The Library Model for Ebooks

by Adam on March 18, 2010

There’s been a lot of talk, both ongoing and lately, about how libraries fit into the digital publishing world…and whether they actually can. Overdrive has crafted a strong offering through which they’re looking to become the main intermediary between publishers and libraries. Who knows if they’ll be able to pull it off or if enough of the bigger publishers will go for it, but it’s an interesting business model that represents the next hurdle for eBooks (as if we haven’t spent enough time trying to get over the initial hurdles!).

John Sargent, CEO of Macmillan spoke recently at the Publishing Point conference in NYC. Eric Hellman did a great job of covering Sargent’s presentation in a blog post titled: eBooks in Libraries a Thorny Problem, which is worth your time to read.

In his presentation, Sargent brings up several roadblocks to the traditional library model moving online: the ability for consumers to search an unlimited database through the country, or the world, to find their desired eBook; the lack of friction, usually present in traditional library lending, which is not there with digital; and a subscription or per download fee, while feasible, could wreak havoc on a library’s balance sheets.

To his first point, I feel Sargent misses (maybe purposefully) that ebook lending would likely be attached to library cards – that’s not to say someone can’t register for multiple cards, but it’s unlikely that I can go onto three separate library websites in different states to get what I need. So that’s a potential fix – the one main roadblock at that point is the number of digital copies a library is then allowed to lend…one eBook at a time? What a laborious process for the consumer. Maybe 3? Or 5? What is the cap on how much of a certain book can go out the door in a two week period?

I’m also not entirely convinced that the pay-for-borrow model couldn’t work, but it would need to be thought through. Maybe not pay per download but what about for every 10…100…1000 downloads of a book? I’m not sure how this would stack up against selling a book in print, but at this point, it’s added revenue. Libraries would do well to try to work out a batch royalty arrangement with publishers, such that they can anticipate fees from year to year…although who knows if that’ll actually happen?

Another point that hasn’t been brought up: advertising, which could likely do significantly better in ebooks that are used by libraries compared to those that are bought outright. Advertising in magazines works well because the issue changes on a monthly basis and in most cases, so do the ads. But with an ebook bought outright, that doesn’t happen…I would imagine that the permanence of ebook ads has made some publishers too skittish to do embark down that road. But with an ebook borrowed from the library, the consumer spends only a short amount of time with the ebook (I’m assuming ~2 weeks max) that it’s more of a transient read, exposed to a potentially larger pool of consumers.

In that scenario, it’s actually very much akin to the iPhone app model…think “ebooks lite.” All those consumers who borrow an ebook from the library for free would get an ad-supported version, but consumers can also buy the ebook outright to get an ad-free version. Of course this would require more work on the publishers part to put together, but it could be a good model to use with libraries.

Lastly, for all you ambitious people out there, there is opportunity here…imagine a company that goes to publishers of all kinds and offers an online only library – subscription based, or pay-per-download (with expiration) that publishers share in. It could be a royalties nightmare, but it would sidestep some of the financial worry that libraries present and would have a proven revenue model. And then libraries could buy their own subscription to the database and the problem vanishes…or at least is minimized…

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