So why would someone pay for an eBook if they can download it free from a library's website? After all, the process is more or less identical to buying an electronic book on Amazon.com or Barnes and Noble's website.
That has publishers approaching eBook lending with some trepidation.
I don't understand why publishers think ebook lending is so different from lending physical books. As the article notes, one copy can only be lent to one library card holder at a time, which makes it no different than a physical book. As for the idea that ebooks never wear out, don't forget the video I posted earlier this year, debunking HarperCollins's 26-checkout limit on ebooks as a realistic way to mimic the lifespan of physical books.
Libraries have been lending physical books to people for years. Is the publishing business still thriving? Yes, of course. Do some people borrow certain books from the library instead of buying them? Yes, of course. But I would argue that libraries don't actually steal sales from publishers. Slow readers who don't read many books a year are going to buy their books regardless, because they won't be able to finish them within the time allotted for library books. Book lovers who read many, many books a year, on the other hand, still only have a certain amount of money to spend, and if we didn't have libraries we'd just do what people used to do a couple hundred years ago — reread a lot of books, and borrow books from friends. And as the article notes, libraries account for 10 percent of the book buying market. If you took libraries away, it would be more detrimental to publishers, I believe, as they would ultimately have fewer buyers, and therefore be able to publish fewer books.
Now why would any of that change with ebooks? You still have a time limitation on ebooks — in fact, you can't renew ebooks and most libraries give you only 2 weeks instead of 3, so anyone who is going to take a while reading an ebook will buy it (though those readers probably wouldn't be as interested in ebooks as avid readers). Just like with physical books, libraries have to buy them, which in itself supports the publishing industry. Just like with physical books, the wait time on very popular ebooks will encourage some people, who don't want to wait, to go out and buy their own copies. And just like with physical books, some readers are going to like some books so much that they go out and buy themselves a copy, whether physical or digital.
As for concerns of piracy, the file expires when the library ebook is "due," so only the most tech savvy individuals are going to be able to pirate library ebooks, whereas it takes much less technical knowledge to scan or photograph a physical library book and run it through an OCR program. In fact, thanks to the iPhone and various OCR apps, I rather suspect that pirating physical library books into digital form is actually pretty easy, and you get a non-DRMed file as a result, so stolen DRM-protected library ebooks probably account for a very small number of the pirated ebooks out there.
In any case, I wish the publishers would get over their fears already, because I believe ebooks are going to be a very significant part of the publishing industry from here on out!