2. The United States Market
The United States, with its long experience of digital publishing, has led the way in developing e‐lending schemes for libraries. The majority of publishers have readily embraced the concept, with non‐fiction, children’s, reference and academic publishers among the early adopters. The large trade publishers were slower to incorporate e‐ lending into their digital strategy, due in part to concerns from authors and agents. Today however, every major trade house is participating in library lending projects, although their approaches and business models vary.
HarperCollins has been offering e‐books to libraries for a decade. Titles cost about the same price as print, and the publisher uses a metered‐access model by imposing a limit to the number of loans per title: 26, after which an e‐ book must be repurchased.
FAST FACT
E‐book lending increased by 46% in 2013, compared to 2012
OverDrive user data 2013
In May 2013, Hachette announced that it would make its entire e‐book catalogue available to libraries simultaneously with print editions. Titles can be borrowed by one user at a time, and libraries can acquire unlimited copies. The price libraries pay for e‐books is 300% the print cover price, dropping by 50% for titles that have been in circulation for 12 months.
In April 2013, Simon & Schuster launched a pilot e‐book lending program with New York Public Library, Brooklyn Public Library and the Queens Library, making its complete e‐book catalogue available to libraries for a year, with unlimited one‐user‐at‐a‐time circulations and no limit on the number of loans per title. Library users are also offered the chance to purchase titles from Simon & Schuster – if they do, the library receives a commission on the sale.
In October 2013, Macmillan announced that it was expanding library e‐book lending to its entire e‐book backlist, representing more than 11,000 titles. Titles are available to libraries for two years or 52 lends (whichever comes first) for a price of $25.
Despite Penguin Random House’s recent merger, the firm continues with two distinct e‐lending models. In September 2013 Penguin announced it was making 17,000 e‐books available through distributor OverDrive. Titles can be licensed for one year under the one copy/one user model: frontlist titles are priced at $18.99, while backlist titles range from $5.99 to $9.99, i.e. similar pricing to that offered to individual consumers. Random House, in contrast, charges significantly higher prices to libraries but makes its entire catalogue available via perpetual licenses.
Case-Study: Overdrive
OverDrive the world’s biggest distributor of e‐books and audiobooks, partners with 90% of US public libraries. It offers a catalogue of 1.8 million digital titles to 30,000 libraries, schools and colleges. Their publishing roster includes Random House, HarperCollins, Harlequin, Wiley, Macmillan and Bloomsbury, although the terms of engagement vary. Macmillan, for instance, gives OverDrive most of its backlist but none of its frontlist, while Penguin, Hachette and HarperCollins release e‐book titles to OverDrive as soon as they’re published.
OverDrive operates a number of lending models. The most prevalent is the one book/one user model, which lets only one person borrow a book at any time. Its popularity (representing at least 85% of OverDrive’s volume) is due to its straightforward nature, being based on the same principles by which libraries loan print books.
While one book/one user is the dominant model (representing at least 85% of OverDrive’s volume) the firm offers publishers a number of alternatives. The always‐available access model, allowing simultaneous use for an unlimited number of readers over a set period works on a subscription basis. According to OverDrive, it is gaining momentum in the schools and education sector.
The metered access model used by HarperCollins and Macmillan is another alternative, and OverDrive offers a fourth category, “classroom sets”, specifically aimed at letting publishers lend titles to the school market, which is significantly larger in revenue terms than public libraries.
FAST FACT
Mobile platforms account for two‐thirds of all e‐lending traffic
OverDrive user data, 2013
79 million e‐books were borrowed through OverDrive in 2013, a 46% increase over 2012. The action is increasingly taking place over mobile devices: mobile checkouts increased by 147% in 2013 and mobile platforms now account for two thirds of all traffic.
CASE‐STUDY: HOOPLA
Hoopla is a digital platform which stands in contrast to the one copy/one user lending model. Its rationale is that libraries need to provide a better user experience by making their digital services as engaging as the apps and platforms people encounter in the retail space.
Created by Midwest Tape, a media distribution company, a beta version of hoopla launched to 10 libraries in February of 2013. Today, over 300 library networks, including Toronto, Chicago, San Francisco, Boston and Los Angeles are using the platform, which offers video, music and audiobooks.
With hoopla, publishers set and adjust the price for each title, a vendor portal showing reading activity in real time. Midwest Tape say the model solves publishers’ distribution problems while maximizing title availability for readers, and that it’s more transparent than subscription services as every publisher and author is paid each time a book is read.
Hoopla is not a subscription service or a licensing model, nor does it charge libraries any annual fees or setup costs. Regarding budget control, hoopla provides libraries with administrative tools for financial oversight, including monthly item limits per cardholder and monthly spending limits. Libraries only pay for what is actually used. Midwest Tape points out that in alternative models, libraries take on a great deal of risk by investing upfront in titles that may not circulate and by buying subscriptions that don’t get used.
The service positions itself as a gateway for discovering backlist and midlist titles. Midwest Tape says that in the first four months of 2014, 82% of their 12,000 audiobook titles circulated.