Friday, October 28, 2011

Library eBooks: Is the eBook Ecosystem affected by the Amazon Library Lending Process?

My usual blogging direction is toward the ebook author and the self-publishing world. With this blog I take a left turn and explore the Amazon Library Lending Process and how it affects the ebook ecosystem.

The Jungle

The Inhabitants

In the ebook jungle, the traditional publishers are indeed the king of beasts. They control the prices and the access to the ebooks. Even the authors who create the content have little say. If publishers don’t want you to borrow one of their titles, you can’t. If they want you to wait for a title, you wait.

The next level of control is Amazon. They play the leopard’s role in this habitat. No matter how you look at the lending program, all paths out lead to their sales pages. I don’t see them changing their spots, ever.

Then there is Overdrive. They are the facilitator in this process. They feed you directly into the lion’s den.

The hunters in this jungle are the readers. They get to borrow what is put on the table. It is not their choice what is available. The decisions are made by the control groups.

The Problems

For something that was highly sought, library ebook lending has some major problems. I guess we thought that the ebook library process would mirror the decades-old tradition of libraries and their lending practices. You know the days when the library purchased a book from any source and placed it on the shelf.

For sure, problems with the new process are swirling around the blogosphere like a down pour in the rain forest. Let’s check in on a couple of the more popular discussions.

Privacy of Information

There is a lot of discussion about Amazon using the library lending process to more accurately profile our wants and habits and using that information to sell more products. I think it is the penalty we have to pay to get a free copy to read. Amazon’s incentive is to get you to buy something but this concept is everywhere? If I am not going to buy a $14.99 ebook, all the marketing in the world is not going to change my mind. There are some great discussions on this topic and I see merit in both sides of the argument. (Check references listed below.)

Of all the bantering and opinions about how to solve the privacy problem, the most absurd is to just pirate the ebook file, put it on the Internet and let everybody share in the free copy. Didn’t this happen in the music business? I wonder if those folks are out of jail yet?

Or I could pay cash for a hardcover book and avoid security cameras.

All I know is when I go to the grocery store and start shopping, I have a list of needs but I am also looking for discounted items I can buy with my shopper’s card. Today I found some hotdogs on sale. Because I am a hotdog kind of guy, I purchased a couple extra packages.

Then I headed to the checkout. I have several alternatives. I can give the checker my shopper’s card, get my discount but give up my personal information and buying habits. Or I can have the checker process my order without my card, lose the discount and save my privacy.

And I have another alternative. I could use the pirates’ method and walk straight out the door, saving my privacy and getting my groceries free.

Checkout limits

This is an old business concept called a ‘click charge’. That is the payment for incremental usage of an item. In the Libraries’ version, the ‘clicks’ or checkouts are paid for in advance.

The ‘click charge’ concept in the digital world was tried in the 1990’s when businesses started converting their paper forms to electronic forms. Several software development companies created e-forms design software to assist companies in the conversion.

Once the process started and the software companies saw how popular digital forms were going to be and how much money businesses were saving on the e-forms, they decided they wanted more than just the money for the design software. They wanted a fee for each form designed. This was called a ‘click charge’. They sold a license for blocks of forms (usually 50 or 100 at a time). Once a company surpassed their block, they had to pay for a new batch.

Companies didn’t go for this very long. They looked for other alternatives. Eventually application software companies added e-forms to their systems. Now e-forms design software, with no extra fee, is everywhere.

By the way, the original e-form design companies are no longer in business. New ideas and competition drove them somewhere else.

Expansion of the Audience

With the low price point of the new Kindles there is a potential of three times as many patrons demanding to checkout ebooks. And it will get worse. In November, there will be a ‘Kindle Fire’ in the jungle. Because of the expanded audience and the way copy access is handled, Nook will take a direct hit on this one. Once free to roam the collections, Nook users will now compete with the Kindle users. This should deeply impact the library budgets, their collections and availability.

A quick look at my libraries’ James Patterson’s collection shows 718 access copies with only 36 copies available or 5 percent. Only one title is available that was published since 2009. With these stats many people move on to something else. They either select something else in the library catalog or because they have their Kindle in their hands, they just buy it. Amazon’s motive, I am sure.


As long as we have unlimited checkouts, the library must encourage early RETURNS.

The Principle of Maximizing Library Returns states that in the library lending process, returning one book earlier than the  loan expiration date, while keeping the titles available constant and with no checkout limit, will at some point yield a monetary return to the library.

Of course, all ebooks will never be checked out at one time but popular ebook titles will almost always create a waiting list. On hold, if you will.

So does the library buy access to more copies of the popular title or do they let their patrons wait for the title to be available? Trust me the wait can be very long.

So what happens when the reader is done with the title and returns it early? The next reader in the hold line has the opportunity to check the ebook out. If this happens often enough, the need for the library to purchase access to another copy of the ebook diminishes.

Let’s take a quick look at one title to illustrate the point.

Don’t Blink x James Patterson
There are Only 4 ebook access copies in my library’s collection.

There are 71 patrons on the waiting list. At the rate of a full 14 day checkout, it will take 248.5 days to meet the demand. If the ebook was returned early, let’s say 5 days, the wait decreases to 88.75 days. (Still a three month wait.)

A better scenario would be to purchase 6 more copies (about $60.00) and encourage early returns. A 5 day return would bring the demand down to a 35 day wait.                                                       

Click Charge Strategy

If the publishers elect to impose a checkout limit, then the libraries must modify their strategy. In a way it makes the process simpler. Just buy short and adjust up.

Maybe you could test this now with HarperCollins. Only buy one copy of a title. If you see a hold list developing, buy another. With this strategy at least you won’t get caught holding 10 copies of a title with no activity.

Managing your digital collection will be the key to handling ‘click charges’ and reordering.

I wouldn’t boycott but I would not embrace the limit system either. Just adjust your buying model and limit the bad apples. Libraries do have the final say on which ebooks they purchase access too.

Living in Harmony

So what does this mean to the ebook ecosystem? I do know the natives are getting restless. As new technology and software enter the ecosystem, the pressure on libraries to keep up will grow dramatically.

I believe that ‘Returns’ are a key for libraries to maximize their investment in their collections. The less days an ebook is on loan, the greater the opportunity for the library to not buy access to an additional copy. The patrons need an incentive to return the ebooks early.

In the end we need a new animal in the ecosystem. Competition could solve some of the problems. Whether it comes from Google or 3M or another player we need more choices. Maybe we are looking at Smashwords entering the lending business or Amazon themselves. They have access to the content and their selection should be much greater.

Library access to a source of self-published authors and their works at discounted pricing could help patrons get exposure to new writers and relieve some of the pressure from the Overdrive lending system we are seeing currently.

What are your thoughts?

What can we do to encourage patrons to return ebooks early?
Will libraries have to change the way they manage their collections?
Is the ebook lending privacy issue a major problem or our current way of life?
Will libraries ever be able to purchase a copy of an ebook, place it on their server and have unlimited distribution to their patrons, like they do hardcovers?


A Helping Hand

I need to thank Brenda Brown from the Chandler, Arizona Public Library. She helped me to be able to ‘see the forest for the trees’. Sometimes I get involved in the details and I don’t see the whole picture.

View my website: HBSystems Publications
Specializing in the ebook experience

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LinkedIn Profile: James Moushon

Author: Call Off The Dogs, a rendered eBook

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