Amazon to Launch Library Lending for Kindle Books
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1. I was aware something like this was coming. I've been wondering when it would happen, and just how. I think they did it right, from a business perspective.
2. I think Amazon is well-intentioned, as far as it goes. I think they understand what I've been saying for some time now--that, from a business perspective, library lending is a price-discrimination move.
3. I think it's another element in a long-term disaster for libraries—the loss of first-sale rights, the plague of licenses that turn libraries and their values inside out, and the subcontracting of library's core value and mission to businesses with no basic interest in either.
Ebooks and the public library worry me. Well, the future of the public library in general worries me. (I spend all day in a large academic library, and that just a different ball game all together.) I just can't see any reason for publishers to want libraries to loan free ebooks. Is there any real evidence that library use drives book purchases? For print books you could make the argument that yes it would be easier to drive to the Barnes & Noble and buy it (or easier still, get it off Amazon with prime shipping and have it delivered to the door) than it would be to get on the waiting list at the library for the latest bestseller. But for ebooks that you download from your library at home? The only problem I see there is that the last time I used overdrive to get an audio book from my public library I thought it sucked, so now I have an audible account. On the other hand, there is still a digital divide in this country, and public libraries still serve those folks well. On the other other hand, whenever I go to my public library the place is packed. People are using the computers. Little kids are checking out books. Maybe public libraries serve a function, but it isn't necessarily the one we think it is serving based on how WE would/do use a public library.
That question is: What is the financial effect of digital library lending on publishing?
The negatives is clear:
* Much library lending cannibalizes consumer purchases--people get it at the library, so they don't buy it.
* The easier it is to get a book at the library, the more is cannibalized. Opportunity cost substitutes for real cost. As Eric Hellman has demonstrated, the economics of ebooks in libraries only work if they are hard to get. This is why publishers resist online lending of library books, flexible loan periods and etc.
The positives (for the publisher) are:
* Libraries do pay something--the base amount. Although this amounts to about 1/10 of the value they get, it's money.
* Publishers can crank up the base amount until the pips squeak. Without first sale, libraries have no other option. This is what journal publishers discovered years ago, and why there are $30,000 journals out there now. The question is whether libraries can sustain paying for the real value of the lending they facilitate.
* Library lending generates buzz around a title.
* Some library lending doesn't cannibalize sales. Those people wouldn't buy the book, so nothing is lost.
* Some of the lending turns into buying--especially if the loan period is inflexible, the book can't be renewed from a distance, etc. This is, I think, a major hope of the Kindle effort.
Or are they only going to supply the evergrowing horde of selfpublished books on their site?
Well done amazon for finally catching up with your competitors.
#3 - why are ebooks any different from pbooks in this regard?
I'm interested (although always baffled) by your points about loss of first-sale rights and the plague of licenses. I feel like these are the fine deets we need to be focused on.
Because paper books have a first-sale right. Publishers cannot stop libraries from lending them. They can't charge them more to get the books either. (Or rather, they can try, but libraries can buy from anyone who sells books, so they can't succeed.) Ebooks are different. They are licensed goods. Libraries do not get a right to buy the book along with others. They pay whatever the seller wants them to pay. And they don't get a right to lend the book. They have to acquire that right.
The math is simple. 35-40% of all "reads" of a book are through libraries. But publishers buy only 3-4% of books. This 31-37% gap represents reads for which publishers aren't compensated. It's not surprising that publishers have never liked this state of affairs. Until now, however, they have not been able to do anything about it. Now they can.
See my posts on ebooks for more on the economics and legalities involved here http://www.librarything.com/blogs/thingology/category/ebooks/
1) Find book you like.
2) Pull up online card catalog.
3) Click to have book transported from other branch to your local one.
5) Get into car and pick up book.
7) Get into car and drop off book.
1) Find book you like.
2) Pull up online card catalog.
3) Click to download the book.
Notice how the ebook route has taken out all the most annoying steps. Hence, they've just elevated the library checkout in convenience. It's actually just as convenient as the most convenient sales model (downloading books from an estore) and much more convenient than driving to a retail store and buying a book.
The only thing that's still a gotcha is that libraries have limited numbers of "copies" and so they may all be checked out. I don't usually run into that now, but it's possible that if I were checking out ebooks and libraries made that super-easy, more people would compete with me and I'd run into it more.
I'd like to see how that figure was arrived at. 4% I could possibly believe, though even that sounds high. Who did they ask? how did they ask them? 40% of all reads of books by people who are in a library???
Of course it does very much matter what sort of book we're talking about. Some obscure textbook, on a minority subject, outrtageously priced and never seen in a bookshop. Maybe, just maybe that gets as high as 40% if you include academic libraries (ie where there is little public access) as well.
40% of all books, and all readers, including fiction. No chance.
The numbers, however, are for "transactions." It doesn't count lending of physical books between non-library purchasers, used books, etc. You count transactions because they are (now) controllable by publishers/sellers. So long as physical books remain, there won't be any way for publishers to monetize lending them, or restrict or monetize used book stores.
Or are they only going to supply the evergrowing horde of selfpublished books on their site?"
What I'm trying to understand here is if these are going to be books supplied by the the big publishers, such as Random House, Penguin etc.
If not then it is rather less of a big deal and will disappoint a lot of people.
Will Amazon be selling these books to libraries/Overdrive? If so then they appear to have just gained a competitive advantage and I just cannot believe publishers would be this stupid. So the logic leads me to believe these books won't be by the Big 6.
Probably I'm missing something here.
ETA: I ask because 90%+ of my library is made up of books from Half Price and my local used bookstores. I especially find it hard to believe the latter would be true, as some of the independents I bought from don't seem big on databases. Most of them just use the little calculators that have receipt tape. One of them actually did all their receipts with pen and paper.
Am I missing anything?
Right. No. See 10 paragraph 2. That's interesting, but it's economically unmonetizeable. Good word, that.
But it's still what happens. So I think it's far more than "interesting", but is in fact vital to the argument.
ETA: Which is why I got so frustrated with your music piracy discussions. It's not that I disagreed with you, just that I knew a lot of the foundations were shaky because there was handwaving involved and then claims of certitude.
I'm really really struggling to comprehend 40%. It just doesn't match with the world as I observe it. And being a reader and a library user I do tend to observe books around me.
ETA - are these figures by "work" or by copies? worldwide or US only? by some moneyvalue or actual copies? I can believe there are ways to get an answer of 40%. But that is a very specific answer to a different question.
I wouldn't object to saying 'Of "reads" through retail sales or libraries, 35-40% are through libraries.' At least then the reader knows what you're claiming and can more easily put it in context.
But after reading the announcement, I thought that, "no, this does not allow libraries to facilitate lending of their ebooks."
This allows merely Amazon to leverage the buying power and reputation of libraries to buy more books directly from them. Case closed. Look how they emphasized people keeping their notes or whatever that they made while having the book checked out. What does this have to do with libraries and/or Overdrive's bottom line? They could provide this service for themselves, anyway, and not go through libraries at all.
I agree wholeheartedly with your 3rd point:
>3 timspalding:. I think it's another element in a long-term disaster for libraries—the loss of first-sale rights, the plague of licenses that turn libraries and their values inside out, and the subcontracting of library's core value and mission to businesses with no basic interest in either.
The way that ebooks are being rolled out by entities as a service, and not as an object that is owned, will kill libraries in the long run.
I've been telling this to other librarians for several years (if they would listen): Ebooks (as they are now) breaks the library model, and we need to fight back.
It's fucking ridiculous, if you ask me. The basic level of librarian illiteracy on this topic is just the pits. Even ebook optimists must admit the question cuts to the core of what libraries do and will do, but a majority of librarians are still at the "Why isn't this just the same thing we always did?" level.
Why? Largely because of the difference in renewal policies, with the awkwardness of Overdrive navigation added in. Most physical books can be renewed multiple times; I can request a book from the library as soon as I decide I might be interested in it, and I can then wait a couple of months before actually reading it.
Ebooks are currently not renewable in any straightforward way; you have to essentially go through the process of checking them out again, and that process isn't as smooth as I'd like. Plus there just aren't enough ebooks to go around, so it's often just not possible to renew at all. And if renewing fails for whatever reason, the book can disappear in the middle of the reading experience, which is a lot worse than a 25-cent fine (and which is where I expect Amazon will win big).
So in the end, I find it a lot more of a hassle to borrow ebooks than to borrow physical books. Taking ten minutes out of my day to stop by the library isn't a big deal if I can then keep the books for a long time; constantly having to faff around on the computer is a lot more annoying.
Plus there just aren't enough ebooks to go around, so it's often just not possible to renew at all.
But that is often true of physical books as well, particularly new and popular books. I have, sadly, run into that problem more than once! Nothing like being halfway through a tome like Team of Rivals and finding that you can't renew it!
To just take one example, the disappearing book. What's to stop the library from just charging you a 25 cent a day fine instead of making that book disappear for you? See, that has nothing to do with eBooks as a format and everything to do with technology/rules imposed on libraries from above.
Why aren't there enough copies to go around? Same reason!
Why is renewing them not a straightforward process? Same reason!
Why can't you request an eBook and keep renewing it for a few months like you do with pBooks? Same... oh, well, you get the point. :D
This is one of the problems with the way that ebook policies have been implemented in libraries. They are NOT just electronic versions of paper in the same way that ejournals are. The problem here is that they should be just as easy to use as print; easier, even. Libraries allowed ebooks to be "purchased" but we don't have the actual files, nor did we insist on them. That is now coming back to haunt us. What happened to Overdrive with Harper Collins was a wakeup call for libraries, but really should've been expected. I keep telling friends & family - purchase all the ebooks you want from Apple & Amazon, but never think that you own the files. Those companies can take those files back and disable your device at any time.
I think this is just a marketing ploy to make even more money and market share for Amazon. I don't blame Amazon for that; they are a publicly-owned business and want to make money. But, it will be interesting to see if librarians are as outraged over this as the Overdrive/HarperCollins incident. They should be.
Allow me to attempt to unpack your statement. By "library model" you mean "the current technologies and limitations currently forced on libraries for eBooks." By "work" you mean "is allowed by publishers", right? I mean, I don't consider it to "work" if the meaning is "work as a means for me to read books".
Tell me if this is an incorrect rephrasing:
The model of ebook lending forced on libraries by publishers is only allowed by those publishers because it is inconvenient, and therefore very few people will take advantage of it and cannibalize more lucrative books sales.
See Hellman, "OverDrive and the Library eBook Convenience Paradox"
The inconvenience--opportunity cost--makes it relatively unattractive to people who would buy, but attractive to people willing to trade time/bother for savings. It's the same principle behind coupons, early-bird specials, etc. It splits the market by price sensitivity. This case is slightly different because the patron doesn't pay directly, but the principle is the same.
The point is, however, it's not the numbers. It's whether you've got the right group selected. If coupons were random discounts, they'd be a bad business idea. In fact, they're a great one.
The key difference is that publishers can control ebooks a lot more.
I think Amazon is in power here. Sure, publishers can opt out, but Amazon's power over publishers rises as they become the main market for their product, and competes with them. In the short term this may actually move some publishers to lend their books out, as Amazon starts applying the screws. Long-term, having essentially one gateway and platform for books in the world is terrible for libraries, and, more generally, is a grotesque and frightening dystopia.
I think it's time to take a week off and write my ebook book. Nobody else has done it yet. Nobody's really thought deeply about the cultural change here. And it's mostly over, I think. The core questions have been decided, and the logic of technological lock-in and networks is taking over.
But really it is the numbers. The reason this works is because a small number of the total number of potential customers will use the coupons. If 99% of customers would use coupons, they'd be a bad business decision. It's always about the numbers, in the end. Everything else is just speculation about how the numbers are going to turn out.
35> I don't think there's really any point in talking about some idealized ebook that doesn't exist. That's not driving any of the decisions here.
It's 100% driving the decisions here. First, it's not an idealized ebook, it's just an ebook. Having a title disappear from your reader isn't a feature of an ebook but is instead a feature of someones implementation of it. I'd say that the ebook that they can remove from your reader is an idealized ebook from the publishers point of view, in fact.
As I already pointed out, without the restrictions and hurdles that are intentionally put in the way, the ebook becomes much more desirable. The decision is driven by what will happen if you don't put these restrictions and hurdles in the way. Again, see post #8. If you don't take that into account, you'll be forever groping in the dark trying to figure out why publishers are doing what they're doing.
Honestly, I find myself scratching my head over this e-book revolution. Out of everyone I know who reads, the percentage that regularly reads using ebooks is in the single digits. I just don't see people whipping out ereaders (or ipads) left and right. We get numbers about how ebooks are outselling hardcovers, or outselling paperbacks, and I wonder why I don't see them everywhere. Also, the fact that those numbers come from the people who are trying to build a huge business out of encouraging ebook buying makes me even more skeptical. Seriously, where are all these ebooks being read? Did I not get an invitation to the party?
Well, the transaction numbers above suggest "the numbers" would be 35% At CURRENT levels of difficulty in getting a book, 35% of the time people prefer to lend at a library rather than buy. For those transactions, publishers get about 1/7 the money, or $0.50 as I've calculated before.
Some people think that losing 1/3 of your money works because libraries promote books, and library people are cheap people who wouldn't buy if it was offered to them. I suspect that's quite wrong. But we'll see how the numbers turn out. And we'll see how ebook lending turns out too. Is the convenience level similar enough to produce the same 35/65 split, will the split get higher or lower?
But once again, you're leaving out the entire used book ecosystem. I really don't understand how you think you can know an answer when you don't even know the size of what you don't know.
The point is, the used book ecosystem doesn't impact the economics of ebooks vs. paper as far as publishers/sellers are concerned. And if they did care, they have no control over it—they can't stop it, and they can't monetize it. It's irrelevant to the question.
You're going to write a book and just sweep this whole part under the rug? ;)
>39 timspalding: I actually think publishers may have showed their hand too soon. Rather than letting libraries transition over more fully to an ebook model and then tightening the screws, they've given everyone a warning about what's to come. I suspect that this will just lead libraries to stick more to paper books than they otherwise would have, and that this will slow the whole ebook adoption process.
When you put it that way, though, what's the point in talking about ANY sort of ebook? Since when do publishers care what you think?
In any case, what started the conversation about ebook lending without all the ridiculous hurdles was reading_fox's question about why ebooks are any different than pbooks in terms of how they cannibalize. This led to a discussion of why NOT putting up barriers will make ebooks "superior" in a lot of ways to pbooks because of the potential distribution model. The reason it's worth talking about is because people complain about things like overdrive, DRM, files disappearing from the readers, etc. To understand why any of these things happen, you have to understand the situation if you didn't have those. As such, I'll keep talking about it. You can always skip those posts. :D
Speaking of which, one interesting aspect is without all these hurdles (and, to some degree, even with them), libraries become much less local. If I were to move to Maine, what's to stop me continuing to check out ebooks from my current library here in Minnesota? All I need is my library card, and as far as I know those don't expire. I find it interesting as it moves libraries away from being like a local brick and mortar store towards being more like iTunes.
Hmm, so the books I buy at these imaginary stores must also be figments of my imagination, so the money I pay for them must, again, be imaginary! So used books are free!!! Hurrah! I'm off to buy more . . .
For reading_fox's question, I'll repeat that the key difference with respect to cannibalization is that publishers are effectively able to control ebooks in a way that they can't control paper books. They may not like libraries cannibalizing their sales of paper books either, but they can't really do anything about it.
I don't know if you were taking my comments in #25 as an example of people complaining about overdrive, files disappearing, etc. My point wasn't to generally lament the sorry state of ebooks as some incomprehensible phenomenon, but just to state what the current situation is.
But only up to a point. The more restriction publishers try and put in place to 'control' ebooks, the more they drive the public (though not libraries) to circumvent these controls. Which leads to piracy and uncounted 'reads' equivalent to used books.
So publishers have to play a delicate game. otherwise they'll be shooting themselves in the foot later on. Whether or not they realise this or think it a big enough problem is another question. And either way might not help libraries.
I still want to know what Tim's source was for non-library 'reads' of a book. Because that 35% seems more wrong every time I think about it.
There is a link at the bottom of that article that shows "how the process works". Prepare to be less than impressed. You have to leave OverDrive and go to Amazon.com to complete the 'check out' and then...
Adding—with some estimation—of the total number of book checkouts per year, compared to the total number of sales.
I'm very disappointed in Seattle for doing this. They're a very progressive force in libraries. Long-term ebooks are a down-elevator for libraries. Having it all take place in the context of an Amazon-monopoly "stack" is even worse.
That said, there's no professional up side in being right on this; being down, even when your predictions are borne out again and again, gets you nowhere. The upside is in being "excited."
There are some awful things, though: there aren't many books (around 1100, maybe that will grow), most of them are checked out (I think there were 300 available, many of then children's books), you only get them for 7 days (long enough for fiction but not most stuff I read and you have to schedule your reading around it), after 4 days Amazon sends you an email telling you that if you buy the book from them or check out the book again your notes will again become available again. By hiding your notes it sort of defeats the purpose of library books for me -- my general use is to check out books I don't want to own and use them for a specific purpose, generally involving taking notes.
My little anecdotal entry into the discussion.
The thing I found most annoying is that since I don't have wi-fi on my kindle (I have 3g), I have to check out the book on the library website, go to the amazon website to download the book, and then use a usb cable to download the book from my computer to my kindle. That is mildly annoying to me, but it's still worth it to get free books and only took a couple of minutes.
Overall, I'm excited about the opportunity to check out library books on my kindle.
Me, too. I got caught up in complaining and forgot to mention that. I suspect things will improve.
But (getting nosy), I thought the only 3G Kindles were also WiFi. That is, that your choices were WiFi or WiFi AND 3G with no "or" option. I have been wrong a couple of times, though -- what version is your Kindle?
Not to pry, but that's a little tidbit that I hadn't heard before and I'm not sure how I feel about it.
Not terrible, but a little creepy, like the "courtesy calls" you get from the credit card companies, just checking in to make sure everything is OK. Uh huh.
Your public library book will expire in 3 days. If you purchase The Hidden Reality: Parallel Universes and the Deep Laws of the Cosmos from the Kindle Store or borrow it again from your local library, all of your notes and highlights will be preserved.
I don't have any idea what the business model is, but it looks like publishers are making available to Overdrive titles that aren't pouring off the shelves, so this could be another marketing channel.
The book I "checked out" remained on my Kindle after the expiration date, so I was able to finish reading it despite the short check-out period (7 days). As soon as I connected the Kindle to WiFi I got a "Your circulation period has ended" type-of notice with a handy link to buy the book from Amazon just in case I wanted to -- you know, to make my life easier.
For me, reading books is better on a Kindle than a dead-tree version, if I have bought the book. I'd rather read a paper copy of a library book, though, because if I have to take notes on paper anyway Id rather have the paper book to thumb through. One down side of a Kindle is that it's hard to browse back to something you read earlier -- you may know exactly where it was on the page but not on what page and scrolling through pages takes time on a eBook reader.
Still, this is better than nothing. It may not be worth what it costs my library to provide the service, but that will take a little digging.
1. In Amazon Search box, select books
2. Click on GO
3. Scroll down and select Prime eligible box
4. Select Kindle ebook as your format
5. Select appropriate department under books
6. Finally, start browsing the Kindle free lending library. 1 book per calendar month after you return the previous month's book.
Browse Kindle lending library
Optional step: grumble about it taking so many steps...