E-Book Library Lending Rises, Publishing Industry Grapples With Change

February 13, 2012 By Barbara Galletly (un intervento al Digital Book World)

As e-books have become a core part of U.S. publishers’ business, libraries, booksellers and startups have built e-book lending programs aimed at providing remote customers armed with e-readers a modern version of what they once could get only by visiting their local library.

Amazon says that its Kindle Owners’ Lending Library, a controversial e-book lending program that the company launched for its Amazon Prime subscribers, has increased book sales for lending-library titles, and the e-tail giant has jumped wholly into e-book lending. Meanwhile, major New York-based publisher Penguin Group US recently announced that it would discontinue offering new e-book titles to library patrons through OverDrive, a Cleveland-based e-book distributor that plays a central role in much U.S. library e-book lending.

While book industry players including Amazon, Penguin, OverDrive and others struggle with rapidly changing e-reader and bookselling technologies, libraries are continuing to do what they have done for generations: Provide patrons with free access to information using the best technologies available to them. In the digital book age, that means buying e-books from publishers and lending them out to patrons, just like print books.

The tech sector, not to be left out, has been fertile ground for sprouting start-ups like LendInk and Gluejar that aim to profit from the e-lending game by facilitating e-book-sharing.

Publishers, for their part, continue to sell large amounts of print- and e-books to libraries and continue to use the public institutions as marketing platforms for new books as book retail shelf space becomes more scarce.

E-Lending in 2012

There are over 120,000 libraries in the United States, including public, academic, school, armed forces, government and special libraries, according to the American Library Association (ALA), a Chicago-based library trade association. Nearly 100% of academic, public and school libraries are connected to the Internet for staff use and public access.

Figures identifying readers and quantifying their use of e-books are hard to come by given the dedication of libraries to protecting reader anonymity. According to a quarterly publication by Library Journal called Patron Profiles, however, two-thirds of libraries report that they make e-books available to their patrons. A 2011 survey among 1,029 librarians by online digital library ebrary suggests that librarians in general want to provide more, easier access to e-books for their patrons.

In fact, e-book lending has become so popular at the New York Public Library that librarians there launched an e-book information resource called eBook Central in December, just in time for the Christmas holidays, in anticipation of an onslaught of inexperienced potential e-book readers.

Private companies are also lending books. In November, Amazon launched a lending library for owners of its Kindle devices who also subscribe to Amazon Prime, a content-streaming and delivery-discount program. The company has 50,000 titles available for borrowing – up to one per-month per-user.

Publishers and Lending

Senior leadership from the ALA recently met with representatives from some of the largest U.S. publishers, including Penguin, Macmillan, Random House, Simon & Schuster and the Perseus Group. At the time of the meeting, two of the five – Random House and Perseus – were allowing libraries to purchase and lend out any of their e-books. Penguin offered only their backlist to libraries, and Macmillan and Simon & Schuster did not sell any e-books to libraries.

As a result of the meeting, Random House will reportedly raise e-book prices it charges to e-book distributors OverDrive, 3M, and Ingram, starting March 1. Those wholesalers will determine the price charged to libraries.

Several major publishers were contacted for this story, but none, including several big-six publishers, would publicly discuss their relationships with libraries, OverDrive or lending. Some provided information and insight for this article on background. Amazon did not respond to request for comment.

Smaller independent publishers may be more willing to deal digitally with libraries. Ann Arbor, Mich.-based Dzanc Books treats e-books like print books when it comes to lending, according to executive director and publisher Dan Wickett. The publisher works with e-book distributor Constellation to sell e-books to online booksellers and to libraries. Dzanc also sells e-books directly to libraries, uploading them to library servers and allowing libraries to package the e-book (in Kindle or EPUB format) and lend it to library users one at a time, for two to three weeks, without copy-lending limits.

For many publishers, security of e-book content is a major concern. Penguin’s February 10 decision to discontinue selling OverDrive new titles may have been about security issues, according to media reports.

“Multiple publishers have told us that Overdrive’s implementation of their Kindle library lending – in which library patrons are sent to a commercial, third-party retailer, in this case Amazon – is in their view a direct violation of Overdrive’s contracts,” wrote Michael Cader in Publisher’s Lunch.

Social Lending, Start-ups and Distributors

While libraries and publishers sort out how many users will check out e-books, there is an entire ecosystem of companies growing up around e-book lending.

OverDrive is currently the largest distributor of e-books to libraries, serving both trade and academic markets. The company has over 650,000 titles and distributes these to more than a million end-users. E-book distributors 3M and Ingram work with libraries as well, as do academic and scholarly text-oriented services, including Ebook Library and ebrary.

Traditional distributors are being joined by others that facilitate different methods of e-book lending to users, including through social networks. Copia, a start-up launched in 2010 by supply-chain management company DMC Worldwide, provides a platform that aims to link publisher-generated content in the form of e-books with “social networking, collaboration, and e-commerce with an array of wireless e-readers to deliver an experience around shared discovery,” according to the company.

In December, New York-based start-up Our Bookshelf announced itself as “the DRM-free e-book lending social network,” aimed at simultaneously making it more “convenient” to suggest and share e-books, while protecting copyright holders by strictly limiting access and check outs. Digital rights management, known as DRM, is digital copyright protection.

The start-up LendInk, based in Garden Grove, Calif., allows users of the Kindle Nook, Kobo, and Sony Reader stores to share e-books with one other reader, one time, for a two-week period. Such sharing is subject to policies of publishers.

Based in Montclair, N.J., Gluejar Inc., also a start-up, enables a copyright holder to offer to “unglue” his or her title for a price tag determined by the author, so that it will be available under a creative commons license, free of DRM protection, and therefore share-able by an unlimited number of readers and accessible on any kind of device.

OverDrive itself has integrated social networking into its system as a way to share book picks with friends and to encourage book discoverability on a library’s homepage, Twitter, and Facebook. The distributor has also launched a program that allows users to buy books directly from Amazon if they are not available to be borrowed. The Want It Now program, as it is called, facilitates book sales for which the referring library receives a commission, according to OverDrive director of marketing David Burleigh.

The Future of E-Lending

While distributors continue to experiment with models for e-book distribution through libraries, libraries themselves are also experimenting, finding new ways to make information accessible while also trying to figure out how to incentivize publishers to entrust them with their e-books.

The U.S. Library of Congress, for example, works with the online content repositories Internet Archive and the HathiTrust to digitize and distribute free e-books when rights are in the public domain. The Library of Congress is also experimenting with publishers to find ways of obtaining permanent copies of published e-books which, unlike the Library’s storied collection of Tweets, have not yet been integrated into the Library of Congress’s coffers, according to Mike Handy, deputy associate librarian for library services and programs.

The Harvard Library Innovation Lab at the Harvard Law School is also attempting to answer questions about what digital lending might look like in the libraries of the future. The lab is even working to design high-tech tools that will facilitate sharing between publishers, libraries and patrons. Issues of concern for the lab are how libraries harness their vast user data to power discovery engines of the future and how to build technology that helps patrons browse and discover new books, according to Jeff Goldenson, a Web designer and multimedia communications specialist at the lab.

Goldenson is also working on a new form of licensing that would allow libraries to provide access to e-books while protecting copyright holders and the business interests of publishers – now a hot-button topic in the e-lending world. Such a system should promote wider reading and sales, he told Digital Book World.

At the same time, libraries are also growing in other directions and, in some cases, away from books and e-books. The New York Public Library’s historical Stephen A. Schwarzman branch is reportedly considering divesting itself of permanent collections in favor of more computer and community space. And The Library as Incubator Project, an experimental library founded by library science students in Madison, Wisc., is investigating engaging visual and performance artists and writers with alternative and easily accessible library collections, with an aim of encouraging creative output – rather than information consumption, the traditional, historical mission of U.S. libraries.

We’re witnessing a sea change in e-book library lending. As more players become involved in the market, the traditional roles of publisher, distributor, bookseller, and library are beginning to blur. One thing is clear, though: As publishers struggle to sell and market their wares in a world of declining retail space, libraries become more valuable. If digital shelf space at libraries proves to have similar effect as its physical counterpart, to serve libraries and their patrons digitally is to cultivate customers of the future.

Barbara Galletly is a master’s student in information science at the University of Texas, Austin, School of Information. She is a former employee of Georges Borchardt Inc., a New York-based literary agency. Follow her at her website or email her here.