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Saturday, September 8, 2012

New times, new partners

Below is an earlier version of an article I wrote for the Independent Book Publishers Association. It has just come out in their monthly journal.

Public libraries in America buy about 10% of the total commercial publishing output; and closer to 40% of children's materials. But which books?

Over the past generation of librarianship, the answer comes down to four things:

* what our patrons ask for. Libraries aren't "free" -- they're paid for by the community. That's who we have to satisfy.

* what's pushed by advertising. Library buyers, whether distributed among professional staff, or assigned to a centralized collection profiler, are trying to anticipate demand. Public demand results from advertising. Print run and publisher marketing budgets are generally reliable predictors of the number of copies we'll need.

* what's reviewed. We tend to buy what's well-reviewed -- unless the demand trumps it. Books that wind up in libraries are typically featured in such titles as Booklist, Library Journal, School Library Journal, and Publishers Weekly.

* what's carried by distributors. It's so much easier to deal with one middle-man who can wrap up reviews, ordering, discounts, and delivery. It's easier to write one check for six publishers than to write six. Over the last twenty years, this has resulted in a loss of relationships between libraries and publishers. We don't talk to them, we talk to our distributors. It has also resulted in a significant concentration of purchases from the Big Six (Hachette Book Group, HarperCollins, Macmillan Publishers, Penguin Group, Random House, and Simon & Schuster).

Together, and combined with recent challenges to library budgets (which tend to lag behind the general economy both in reduction and recovery) that means it's been difficult for independent, small, and self-published works to get into our collections. We don't know about them, our patrons rarely ask for them, and it takes more work to deal with them.

the ebook arrives

Then, following the appearance and consumer adoption of the Kindle, the Sony eBook Reader, the iPad, the Nook, and the smartphone, suddenly our patrons were asking us for all the usual books in a new format: the ebook.

An early ebook vendor was NetLibrary -- but they weren't set up for downloading to devices. OverDrive, founded in 2002, was for most libraries the only game in town.

The OverDrive business model was this: libraries couldn't buy books. We could only lease access to them. If we left OverDrive, we left behind the collections we had "purchased." We sacrificed ownership. Libraries had to pay what OverDrive charged -- slightly more than the consumer price. We sacrificed discounts -- which for most libraries, was a 40-45% reduction in the list price. OverDrive provided a hosted solution - so convenient! Which meant that we also sacrificed any control over the user experience. Our catalogs looked and operated one way; OverDrive, another.

This was the action of a single distributor, although it was clearly part of a trend. Take a look at your Kindle or Nook license. You don't own those books, either. I remember inheriting a lot of books from my grandfather, books that had a profound effect on my development. But in the e-frontier, when you die, your books die with you.

Then it got worse: publishers started changing the game on us. HarperCollins, worried that libraries would cost them sales on new titles (who would buy what you could borrow for free?) charged us (through OverDrive) for the book again after 26 reads. Random House, with no advance notice at all, tripled their prices for new ebooks. The latest Danielle Steele costs $84 a copy -- hard to justify when you can buy four or five hardcopies. Some publishers started talking about the importance of "friction" -- making the borrowing of a book from the library just awkward or difficult enough that it would be less hassle to buy it outright. In effect, this urged us to base our business model on customer inconvenience.

The remaining four of the big six wouldn't sell to us at any price. The largest distributor of ebooks, Amazon, used its own proprietary file format that only it could control. Long time distributor Baker and Taylor announced their adoption of their own locked-down ereader file format, thereby claiming our e-collections as their business asset, not ours.

Meanwhile, there was an explosion in new writing. Independent, small, and self-publishers found that the economic barrier of distribution was disappearing. By the end of 2010, there were 2.7 million self-published titles alone -- over 9 times the mainstream commercial output. The job of librarians is to provide access to the intellectual content of our culture, and suddenly it was obvious: the Big Six were not the most interesting kids on the block anymore. There was a chance to define a new market.

Ebooks weren't just another format. Librarians have dealt with that before (filmstrips to reel to reel to audiotapes to CD to MP3 to DVD, etc.). The ebook market broke our distribution model, and changed fundamental business terms. We were having new and onerous terms dictated to us, a raid on public funds that challenged our ability to fulfill our mission.

So libraries buy the book in hardback, paperback, large print, and audio (downloadable, CD and Playaway). Then we have to buy it again as an ebook, but this one we can't own, and can't sell. The result: a significant erosion of our ability to sample the intellectual content of our culture.

Myth-busting

Publishers and authors have a lot of misinformation about libraries. This might be a good time to bust the myths.

Myth # 1: Libraries just want to buy one copy, then give your book away to the world. The truth: No, we don't. We do want to increase access -- getting more books in more people's hands is part of the library's mission. But we understand and adhere to copyright. We pay for multiple copies in the ebook world, just as we do with print. At Douglas County Libraries, we have our own system to manage ebook checkouts (see "the DCL Model" below). We apply industry standard Digital Rights Management through the industry standard Adobe Content Server, and we check out books to just one person at a time.

Myth # 2. Libraries steal sales from publishers. The truth: No, we don't. Last year, my community of 300,000 people checked out over 8.2 million titles. They never would have bought that many. On the other hand, Douglas County residents did buy a lot of books. We have a lot of "power patrons." Research conducted by Bowker and Library Journal found that "For every two books they borrow, power patrons buy one. And, maybe most surprising, nearly two thirds of power patrons buy books that they had previously borrowed at the library." That study (see http://www.digitalbookworld.com/2012/library-patrons-buy-books-they-borrow-study-says/) was based on 2,000 library patrons. Our own study of almost 4,000 Douglas County patrons found much the same thing: The more people use the library, the more books they buy. We don't steal sales; we boost them.

Myth # 3. It's too easy to borrow books from the library. The truth: I wish. There isn't a public library in the nation that can buy enough copies to satisfy public demand. Most popular titles have waiting lists. It's not uncommon for people to wait a minimum of 12 weeks for bestsellers, or a even up to a year. Library budgets have taken a hit in recent years. We can't supply all titles to the world; we can barely keep up with our own communities. We're not trying to make things difficult for people, but we can't offer instant gratification, either. We can, however, form new partnerships that make it easier for patrons to buy books.

The Douglas County model

At the end of 2010, I asked my IT director, Monique Sendze, if we could accept a donation of an ebook. I'm not talking about snatching something off someone's Kindle; I wanted to know if we could receive, catalog, and deliver a book written by a local author and freely given to us for public use.

The answer was no. Right now, hardly any library can. But that's about to change.

After a lot of study, experimentation, and investment in programming time, the Douglas County Libraries now can accept such books. Moreover, we can and do buy them. At this writing, we have over 7,000 ebook titles in our catalog from over 800 publishers.

The features of our relationship with digital publishers should be familiar: it's much like what we do with print, with a few exceptions. Namely:

* we own the copies.

* we buy them at discount, set by the publisher.

* we integrate the content - and the metadata or cataloging descriptions - into our catalogs along with everything else. Books, ebooks, audiobooks, movies, music (and cover art and reviews) -- it's all together.

So far, that's what we've always done. What's new?

* we attach DRM to the titles by default. We make an exception for public domain or Creative Commons content.

* we have a built-in recommendation engine, offering suggestions for further reads based on popularity, reader ranking, and even one's own borrowing history (on an opt-in basis).

* if one is provided by the publisher, we post a link to purchase. Our patrons can check out what's available, put a hold on what isn't, or buy it outright. And the library gets a percentage of the sale.

In the past month, our patrons clicked the "buy it now!" button 5,000 times. How many of those resulted in actual sales? We're not sure yet -- once they leave our site, we rely upon the reporting of our partners. But we're confident that we are adding value not only to our patrons, but to the publishers.

After some early trials, we learned not to try to write a contract with each publisher. We want to employ authors, not lawyers. So all of our agreements are governed by a clear, simple, "dear publishing partner" letter, and a companion "common understanding" document. You can find them, and more information about the technical side of the DCL model, at the eVoke site established by the Colorado State Library (http://evoke.cvlsites.org).

The interest in this model -- which restores purchasing power to the public library, and predictability to the publisher -- has been extraordinary, both regionally and internationally. Our software model is designed for replicability, with significant Open Source components. Libraries can be trusted to manage content; we have only lacked the tools.

What's next?

We're also keeping track of those mid-list and independent publishers who have expressed a willingness to work with us. We're sharing our list with the many libraries investigating our model; and those libraries are sharing their lists with us.

If you have, or are developing, a significant inventory of ebooks (right now, we're looking for more genre fiction), contact me at the address below.

In a future article, I'll be more specific about how you can get ready to work with the library market, and what other new partnership opportunities we may be able to create.

In a time of great change, success goes to those bold enough to define a vision of the future where we can thrive together. Come grow with us.

James LaRue, Director
Douglas County Libraries
100 S Wilcox St
Castle Rock CO 80104
Phone: 303-688-7656
Email: jlarue@dclibraries.org

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