Overdrive is Making My Crazy Dream Come True

Fifteen years ago, I had this crazy dream. I imagined that popular websites would use fancy links to let their readers get books from their local libraries. And that search engines would prefer these links because their users would love to have access to their library books. I built a linking technology and tried to get people to use it. It never took off. I went on to do other things, but it was a good dream.

Tonight, at the opening of the exhibits at the American Library Association in Las Vegas, Steve Potash, the Founder of Overdrive, pulled me aside and said he had something cool to show me.

1. Go search for a popular book on Bing or try this one.
2. Notice the infobox on the right. Look at the Read This Book link. Click it.
3. Now check out this Huffington Post article. Note the embedded book sample.
4. If the Overdrive system recognizes you, it's taken you to your library's overdrive collection. If not, when you click "Borrow" you get a list of Overdrive libraries near you.

It's an embed from Overdrive. Even works here:

Wow!

The read on site thing works sometimes and doesn't work sometimes, so there are still a bunch of kinks for Overdrive to work out. But that's not really the point.

The reason why the Huffposts and Buzzfeeds of the world like this is not so much the customization of a link, which is what I was trying to sell, but rather the fact the the book is embedded on the host web site. This keeps people on their site longer, and they click more ads.

Embeds are the magic of the day. You heard it here first.

Speaking of dreams, I'm having a hard time in Vegas figuring out what's real and what isn't.

Four Corners of the Sky: Chapters 39-41

This is installment 7 of my Big Library Reading diary, covering chapters  39-41, through the end of Part 2.

I had been reading Four Corners on my train commute into Manhattan for Book Expo America. But on Friday Overdrive pushed an iPad update that somehow left my Overdrive app in a half-updated state. So that slowed me down a bit. I need to get it in gear; I have only 5 days left on my checkout!

Maybe it's the influence of BEA, but there seemed to be a LOT of alcohol consumed in these 3 chapters. So I have a few things to say about that today.

Sgt. Dan Hart drinks ALMOND LIQUEUR????? Is that an alusion to a movie I didn't see? Because if Brad was drinking almond liqueur I would think nothing of it, but Dan Hart? What kind of love interest (I got that right, didn't I?) drinks almond liqueur? And after a bottle of Cuervo, too. Annie drinks pitchers of mojitos after saying she doesn't drink. Also, Brad's bottle of beer.

Speaking of mojitos, congratulations to the Evoke team, which won the Publishing Hackathon book discovery competion with their website that makes emotional connection of characters in books more salient. The mojitos at the afterparty were just AMAZING, they set this reading diary back about 10 chapters worth.

So Melissa Skippings is a vodka martini girl. Good for her.

Zemanta is recommending blog posts about Nutella Martinis. So they win the competition for drink discovery via books.

Next Diary Entry

• How to Make a Nutella Martini (crazyadventuresinparenting.com)
• Nutella Martini (neatorama.com)
• Famous cocktails: from silver screen to bars and clubs (brandsandfilms.com)
• Lavender Liqueur (annashortcakes.wordpress.com)
• Get creative with quince: a recipe for Quince Liqueur (toogoodtowastesa.com)

Four Corners of the Sky: Chapters 35-38

This is installment 6 of my Big Library Reading diary, covering chapters  35-38. At Book Expo America today, Overdrive president Steve Potash announced that Four Corners of the Sky had been downloaded by 37,000 library patrons, more than 50 Shades of Gray or Gone Girl. Sales of Michael Malone's other books had gone up by 500%. And these 4 chapters were quite long.

There's starting to be a bit of conversation on Twitter about the book. At another session at Digital Book 2013 Josh Schanker of BookBub presented data showing that it takes about two weeks for a book price promotion to have an effect on buzz or sales. Four Corners is a pretty long book, so it's likely that any effect of offering it in librararies is just now starting.
One thing I saw on Twitter was a report that the Wizard of Oz was Malone's "inspiration" for Four Corners. The allusions are pretty thick, so now I need to list them so I can start enjoying the book again.

• Annie lives with aunt and uncle; her parents are missing.

• Annie leaves home in a twister. My mind was more in the Tempest

• Annie's Toto-ish little dog jumps into the plane with her

• Emerald (City)

• When she gets to Miami, she's the only black and white thing in a suddenly colorful world

• rubies and gold

• Jack and the wizard are con men

So there are some obvious allusions. It's not like the original Tron, which is almost a remake of Oz. So unless Annie goes off to Cuba to kill a wicked witch, I don't think Oz is much help in understanding Four Corners. Like the many movie allusions, it's embroidery, peripheral to the narrative. Not that there's anything wrong with that. 

Next Entry

Big Library Read Diary: Four Corners of the Sky

Although the first Big Library Read (BLR) started on May 15th, it wasn't until yesterday that I got Four Corners of the Sky onto my iPad. Four Corners is the book that Overdrive is making available for free in librararies around the world- at last count 7500 of them! My local library Montclair Public, is part of a regional consortium, BCCLS, that decided not to participate in the Big Library Read in its first incarnation. There wasn't enough advance notice for BCCLS  to participate in such an initiative and do it well.  "BCCLS doesn't enter into such endeavors half-heartedly and felt that a two week window wouldn't allow us the time and effort a project like this deserves" BCCLS Library Services Director Arlene Sahraie told me. I hear similar things from other libraries.

The rapid roll-out of Big Library Read shows up in other areas. I haven't seen a single mention of the program in the mainstream media; it's an initiative with historic implications, in my view. On the other hand, when the program's impact is studied, there won't be the confounding effect of non-library promotion.

On GoodReads, you can see the sudden, but modest effect of the program:

 We'll soon see if that's a one-time bump or the short end of a hockey stick.

I looked into other libraries where I would be entitled to library privileges. In New York City, where I have business, NYPL isn't participating, which might account for the lack of MSM interest. I applied for a card from Queens Public Library, one of the most innovative public libraries anywhere, which is participating in BLR, but I would have to show up in person to get the card approved. So I went to another New Jersey library which approved me for a card. They're a member of a different consortium, eLibraryNJ, that's participating, so I'm finally set to start reading. 

I'm interested to see if online conversations develop differently if an ebook is available to large numbers of people. So I've going to keep an online reading diary on this blog. There are 55 chapters of 4 corners, and I have a 2 week checkout period to work my way through it, so that's 4 chapters a day. We'll see how I do. It's good that I have the full 2 weeks even thought the program ends next Saturday. With BEA and IDPF on my plate, I won't have that much time.

I'm also going to collect here all the online conversations centered around this BLR that I can find, especially blog posts. So far, I haven't seen anything develop. So feel free add yours via the comments!

• My Diary
• Through Chapter 4
• Chapters 5-9
• Chapters 10-14
• Chapters 15-28
• Chapters 29-34
• Chapters 35-38
• Chapters 39-41
• Chapters 42-48
• Finished
• Blogs
• nothing yet
• Twitter: 
• #biglibraryread 
• @michaelmalone10
• Facebook: 
• Chat with Michael Malone
• Michael Malone Page
• Goodreads
• Four Corners of the Sky
• Anne Arundel County Public Library discussion
• Huntsville-Madison County Public Library discussion
• The Four Corners of the Sky Book Discussion (AACPL, Maryland)
• Lower Macungie Library discussion
• LibraryThing
• Reviews

3,000 Libraries to Power "Big Library Read"

"We want to show publishers how a book can sail around the world on the shoulders of librarians" says Overdrive CEO Steve Potash. The circumnavigating book in the inaugural edition of Overdrive's "Big Library Read" program will be Michael Malone’s The Four Corners of the Sky  published by Sourcebooks. Overdrive customer libraries must sign up for the program by this Friday, May 10, but 3,000 have done so already, according to Potash. Beginning next Wednesday, May 15, and continuing through June 1 the book will be free to patrons of participating libraries, with no limit to the number of simultaneous users. After June 1, the book will be available to libraries for conventional acquisition and one-user-at-a-time e-lending.

It's hard to underestimate the impact this program might have. For the first time, large numbers of libraries will simultaneously introduce one book to their communities. Books are conversations, and the idea of a national conversation sparked by libraries is really exciting. (actually it's the whole world- B.L.R. is available worldwide) If the book is as good as it's supposed to be, it might race up the best-seller lists even before the Big Read is done. Or maybe the huge but brief availability will satisfy reader demand for all time, and Sourcebooks will never sell another copy ever. I'm guessing it will be the former, but I can't say for sure.

We'll all know the answers once the program ends, because Overdrive and Sourcebooks will be sharing sales and lending data from the program. Dominique Raccah, CEO of Sourcebooks, is well known in the book publishing industry for advocating data-driven decisions in what has traditionally been a business fueled by lore, rumor and hearsay. The Big-6 hesitance to offer ebooks to public libraries will be revealed to be either prudent or foolhardy. Should be fun!

In February, I wrote about plans for a similar program that originated in the American Library Association's Digital Content Working Group. As a member of that group, I talked to the various library ebook vendors to see if they could support such a program. Most of the people I talked to thought it was a great idea, but saw road blocks in the implementation. One vendor's system couldn't handle prices below $5 per copy. Another vendor only updated their offerings every six months. Overdrive was different. When I told Steve Potash of the effort, he immediately said they could do it. I've since found out that Overdrive was already doing similar programs on a small scale by private arrangement. Potash has told me that the ALA initiative inspired them to make their program bigger and to make the data public. I'm tickled to have had even a bit part in this.

But really, the credit should go to Overdrive, Sourcebooks, and Micheal Malone. They are using the unique attributes of digital books to do something that CAN'T be done with print books. An infinite supply of Four Corners of the Sky will be created for a short time, and later the copies will vanish. It's the library equivalent of a nationwide flashmob. And it's never been done before.

If Big Library Read is a big success, and I hope it will be, it's quite possible that an ALA version of the program can build on that success. It would be great, for example, if all libraries, not just Overdrive customers, could participate in Big Library Reads. The selection process needs to be more open and sustainable, and it needs to draw all sorts of publishers into libraries.

But let's focus on the present. If you work in an Overdrive-customer library, this is your big chance to experiment with ebooks and build new forms of community engagement. If you're a library patron with access to the book, please join me in reading it, tweet it, facebook it, and get your friends involved. Let's find out together how library ebooks can become a mass media.

With your help, we can out-Oprah Oprah!

P.S. this needs a hashtag. People are using #BigLibraryRead.

Related articles

• OverDrive and Sourcebooks to Launch Ambitious Ebook Data Experiment (lj.libraryjournal.com)
• Sourcebooks, Overdrive Pilot Reshapes Relationships Between Publishers and Libraries (goodereader.com)
• Sourcebooks, Overdrive launch pilot to demonstrate the impact of ebook library lending on sales [GigaOM] (paidcontent.org)
• Big Library Read is coming soon! (tnloveslibraries.wordpress.com)
• The New York Public Library Discusses eBook Pilot Projects (goodereader.com)

Can Libraries Lend eBooks Without DRM?

Last week I sat through a talk titled "What is a Book?". The speaker was making the point that digital books don't have to be any particular length, so books could be really short or even really really long. The talk then went down a rabbit's hole of ebook technology. That evening, in the hotel bar, the assembled wisdom came to a different conclusion. "The book is a social construct" we declared, and we promised to write blog posts to that effect. Software can try to make the book into something new and more wonderful, but the social construct is more powerful than the technology. Sure, you can copy a digital book endlessly, but people will still think of it as something you buy in a bookstore. You can use "Digital Rights Management" (DRM) software to stop people from making copies, but people will find ways to share it with friends, because that's the social construct built around books.

Libraries have built another powerful social construct around lending books. You would think that libraries would be able to think of a way to do this for ebooks without resorting to DRM software. But noooo! Here's the problem: ebooks aren't print books, and the most popular model for library lending of ebooks is what I call "Pretend It's Print". Only one person can use the ebook at a time. So when one person is "borrowing" the the book, everyone else has to wait their turn. The reason that libraries accept this model is that it would be prohibitively expensive to license a popular book for the use of all of their patrons at once. The downside is that the fictional scarcity of the ebook has to be enforced somehow. Most publishers don't trust that libraries have the technical expertise to securely encrypt files, manage keys, and track licenses to enforce the print-ness of an ebook. So libraries end up lending ebooks only via "platform vendors" such as Overdrive, 3M, EBSCO, ebrary, EBL and others.

There must be a better way.

When the Harry Potter books came out in digital form, it did come out in a better way. If you buy a Harry Potter eBook from Pottermore, it comes as an unencrypted ePub. But your name and purchase info gets embedded in the file as a way to discourage you from posting it on file sharing sites. ("fingerprinting" and "watermarking") As long as you use the ebook the way you would use a book, no software gets in your way. This is commonly known as "social DRM". Unfortunately, to my mind, the "social DRM" label has besmirched a good idea with the stink of a bad one. Cory Doctorow has called social DRM "delusional".  O'Reilly's Joe Wikert compares social DRM to being "a little bit pregnant"  which might seem "a little bit" hypocritical, as O'Reilly's venture with Pearson, Safari Books Online, requires DRM for O'Reilly ebook subscriptions sold to libraries.  uses social DRM for PDF downloads. (updated 2/18/13 based on comments) A more practical view was expressed by Feedbook's Hadrien Gardeur, who suggests that we think of social DRM as "personalization".

Librarians against DRM (Wikipedia)

Librarians are nothing if not practical but the strong DRM that's been imposed on them by the incumbent ebook platforms is in conflict with many of the core beliefs of librarianship. (The platform vendors, are in turn required to use strong DRM by the publishers who offer their books for library licensing.) DRM degrades accessibility, fair use, and privacy. Is there a way to use the strength of the library lending social construct to enable an ebook lending system that works without DRM?

The difficult part of this is not so much preventing illegal distribution, but getting users to accept limited lending periods for digital objects. After all, libraries need late fines to enforce limited loan periods even for printed books. With personalization of ebook files and cooperation with reading environments, this could be easily achieved. A "loan certificate" could be inserted into the ebook file, and the reading environment could remind and assist the user to "return" the book. Reading environments could also offer the user a chance to purchase a permanent license for the ebook.

Of course, a knowledgable user could easily circumvent loan expiration, or choose a reading environment that ignores loan certificates but that's beside the point. As long as most of the users respect the social construct of the library, they'll respect their obligations to their library, and the world will be better for it. Many of the expenses and inefficiencies of the current system would disappear. I think it's worth a try.

Overdrive has tried. In June of 2011, they announced a DRM-free lending program, with DRM-free publishers such as O'Reilly and Carina Press. The Overdrive program deals with the "return" issue by not dealing with it at all. It's not possible to return a DRM-free title early, so no one else can "borrow" a DRM-free title for the standard loan period. The effect is to replace the one-reader-at-a-time restriction with a lending-rate restriction. Overdrive seems to have de-emphasized this program. In December of 2011 they notified customers that "DRM has been applied to select DRM-free eBooks" and the announcement of the program has disappeared from their blog.  There's also no indication in the borrowing UI that a title is DRM-free; epubs are just labeled "Adobe EPUB ebook", presumably to prevent users from discovering how easy these files are to use or misuse.

A lot of mainstream publishers would never let libraries lend "unprotected" ebooks. There are exceptions. Springer's ebook collection is available to libraries without DRM. This makes sense because none of the included books are likely to be heavily used- the audience for an academic book is usually quite small. On the other hand, there are DRM-free publishers such as Baen and Tor that currently do not allow library lending at all; they seem to be good candidate for a no-DRM library solution.

I've started talking to people about how these ideas might be implemented- if you have ideas of your own, please let me know.

Notes:
1. An IDPF working paper has promoted "lightweight content protection" as another way to address the needs of libraries.  The idea in this proposal is to apply just enough DRM to trigger the anti-circumvention provisions of the DMCA and similar provisions in other countries.
2. Bookshare has used fingerprinting and watermarking as key components of their "Seven Point Digital Rights Management Plan", with good success.
3. Liza Daly has a list of DRM-free publishers.  Now that she's at Safari, maybe something will happen there. you should read her comments. (update 2/18)
4. Unglue.it is another way to remove the need for DRM in libraries.

2011: The Year the eBook Wars Broke Out

Open war is upon us, whether we would have it or not. These incidents in 2011  seemed like twitter-inflamed kerfuffles as we lived through them, but with the perspective of time, we can see they were preludes to a fight to the death.

1. Harper-Collins and Overdrive Stop Pretending

In a year or two, libraries may consider the Harper Collins limit of 26 circulations of a list price ebook through Overdrive to be a relative bargain, as all of the other large publishers will withdraw from "pretend-its-print" ebook licensing.

2. Amazon occupies Overdrive

Libraries mostly welcomed the possibility to lend their Overdrive ebooks to patrons with Kindles. Libraries are fundamentally service-oriented institutions and ebooks on Kindle is what the users wanted. But at what cost? Do the traditional library values of privacy go right out the door? Do libraries realize that patrons gone to Amazon might not come back?

3. The Penguin Strikes Back

The big publishers have watched Amazon's market power grow and see a future of slavery to an internet commerce master. Only Penguin allowed hostilities to break out, however, as the Amazon occupation of Overdrive broke the penguin's back. The target of opportunity was library lending. Evidently Penguin decided that a frontal assault on Amazon would be suicidal.

4. Prime Pretends to be a Library

Amazon added ebook borrowing features to their Amazon Prime service, revealing it as Amazon's answer to Netflix, and without even thinking about it, as a service that could eventually compete directly with public libraries. Now we see why Amazon wanted to get in on that library thing.

5. Publishers Decide Google is a Lesser Evil

Publishers looked back on the halcyon days when Google Books seemed poised to establish a new world order for ebooks with nostalgia. A separate, anticlimactic settlement between Google and the Association of American Publishers appears to be in the offing. It's Amazon that they're afraid of now.

6. Authors Lob Legal Grenades at Hathitrust

Spurned by the publishers in their joint crusade against the Google heathens, the Authors Guild decided that Hathitrust might be a less formidable opponent. And indeed it was, the lawsuit exposed a number of copyright blunders by the library cooperative. But the Guild's suit seemed hasty and ill-contrived. This sort of thing happens in wartime.

7. Amazon Obliterates Borders.

Although Borders was tactically weak in many ways, it was Amazon and the rise of ebooks that killed it strategically. Barnes and Noble, if it survives, won't look anything like the book marketing machine that it is today.

8. Libraries Muster the Resistance

The emergence of the Digital Public Library of America (DPLA) as a rallying point for libraries' continuing presence in the cultural life of America was a surprise, as it went against the prevailing tea-party currents for smaller government and increased reliance on the private sector. It's not clear how the symbolic presence of a library in Zuccotti Park could point the way to a digital future, but many things that have not yet come to pass are shrouded in darkness.

9. Anti-Piracy Hysteria Threatens Freedom Loving Citizens

The powerful publishing and media industries, in a paroxysm of inept do-something-ism, seem to have convinced Congress that it would be a good thing if the intenet could be censored for copyright infringement. Sadly, the solution they've fixed on, SOPA, will be ineffective against unlicensed content and will put the Justice Department smack in the middle of our nation's information infrastructure. Carpet bombing never ends well.

There's hope.

I have learned that whenever it seems that you're falling into the abyss, you must reach for a rope. There is always a rope.

It's Not About Libraries, It's About Amazon

When Douglas County (Colorado) Libraries decided to put "Buy this book" buttons on their online catalog pages (example), the response was strong. In just 11 days, the buy buttons had garnered almost 700 clickthroughs. According to Library Director Jamie LaRue, the library is putting buy links direct to publisher-supplied urls when they are provided (often to Barnes and Noble).  Of the 700 clickthroughs, 389 went to Amazon and 262 to Tattered Cover, the independent bookstore with 3 locations in the Denver area. In isolation, this data seems to be strong support for the notion that a digital presence in libraries can support sales of books. The withdrawal this week by Penguin from library ebook lending platforms (such as Overdrive) would seem to be a profoundly shortsighted move.

Viewed from a big six publisher's point of view, the situation looks different. If Douglas County's book buying rates match the rest of the country, its residents would purchase 2.1 million books per year, almost 6,000 books per day. The 7.1 million items circulated by Douglas County Libraries in 2008 would present as an attractive market opportunity.

It's hard to know what the bookselling environment will look like 10 years from now, after a transition to digital reading platforms. While some publishers hold out hope that they could play a much larger role in servicing the demand that libraries meet in today's market, it's not libraries that worry them today, it's Amazon. Today's big six publisher sees the Douglas County clickthrough numbers and worries that those 389 library patrons are being captured by Amazon. Amazon is pushing $79 Kindles to those patrons and then effectively owns their book consumption.

The casual observer might not imagine how much of a threat Amazon presents to a big six publisher. After all, Amazon is sending them huge amounts of money. But think about how this might play out. If Amazon, with its proprietary e-reading ecosystem, grows to dominate book sales the way it currently dominates ebook sales, then it will be easy for Amazon to squeeze out the big publishers. Amazon can acquire exclusive content by dealing directly with authors, and is already doing so. They will be able to demand that publishers reduce their margins so that they really are marginal. Publishers would have no choice but to surrender and perhaps die.

The Penguin move should be seen not as corporate verdict on libraries, but as a reaction to Amazon's entry into the library market. When Overdrive was distributing content to libraries on their own platform, the publishers were able to view Overdrive, and libraries in general, as a counterweight to Amazon. But the extension of Overdrive lending to the Kindle flipped libraries into the Amazon column. That's the best way to understand the Penguin decision, though you won't see them saying that.

The recently announced Kindle Owner's Lending Library demonstrates that Amazon, blessed with its trove of marketing data, understands the power of libraries to promote sales. But it also demonstrates that Amazon is not content to leave libraries to libraries. Amazon wants in on the lending action, too.

Bookstore closings and bankruptcies are just the first set of casualties in the war for dominance in the ebook industry, which has only just begun. Institutions with footprints as large as libraries won't be able to avoid cross-fire, or even direct attack. Neutrality won't be an option. The advance of technology doesn't respect the innocence of bystanders.

What's clear to me, at least, is that libraries could do worse than to follow the lead of Douglas County, stepping into the marketplace for ebooks without fear, with eyes open and with server logs studied.

3M's eBook Cloud Library Didn't Come Out of Nowhere!

When the Douglas County Libraries in Colorado installed self check-in stations a while ago, they realized that hey had an opportunity to restructure their space. The circulation desk that dominated the main entrance was no longer needed. It seemed obvious to Library Director Jamie LaRue what to put in its place. Libraries need to greet their visitors with displays of books available for immediate checkout. 80% of Douglas County's adult circulation is generated by visual displays of books, so the best way to entice visitors to read is to show them great books to read.

When Douglas County began investigating how to put ebooks into county resident's computers, they wanted to do something similar. A user looking for ebooks should be greeted with a virtual bookshelf of books waiting to be checked out. LaRue was not satisfied with the offering of industry leader Overdrive because he couldn't do such a simple thing.

Public libraries that offer ebooks are frequently faced with problems posed by the strong demand for ebooks. Their users are frequently disappointed that the ebooks they want are always checked out. Overdrive has not yet implemented an programming interface that would allow library catalogs to check on an ebook's availability before showing it to a user, so the process of finding an available ebook can involve a lot of tedious clicks.

To address these needs, Overdrive has announced the "Overdrive WIN" service, which will address better integration with library automation software along with a host of other improvements and service innovations.

I spoke with a number of library automation vendors at this past weekend's American Library Association meeting in New Orleans. eBook integration is high on the list of their customers' wish lists, but I couldn't find any that could tell me when they would be implementing better Overdrive integration, though many of them were in "discussions".

A new vendor worth mentioning was Toronto-based BiblioCommons, whose EC2-cloud-based OPAC service has been implemented by Seattle Public Library and is in beta with New York Public Library. I'd been hearing about BiblioCommons for long enough that I'd had my doubts as their reality. At ALA, they demoed a clean, modern web interface with plenty of social features- go take a look at Seattle Public. Given NYPL's status as a prominent Overdrive customer and Bibliocommons' actively developing codebase, I had hoped to see some preview glimpses of Overdrive WIN in BiblioCommons, but had no such luck.

Back in Douglas County, Jamie LaRue wasn't satisfied with the available options, so around the end of 2010, he had his team approach their auto-check-in vendor, 3M, to see if they could do something about ebooks. As luck would have it, they could. And they did.

Although 3M's entrance into the library ebook platform business came as a complete surprise to many in libraries and publishing, it seems obvious in retrospect. 3M's RFID tag, self-checkout/checkin, and detection businesses were already integrated with library automation systems, so much of the code needed to integrate to library systems was already written. 3M licensed ebook reader and DRM systems from Adobe, and in the space of six months, with the advice and help of customers such as Douglas County, was able to assemble a strong set of services it is branding as the "3M Cloud Library". These include reader software for iOS and Android, as well as spiffy "3M Discovery Terminals", electronic kiosks "with an intuitive touch-based interface". (pictured) 3M is even going to sell "white-label" eReader devices with software tweaked to meet the needs of libraries that want to lend devices.

While 3M is arguably breaking new ground in integration of ebooks with library systems, 3M is far behind Overdrive in the area of publisher relations, which can't just be switched on in a mere 6 months. Overdrive has announced expansions of its offerings in the school and academic markets. Meanwhile, 3M is going in publishers' back doors as it helps the State of Kansas withdraw from an awkwardly drafted Overdrive contract, which Kansas says allows them to move purchased content from Overdrive to other platforms. It's in publishers' interests to have a library ebook channel that competes with Overdrive, but they do SO like to be asked permission first.

For his part, LaRue just wants to be able to tailor his library service to the needs of his community. "I want to provide a quality, integrated experience with a local focus" is what he told me. That doesn't seem to be asking so much.

Update 6/30/11: At The Digital Reader, Nate Hoffelder reported in May that a lot of 3M's reading platform was sourced from txtr, a German start-up they'd invested in. I wasn't able to confirm this at ALA, but have since done so. The Adobe DRM implementation, reading software, apps, presentation interfaces all originated in txtr. I'm also told by multiple sources that 3M has been talking to publishers since at least December 2010.

A Corollary to Raganathan's Third Law

What do you see when you walk through a deserted library crammed with books? Do you see a vast store of knowledge, just waiting to be tapped, or do you see a horribly inefficient use of resources? Do you think of what could be, or do you see what isn't? If you're a librarian with a limited budget, you might think of all the money that went into those books, and you'd be thinking about how to get people to use those books. That's how interlibrary loan came into being.

Now imagine if the books were digital. Interlibrary loan is problematic for ebooks, but librarians are anything if not pragmatic. Some books, though valuable, are unlikely to be circulated a lot. So instead of purchasing those books for the library, the library contributes to a consortium that buys ebooks for the use of all its members. This benefits library patrons, because they gain access to a large number of books they'd otherwise not have access to, and it benefits publishers, because they are able to sell a broader range of books, at higher prices, than they'd sell if the consortium didn't exist.

I haven't yet commented on the consortial aspects of the recent HarperCollins kerfuffle. Here's what Overdrive told its partner libraries:

Another area of publisher concern that OverDrive is responding to is the size and makeup of large consortia and shared collections. Publishers seek to ensure that sufficient copies of their content are being licensed to service demand of the library’s service area, while at the same time balance the interests of publisher’s retail partners who are focused on unit sales.    Publishers are reviewing benchmarks figures from library sales of print books and CDs for audiobooks and do not want these unit sales and revenue to be dramatically reduced by the license of digital books to libraries.

Let me translate this into English.

Publishers are aware that many of the books they sell to libraries are seldom used. (See my posts on Book Use for some quantitative information) They worry that they'll no longer be able to sell 10 copies of a seldom-used book to 10 libraries, because 1 electronic copy will meet the demand from 10 libraries in a consortium. They feel that they deserve the benefit of inefficient library purchasing decisions.

This sort of thinking is myopic. Libraries have responded to budget pressures by making their purchasing  more efficient and relying more on inter-library loan (ILL), a process which is invisible to publishers. Because inter-library loan is relatively expensive, publishers gain when ILL is replaced by consortial ebook lending because the money saved can be redirected to ebook acquisitions.

An efficient library channel will compete, to some extent, with ebook direct-sales channels. The optimum strategy for publishers, however, is not to force inefficiency in the library channel, but rather to optimize pricing to monetize increased efficiency.

The efficiency of library acquisitions can be increased by introducing more consortia. A library needing a collection specializing in medicine, for example, should bolster its collection by participating in a consortium with the corresponding specialization. In principle, there could be a consortium specialized for every book that gets published. Such a consortium could manage the number of copies it purchases to closely manage global demand. If the economics worked out it could even strike a deal for unlimited use of the book by consortium members.

The single-book consortium could even allow individuals participate. It could negotiate with rightsholders for global access.

So here's a corollary to Raganathan's Third Law of Library Science:

Every Book its Consortium

Mmmmm. That sounds like my business idea for Gluejar, un-gluing ebooks.

eBook Carrots for Libraries

"Provide a great service and charge a lot for it" was the advice of an old friend who became a successful businesswoman. I frequently think of this advice; I have sometimes failed to follow the second part and have mostly regretted it. If you provide what your customers value, you should have no qualms about asking them to pay a premium. If you don't give the customers what they value, they won't be happy even if you give them a big discount.

The results of the dual survey I posted on Monday are confirming my guesses about HarperCollins' new strategy for limiting checkouts of ebooks they license to libraries though Overdrive, which sparked the so-tagged #HCOD furor. (The limitations are in addition to a one user at a time limitation imposed on these ebooks.) The results indicate that HarperCollins' new service terms don't give the customers what they value. They'll be unhappy, even if they're offered big discounts.

At what price discount would your library opt for a 26-check-out ebook?

At what premium would your publishing company offer an unlimited-check-out ebook?

The survey for publishers has only attracted 28 responses so far, not enough to make anything other than very broad statements. The survey for libraries has attracted 155 responses, and thus has much better statistics. The poll is in no way scientific; there is sure to be significant sampling bias. In other words, the survey only measures the opinions of librarians and publishers who are motivated to answer.

Significantly, 37% (±5%) of librarians indicated they would not purchase limited-check-out ebooks at any price. I would characterize this response as arising from non-quantitative considerations, which might be practical, ideological or philosophical. A similar percentage of publishers, 28% (±12%) indicated that no amount of money would convince them to offer an unlimited-check-out ebook (which is the most common type today). So it seems that publishers also have considerations that transcend math, which I find a bit surprising.

If we compare the rest of the responses, omitting the non-quants, we see that the librarians perceive a much lower value for limited-check-out ebooks than do publishers. 52 of these 97 librarians would purchase limited-check-out ebooks only if the they were priced at a quarter or a tenth of the ebooks offered without checkout limitations. In contrast, only 1 of 18 quantitative publishers thought the relative value of limited-check-out ebooks was so small.

What's clear is that even omitting the non-quant responses, librarians are perceiving the new HarperCollins licenses as being worth a small fraction of the previous licenses, offered at the same price. It's not surprising that they think it's an awful deal. It's a stick, not a carrot.

Publishers SHOULD be valuing the two licenses based on revenue lift, and they don't seem to expect a huge revenue lift by limiting check-outs. 10 of 18 quantitative publisher respondents seem to expect a revenue difference of 50% or less. My guess is that they're roughly right; I will do some modeling based on library check-out statistics and report on that next week or so.

Looking at the survey results from the other side, librarians are reporting that they put a huge value on the "durability" of the ebooks they license. They don't want books of any kind that wear out! Publishers that want to deliver the highest perceived value (and thus justify the highest prices) should consider finding ways to add to this quality.

One way to increase an ebook's durability is to use standard formats, such as ePub or PDF. This increases a library's confidence that the ebooks will survive into the future; ePub and PDF are the formats used by Overdrive. Unfortunately the DRM ("Digital Right Management") systems that wrap these files are proprietary, and there is a risk that a library's "purchases" will disappear if their ebook platform vendor (Overdrive) or DRM provider (Adobe) disappear in the future. Libraries are used to thinking with long time horizons, and it's a rare library that doesn't have books over 50 years old, much older than either Overdrive or Adobe.

The simplest way to add to the long-term durability for ebooks is to provide libraries with DRM-free, not-for-circulation files in addition to the  DRM wrapped files for circulation. Libraries are used to dealing with license restrictions and have a good record of compliance in this sort of matter; it's likely they would opt to delegate the safekeeping of such files to third-parties. They'd also want to be able to use the files to replace the statutory copying of print books allowed to libraries under US copyright law and to aid discovery in their catalog systems.

Another way to increase the value of an ebook license to libraries without reducing publisher revenue is to selectively allow those uses that are most likely to create publicity and lead to sales. Imagine what would happen if most library ebooks allowed simultaneous use in the first month after a book's publication. This would help libraries attract patrons with "hot" items, and would likely increase total sales by building buzz. Many library readers would want to purchase the book once their loan period expired. More patrons for libraries translates into stronger funding, (or at least less cuts!) which in turn allows for better acquisition budgets.

Andy Woodworth has some more ideas on making ebook rights packages that would be attractive to libraries, and I'm sure there are be many more ways for publishers to offer ebook carrots to libraries. Or at least a parsnip.

Updates: The polls remain open. Gluejar is still hiring, but it's looking like the team will be awesome!

HarperCollins and the Suspension of eBook Disbelief

A good business requires a good story. The customer needs to understand the story of how the business can help solve a problem or deliver a benefit. There are many ways of telling a business story. Some stories are utilitarian; others are romantic or inspiring. Many stories require the consumer's willing suspension of disbelief. This isn't dishonesty, but the customer has to benefit broadly from a business's services and not be harmed by bits of the story that aren't really true. Macs sometimes crash. Facebook sometimes leaks your personal information. The New York Times sometimes really gets the facts wrong.

What you can't do, if the details of your business don't line up with your story, is to create cognitive dissonance for your customers by flaunting the untruth of your story. That's what HarperCollins is doing with its new policy for lending its books through libraries. According to ebook platform provider OverDrive, which first told its library customers about the policy yesterday, the new policy takes effect on March 6, and does not effect licenses purchased before then.

The story that HarperCollins and other publishers have been using is that ebooks are just like print books. They want consumers to accept similar prices for ebooks and print books, and have fought for this using tools such as agency pricing. For the library channel, the fiction is that libraries can lend ebooks to patrons so long as they work sort of like print books. The libraries can only lend them to one patron at a time. I've been calling this the "Pretend It's Print" model.

There are all sorts of good things about this model. It's easy for all parties to accept because it only changes things where they really have to change. It allows the coexistence of print and digital distribution channels. Nobody has to go out of business, except maybe Borders. It's comfortable, and there's much to be said for comfortable. The genius of this model is what has fueled the success of companies like OverDrive.

But if you're using a Pretend It's Print model, the one thing you can't do is stop pretending that it's print without a really good reason. You can't say all of a sudden that your ebooks should vanish into thin air once they've been lent 26 times. Your story about ebooks acting like print no longer makes sense, and all those customers who accepted your story have complete Twitter-fueled meltdowns.

Now, if there was a good reason to puncture the happy bubble of Pretend-It's-Print, that would be one thing, but a close analysis of HarperCollins' strategy suggests that the responsible executives wouldn't be able to pass a math quiz even if the class nerd was sitting in the chair next to them.

Let's review the possible motivations for the limited-check-out ebook.

Increasing revenue

 For ebook expiration to create increased revenue, the increased sales resulting from replacement of expired ebooks would need to exceed the lost sales due to customer rejection of expired ebooks. I'm guessing that less than half of libraries will be willing to buy limited-check-out ebooks. Based on the outrage that librarians expressed on Twitter, I'm guessing limited-check-out books might be avoided like the plague. Apart from the fact that they negate the collection-building motivation for ebook acquisition, the increased cost of managing newfangled things that automatically get lost by the 26th patron will be too much for most libraries. Although there will be indicators on the record in Content Reserve (OverDrive’s purchasing portal) to tell librarians which titles are limited-check-out, there won't be any indications of this on the MARC records that libraries use to include the ebooks in their catalogs.

 I'm guessing that the added sales will be approximately zero. There are two reasons for this. Libraries can set the circulation period for their items; 1-3 weeks is a common range. That means that the expired books will be at least six months old and more often a year or more old when they would need to be repurchased. Most books are discounted heavily once they've been out that long, and the value proposition of the ebooks won't look very good.

 The other reason that added sales will be minuscule is that libraries will erect elaborate countermeasures. Once half a book's checkouts are used, the libraries will artificially reduce its availability. They'll hide the catalog record. They'll restrict access. HarperCollins will be lucky to get crumbs from a bake sale.

 I'm sure you're thinking, "but what about the years and years of residuals?" 75 years from now, HarperCollins will be getting those ebook renewals. Well, dream on, and if you sum the infinite series of geometrically decreasing yearly revenue, you'll find it isn't as big as you think. Unfortunately for HarperCollins , that sum is almost calculus, and even their high-priced management consultants couldn't do an integral even if they were stranded on a desert island with a copy of Gradshteyn and Ryzhik.

Protection of the retail market

 As I wrote just yesterday, if the library channel loses its friction, then there's a significant risk to a publishers retail revenue. If the limited-check-out ebook introduces the sort of inconvenience that would deter a possible book purchaser from using the library instead, the changed policy might be justified. But a limited-check-out ebook will look exactly the same to a patron as an unlimited-check-out one, so this possibility seems remote. Once the book expires, of course, the library option goes away. So there might be some depreciating value there.

The current library situation, however, does a great job of erecting an availability barrier. eBooks are so popular that in most libraries, many books have long waiting lists. Patrons are pushed towards less popular titles, which is a huge benefit for publishers, because the titles and authors that would not be selling are effectively marketed to new readers. It's hard to argue that anything on the list of most popular ebook downloads at OverDrive has suffered even a tiny bit!

 The only way that market segmentation will be affected by  the new policy is that OverDrive's engineers will be distracted from improving user experience by the need to modify systems to accommodate HarperCollins. OverDrive, I feel your pain!

 If a publisher is truly concerned with sales lost to libraries, the honest thing to do (as Macmillan and Simon & Schuster have done) is to not provide books to libraries at all.

Other Models

 What bothers me the most about the HarperCollins move is its lack of imagination. I wouldn't mind the check-out limit at all if it was part of a tiered price structure. The limited-check-out feature reduces the value of the book; this could have been a low-priced option alongside the full-priced unlimited check-out model. I'd also like to see experimentation with other lending models. For example, an unlimited simultaneous user, limited time license. A library could get its whole community reading a book together. Or packages of single use licenses that libraries could use to supplement a permanent license for a popular title. Or "explorer" packages allowing a fixed number of total checkouts across titles from a backlist. Experiments like these could be designed to bolster both libraries and publishers.

 HarperCollins may be inept, but it isn't being evil. Pricing for digital products is really difficult. Once you drop the pretense of print, you run into new issues of fairness. Does it make sense to charge the same for an ebook to a small library that you charge to a large consortium? Of course not. Does it make sense to charge for a blockbuster what you charge for a work by an unknown author? Of course not. It's easy to poke holes in a pricing strategy; it's much harder to come up with a regime that works for everybody.

I said it a year ago, and I'll say it again:

Now is the time for publishers and libraries to sit down together and develop new models for working together in the ebook economy.

OverDrive and the Library eBook Convenience Paradox

The OverDrive iPad App, released just last week, is nice. Luckily, it's not TOO nice. Let me explain.

But first- a bit about OverDrive. OverDrive, the leading provider of ebooks in public libraries, has been battling some user experience issues. At last week's Tools of Change conference, librarian Katie Dunneback (@younglibrarian) went through the twenty-one steps a patron needs to take before they can read a library ePub book on their ebook reader. Kirk Biglione joked on Twitter that "it's actually easier to make an ePub file than it is to check one out of the library".

Once the initial configuration process is done, however, it's not so hard to start reading library stuff in the Overdrive App (actual name: "OverDrive Media Console"). I find Overdrive's discovery interface- which is a website and not part of the app- to be a bit mystifying. For my local library, which gets Overdrive books through the "ListenNJ" consortium, the main problem is finding an ebook I want to read that hasn't already been checked out.  The growing popularity of ebooks  is such that most of the ebooks are checked out, and since these use the "Pretend-It's-Print" model, I can't read them when someone else is doing so. Worse, the Overdrive website doesn't let me browse just the books that are available. Do people really exist who want to browse books that are checked out?

The browse interface also mixes up audio books with ebooks. I think most users want one or the other. It lets you sort by "creator" (Do real people know what a "creator" is?) but it doesn't provide a list of creators to browse. Granted, most library websites don't do much better, but isn't that why they still have stacks to wander?

Luckily, Overdrive also distributes public domain books from Project Gutenberg. These have the magical property that a new copy appears on my library's e-bookshelves as soon as one is checked out, like the milk cartons that get restocked from the rear in my grocer's refrigerator. If there were Creative-Commons licensed "unglued ebooks" in the library, they would behave the same way.

Although the public domain ebooks are a real godsend, the Overdrive website handles these clunkily, too. When I first searched for "Moby Dick" I found only a Penguin "enhanced" ebook version that was already checked out. I had to do a separate search in the Project Gutenberg section to discover the public domain Moby Dick that's always available.

The OverDrive iPad app itself delivers a nice reading experience. There's a single app that works on both iPhone and iPad - if you already had the iPhone version, you just need to update it. It's not as slick as some e-bookstore apps, but pretty good for a first version. And the books are quite readable. I borrowed Christie Golden's Omen, a Star Wars novel. The reading experience is on par with the Kindle App; I particularly liked the positional indicators: OverDrive's "7 pages left in chapter" is much more helpful than the Kindle App's "Location 3013-3019 --- 44%". The best part of the process was I was sitting in a ski lodge 259 miles away from my library.

Despite the the website issues, this whole lending thing seems great all around. Library patrons like me get to read books from the library in our preferred environment. We're exposed, without risk, to a variety of books we might not have considered acquiring on our own. And apart from feeling obligated to support our library when the friends group asks for money or raising our voices when the municipal budget gets cut, it doesn't cost us anything.

So what's the problem? Why am I going around showing demand curves and mathematical inequalities, claiming that lending ebooks doesn't create economic value like it's some mathematical proof or something?

In doing that, I'm guilty of some oversimplification. So now I'm going to show you yet another demand curve and recomplexify everything for you.

Remember print books? Let's review the book industry's method of squeezing every last dollar out of a book's demand curve. It's done by segmenting the market. When a hot new book comes out, it's a hard-cover that costs maybe $30. The people who buy the book are those that value it the most and the truly impatient. If the book is successful as a hard cover, then maybe a year later it comes out as a softcover priced at $12.95. A whole new wave of purchasers buy and read the book. The hardcover and softcover markets are segmented because they attract a different audience. Consumers perceive this as fair because the softcover feels like an inferior product, even though the manufacturing cost differences are quite small.

Consumers who don't even want to pay for a softcover are served by libraries and used book stores. Although it doesn't cost anything to borrow a library book, you may have to wait for it to be available, you have to get yourself to the library, and when you're finished with it, you have to take it back. Instead of the cover price, you pay the price of time and inconvenience.

Another form of market segmentation is accomplished by splitting regional rights. A book might be priced lower in India than in the US (and higher in the UK) because consumers in each country have somewhat different expectations as to what a book should cost.

Market segmentation is harder to achieve with ebooks. You can't put a hard cover on an ebook, and price differences are harder to sustain across national boundaries when the commodity is purely digital. A publisher can drop the price of an ebook with time after publication, but this can be hard to do because of supply chain issues, author royalty contracts, and consumer perceptions of value.

The library ebook distribution channel presents another opportunity for market segmentation. Libraries "buy" the ebooks, resulting in revenue for rights holders. Consumers can read the books without paying for them, but they have to be willing to put up with 21 step configurations and account IDs, and face the possibility that a book might not be available right away and may have a long lending queue. At least with ebooks, there's not the inconvenience of going to the library again to return the book at the end of the lending period!

But imagine if the Overdrive website made it as easy to find and borrow a book  as Amazon's makes it to get a Kindle Edition. Imagine that you didn't need an Adobe ID separate from your library card number. What would happen to the inconvenience barrier that allows publishers to still capture the high end of the price curve at full price? It seems clear to me that without the inconvenience barrier, publishers would quickly remove their desirable content from library lending programs to protect their retail sales.

So here's the paradox: libraries can only be successful at ebook lending if they do a bad job of it.

While I don't think it's tenable over the long term for libraries to specialize in inconvenience, I still think it's very important for libraries to be offering ebooks through services such as Overdrive. Even if the lending models of today turn out to be transitional, they help everyone involved become comfortable with library ebooks. Once the library ebook experience becomes embedded in our everyday lives, readers, publishers, authors and librarians will be able to recognize the novel digital distribution models that benefit everyone.

It's No Pocalypse at Digital Book World

© Babette Ross

"It's like you're taking a first step on the road to the valley of death." The topic was ebook metadata, but the speaker's statement could as well be applied to the Digital Book World (DBW) Conference as a whole. "Fear no ebooks" was the message of the conference, and it was a welcome message to many of the participants that I talked to. "I'm just trying to learn about ebooks" and "we're trying to decide what to do" were phrases I heard more than once.

In contrast to O'Reilly's Tools of Change for Publishing conference, which is coming to the same venue only 3 weeks later, DBW is not going to scare the publishing community with revolutionary business models or fire and brimstone sermons about the dire future of publishing. DBW was about providing a security blanket and a helpful hand to trade publishers venturing into a world full of doubt and uncertainty.

Mike Shatzkin  (©Babette Ross)

DBW Shepherd-in-Chief Mike Shatzkin did a great job developing a modestly challenging and useful program. His opening list of suggestions mirrored the topics of the executive panel. He exhorted publishers to:   

1. Begin to engage with their consumers and communities.
2. Get the rights in order.
3. Don't rely on just Amazon and Google, reach out to other markets and channels through partners such as Ingram and Overdrive.

The mood of the conference, however, was set by conference organizer Guy Gonzalez, self-styled Chief Executive Optimist. Although one attendee worried to me about pervasive complacency in the trade publishing industry, Gonzalez's view is that publishing is an activity fundamentally essential to our culture, and that one way or another, publishers are finding ways to survive and thrive as their focus shifts from a print oriented supply chain to a digital ecosystem.

Guy Gonzalez (© Babette Ross)

The conference's discussion of the role of libraries in that ecosystem was emblematic of the conference as a whole. In a question for Tuesday's executive panel, Sarah Wendell of Smart Bitches/Trashy Books asked Macmillan US President Brian Napack why she was unable to borrow his books from libraries. His non-answer was that Macmillan was "hard at work trying to find a business model that will work for us", and no, libraries had not "fallen by the wayside". After the panel, Napack exited quickly; I'm betting it was not so that he could get back to the office and work on a library strategy.

Open Road Integrated Media CEO Jane Friedman disagreed firmly with Napack's remarks. Her goal is to have all her books in libraries, because the library consumer is not the same as the book buying consumer. Someone downloading an ebook from a library is "only one step away from being a customer."

The follow-up to this discussion came this afternoon, in a panel that Gonzalez called the session he was most proud of. Moderated by Library Journal's Josh Hadro, the panel included both a librarian (New York Public Library Deputy Director Christopher Platt) and big 6 vice president (Random House Director of Account Marketing Ruth Liebmann), which doesn't happen very often.

Platt explained the basics of how ebook lending works at NYPL, explaining that NYPL did a lot of work to familiarize patrons with the mechanics of ebook lending, and he pointed out that a patron interested in Jonathan Franzen's Freedom (as an example) had to be told that its publisher was unwilling to allow library lending.

Liebmann pointed out that libraries have mechanisms to reach out to readers and promote a publisher's materials, exactly the sort of engagement missing for most trade publishers. A library book does not compete with sales, a library book IS a sale. Libraries provide a revenue stream for publishers comparable to independent book sellers, and it's a profitable one- libraries never return books the way bookstores do.

According to George Coe, President of the Library and Education Division of book distributor Baker & Taylor, the library market constitutes a total of $1.9 billion in the US. He pointed out that libraries could reach only 2% of the market at the very most for a popular book, and it was exactly the same for ebooks. His company was doing everything it could to protect the profitability of publishers that participated in their ebook program. Libraries customers are also easy on inventory- 98% of their purchases come within 18 month of a books publication.

But it was Overdrive's Steve Potash who delivered the most powerful argument that libraries belong in the ebook ecosystem. The visibility that libraries give to ebooks is incredibly valuable. With the millions of page views the libraries were giving to ebooks, the publishers should be paying the libraries, not the other way around, according to Potash. It's worth noting that no other provider of ebooks in libraries has nearly as high a publisher-world profile as Overdrive. Overdrive is playing an important role in getting publishers to think about libraries as a distribution channel, and Potash's evangelical presence on the panel played well with the audience of publishers. He even gave them homework. "Go and try it yourself!" he urged. I hope they manage to do so.

Liebmann summed up the session, and unintentionally, the conference as well, when she described her "Library Listening Tour". By going out and meeting the customers, she learned about what they really wanted from ebooks, which was useful even if she wasn't going to be able to make everybody's dreams come true. Where her dreams going to come true? "I'm feeling so good at DBW, I'm thinking that maybe they will."

(Photos © Babette Ross, used with permission.)

Related articles

• Macmillan Still "Looking for a Business Model" for Library Ebooks (libraryjournal.com)
• When Will eBooks Hit Libraries? - eBookNewser (mediabistro.com)
• My Day at Digital Book World (smartbitchestrashybooks.com)
• Digital Book World: a CEO's view of the future (teleread.com)