.25in;}
div.Section1
{page:Section1;}
-->
</style>
</head>
<body lang=EN-US link=blue vlink=blue>
<div class=Section1>
<p class=MsoNormal><font size=2 color=navy face=Arial><span style='font-size:
10.0pt;font-family:Arial;color:navy'>I received an e-mail from Mr. Marwell
today, with a “statement” attached:</span></font></p>
<p class=MsoNormal><font size=2 color=navy face=Arial><span style='font-size:
10.0pt;font-family:Arial;color:navy'> </span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>Dear Mr. Jones,</span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'> </span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>Thank you for taking the time to write and share your thoughts re: our
new eBook terms.</span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'> </span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>While obviously we don’t agree with your conclusion, we do agree
with your statements regarding the importance of libraries as customers for
publishers and as bedrocks of our local communities. I’m attaching
a statement that puts our decision into more context. </span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'> </span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>Please review and let me know your further thoughts.</span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'> </span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>Sincerely,</span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>Josh Marwell</span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>President of Sales</span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>HarperCollins <i><span style='font-style:italic'>Publishers</span></i></span></font></p>
<div style='border:none;border-bottom:dotted windowtext 3.0pt;padding:0in 0in 1.0pt 0in'>
<p class=MsoNormal style='border:none;padding:0in'><font size=2 color="#1f497d"
face=Calibri><span style='font-size:11.0pt;font-family:Calibri;color:#1F497D'> </span></font></p>
</div>
<p class=MsoNormal><font size=2 color="#1f497d" face=Calibri><span
style='font-size:11.0pt;font-family:Calibri;color:#1F497D'> </span></font></p>
<p class=MsoNormal><b><font size=2 face=Tahoma><span style='font-size:10.0pt;
font-family:Tahoma;font-weight:bold'>From:</span></font></b><font size=2
face=Tahoma><span style='font-size:10.0pt;font-family:Tahoma'> </span></font><font
size=2 face=Tahoma><span style='font-size:10.0pt;font-family:Tahoma'>Bob Jones</span></font><font
size=2 face=Tahoma><span style='font-size:10.0pt;font-family:Tahoma'>
[mailto:Bob.Jones@milton-freewater-or.gov] <br>
<b><span style='font-weight:bold'>Sent:</span></b> </span></font><font size=2 face=Tahoma><span style='font-size:10.0pt;font-family:Tahoma'>Friday,
February 25, 2011</span></font><font size=2 face=Tahoma><span
style='font-size:10.0pt;font-family:Tahoma'> </span></font><font
size=2 face=Tahoma><span style='font-size:10.0pt;font-family:Tahoma'>3:49 PM</span></font><font
size=2 face=Tahoma><span style='font-size:10.0pt;font-family:Tahoma'><br>
<b><span style='font-weight:bold'>To:</span></b> Marwell, Josh<br>
<b><span style='font-weight:bold'>Subject:</span></b> New Pricing Structure for
Downloadable Books</span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'> </span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Mr. Marwell:</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'> </span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>It has come to my attention you have decided to change your
pricing policy for downloadable books sold to libraries. Under the new
scheme use will be limited to 26 circulations, after which the library must
re-purchase the item. This may seem to you to be a very good idea, but it
is in fact a very short-sighted and greedy idea. Let me tell you why.</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'> </span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Libraries are very good customers for publishers. They
buy lots of books day in and day out, year after year. For certain book
categories (poetry and reference books come to mind) libraries are your major
customers. Without them you would not have enough sales of such books to
justify publishing them at all.</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'> </span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Libraries are a cornerstone of our democracy, providing
access to information not elsewhere available or affordable to millions of
people.</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'> </span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Libraries are chronically underfunded and must watch their
expenditures carefully. Your company watches its expenses in order to
maximize returns to shareholders. Libraries strive to return not monetary
profits, but educational, instructional, and entertainment benefits to the
public, especially to people who cannot afford to buy books. They can ill
afford to fatten the wallets of greedy publishers or their greedy shareholders.</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'> </span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>If 10,000 libraries declined to buy a new bestseller, you
might hardly miss the lost sales. But if they decided to not purchase ANY
book in ANY format from ANY HarperCollins imprint, I think that would get your
attention because it would have a significant negative impact on your sales and
your bottom line. I’m sure you wouldn’t want to see that
happen.</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'> </span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>As your new policy seems totally indefensible to me as a
librarian, responsible for the wise use of taxpayer dollars, I must inform you
that, effective immediately, my library will not purchase anything from your
company until this new grab for money is rescinded. I will encourage
other librarians nationwide to follow my example. We simply can’t
afford to do business with you. It would be an irresponsible use of
public funds.</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'> </span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>While we strive to provide the materials our patrons want,
we will simply have to inform them why we cannot submit to this form of
extortion on the part of a profitable corporation.</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'> </span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Very sincerely yours,</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'> </span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Robert A. Jones</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'> </span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Library Director</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Milton-Freewater Public Library</span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Milton-Freewater</span></font><font size=2 face=Arial><span
style='font-size:10.0pt;font-family:Arial'>, </span></font><font size=2
face=Arial><span style='font-size:10.0pt;font-family:Arial'>Oregon</span></font></p>
<div style='border:none;border-bottom:dotted windowtext 3.0pt;padding:0in 0in 1.0pt 0in'>
<p class=MsoNormal style='border:none;padding:0in'><font size=2 color=navy
face=Arial><span style='font-size:10.0pt;font-family:Arial;color:navy'> </span></font></p>
</div>
<p class=MsoNormal><font size=2 color=navy face=Arial><span style='font-size:
10.0pt;font-family:Arial;color:navy'> </span></font></p>
<p class=Default><font size=2 color=black face="Times New Roman"><span
style='font-size:10.0pt'>10 East 53</span></font><font size=1><span
style='font-size:6.5pt'>rd </span></font><font size=2><span style='font-size:
10.0pt'>Street</span></font></p>
<p class=Default><font size=2 color=black face="Times New Roman"><span
style='font-size:10.0pt'>New York</span></font><font size=2><span
style='font-size:10.0pt'>, N.Y 10022-5200</span></font></p>
<p class=Default><font size=2 color=black face="Times New Roman"><span
style='font-size:10.0pt'> </span></font></p>
<p class=Default><font size=2 color=black face="Times New Roman"><span
style='font-size:10.0pt'>Telephone: 212 207-7000</span></font></p>
<p class=Default><font size=2 color=black face="Times New Roman"><span
style='font-size:10.0pt'>Fax: 212 207-7909</span></font></p>
<p class=Default><font size=2 color=black face="Times New Roman"><span
style='font-size:10.0pt'> </span></font></p>
<p class=Default><font size=2 color=black face="Times New Roman"><span
style='font-size:10.0pt'>HarperCollins Publishers</span></font></p>
<p class=Default><font size=2 color=black face="Times New Roman"><span
style='font-size:10.0pt'> </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'>March 1, 2010</span></font><font
size=3 color=black><span style='font-size:11.5pt;color:windowtext'> </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'> </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'>HarperCollins is committed to
libraries and recognizes that they are a crucial part of our local communities.
We count on librarians reading our books and spreading the word about our
authors' good works. Our goal is to continue to sell e-books to libraries,
while balancing the challenges and opportunities that the growth of e-books
presents to all who are actively engaged in buying, selling, lending,
promoting, writing and publishing books. </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'> </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'>We are striving to find the best
model for all parties. Guiding our decisions is our goal to make sure that all
of our sales channels, in both print and digital formats, remain viable, not
just today but in the future. Ensuring broad distribution through booksellers
and libraries provides the greatest choice for readers and the greatest
opportunity for authors’ books to be discovered. </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'> </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'>Our prior e-book policy for libraries
dates back almost 10 years to a time when the number of e-readers was too small
to measure. It is projected that the installed base of e-reading devices
domestically will reach nearly 40 million this year. We have serious concerns
that our previous e-book policy, selling e-books to libraries in perpetuity, if
left unchanged, would undermine the emerging e-book eco-system, hurt the
growing e-book channel, place additional pressure on physical bookstores, and
in the end lead to a decrease in book sales and royalties paid to authors. We
are looking to balance the mission and needs of libraries and their patrons
with those of authors and booksellers, so that the library channel can thrive
alongside the growing e-book retail channel. </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'> </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'>We spent many months examining the issues
before making this change. We talked to agents and distributors, had
discussions with librarians, and participated in the <i><span style='font-style:
italic'>Library Journal </span></i>e-book </span></font><font size=3
color=black><span style='font-size:11.5pt;color:windowtext'>Summit</span></font><font
size=3 color=black><span style='font-size:11.5pt;color:windowtext'> and other
conferences. Twenty-six circulations can provide a year of availability for
titles with the highest demand, and much longer for other titles and core
backlist. If a library decides to repurchase an e-book later in the
book’s life, the price will be significantly lower as it will be pegged
to a paperback price point. Our hope is to make the cost per circulation for
e-books less than that of the corresponding physical book. In fact, the digital
list price is generally 20% lower than the print version, and sold to
distributors at a discount. </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'> </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'>We invite libraries and library
distributors to partner with us as we move forward with these new policies. We
look forward to ongoing discussions about changes in this space and will
continue to look to collaborate on mutually beneficial opportunities. </span></font></p>
<p class=Default><font size=3 color=black face="Times New Roman"><span
style='font-size:11.5pt;color:windowtext'> </span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
11.5pt'>To continue the discussion, please email library.ebook@HarperCollins.com</span></font></p>
</div>
</body>
</html>