Eli Neiburger is Associate Director for IT & Production at the Ann Arbor District Library in Ann Arbor, Michigan. He’s the author of GAMERS… IN THE LIBRARY?!, published in 2007 by ALA Editions, and has written and presented extensively about libraries, content, and the Web. Find him on Twitter, he’s @ulotrichous.

The media explosion of the 20th century is imploding. As the text publishing industry is inevitably transformed by the Internet and left smoldering in a changed world, libraries—most particularly public libraries—are feeling the poke of a very sharp stick, with no carrot in sight. Created to store and organize the information of their communities, public libraries capitalized on the mass-market media explosion of the 20th century to aggregate and circulate commercial (and predominantly recreational) prefilled content containers. It was an irresistible opportunity to build new, unique value, and it worked so well that a majority of users think of their public libraries predominantly as a prepaid, only slightly inconvenient way to get temporary access to entertainment-filled containers.

The shakeouts of the digital text market have barely begun, but the players and battle lines are well-established. Following its traditional publishing plans, Big Text has a lot of risk floating out there, with distressingly few levers or knobs available to manage that risk. And there goes the public library, still trying to do business as usual, an anachronistic horse dragging an ice wagon past row after row of homes where shiny Frigidaires hum away.

Publishers know they can push libraries around a bit and we’ll still eagerly line up for galleys each summer. They have to close whatever holes they can in their business models. Their nascent ebook businesses are at the mercy of many variables they can’t control, circling a consolidation event horizon that has a jumpy look to it. The hoped-for return on big transitional investments is hanging in the balance. The public library, never a big part of publisher revenues, has become little more than an analog hole in the digital publishing business model.

Driven by a gut feeling but without much evidence, publishers are fretting that every library borrower is one less sale, especially as the user experience of buying an ebook and reading it once converges with the user experience of “borrowing” an ebook and reading it once. This ignores the fact and emerging evidence that most library borrowers were never considering a purchase, and that those library users are already among publishing’s best customers. Also, while ebooks are over-priced, many publishers still have expensive processes to transition, and the early adopters are still lining up to help.

So, public libraries, faced with growing demand for ebooks, are stuck with few options, saddled with counterintuitive restrictions that our customers refuse to believe are beyond our control (“No, you don’t understand, I want an ebook, and there’s no waiting for ebooks.”) crappy trust-chain focused tools, and library-specific licensing price points that, even while embracing publishers’ restrictive terms, increasingly say “GO AWAY LIBRARIES.”

On top of that, the net impact of the increasingly frictionless online market for text, the echo chamber of net-based media and the ever more rapid turnover of hotness means that the demand for hot things is more squished than ever into a taller, narrower peak. Meeting—or even denting—the demand for the new hot thing at public libraries is more out of reach than ever. Meanwhile, big companies are experimenting with commercial ebook lending libraries unfettered by the artificial scarcity forced on public libraries, and authors—if not publishers—are finding that being a part of it is a good idea.

Finally, there’s the challenge of ownership. The first-sale doctrine took good care of us for years, but if the only thing that’s for sale to public libraries are licenses and we’re dependent on software trust-chains and continued operation of intermediaries for access to those licenses, how can libraries guarantee ongoing access to materials for our communities?

Something’s got to give.

What to Do?

In many ways, our public library here in Ann Arbor, Michigan, is on the front lines of this phase change. The Ann Arbor District Library (AADL) has made significant investment in technology and in meeting the needs of 21st-century users, and our community has a voracious appetite for reading and media in all forms. For example, as early as 2008, AADL processed the most circulation transactions per capita, but was also in Amazon’s top 5 that year for most books purchased per capita.[1] Readers borrow, and readers buy. They’re not mutually exclusive or zero-sum in our community.

In addition, because of our investment in technology and in-house expertise, we’ve been able to set a high bar for usability of our catalog and online services. Today, our customers’ expectations are simply not met by the ebook options available to us on the mass market.

We want to deliver digital content that’s in demand, but we want to do it in a way that meets our users’ expectations. In a system where there are no limits on borrowing or requesting physical items, that means leveraging the potential of digital distribution, not just offering digital services that are more restrictive than their physical equivalents. We also want to ensure compatibility by using standard, unencrypted file formats that any device can display, without requiring proprietary software, support, or licensing servers.

You can see where this is a problem in the current publishing environment. We know that we have no leverage with big publishers or content platforms, so we developed a licensing model that works for our patrons, the library, and even the rights holder, provided that they are ready to do business in this century.

The AADL Digital Content Agreement is a starting point in negotiation with Independent Rightsholders or Creators. The Agreement establishes that the library will pay an agreed-upon sum for a license to distribute to authenticated AADL cardholders, from our servers, an agreed-upon set of files, for an agreed-upon period of time. At the end of the term, we can either negotiate a renewal or remove the content from our servers.

The licenses specifies that no DRM, use controls, or encryption will be used, and no use conditions are presented to the AADL customer. In fact, our stock license also allows AADL users to download the files, use them locally and even create derivative works for personal use.

This approach removes the complexity from digital distribution. It takes ebooks, audiobooks, music, and videos—all digital objects—back to what they truly are: files on a web server. Logged-in users can download this stuff. That’s it. They don’t have to return this information to the library or otherwise destroy it.

This tends to be where the rightsholders we work with either get it, or they don’t. Users don’t have to return the information to the library because library users have never had to return the information they got at the library, only the containers! Digital objects don’t have to be returned to the library, because the library still has them. Digital content is indistinguishable from magic when unrestrained by a license.

So, this isn’t a checkout. It’s a download. Circulating bits makes no sense, and no business model can change that. When something can be infinitely duplicated, it cannot be made scarce in the process of distribution. This totally breaks the concept of a library, but the economics of sharing still make sense. In this case, the community is not pooling its funds to buy retail containers that are then shared. Instead, the community is pooling its funds to pay upfront to support rights holders whose releases they are interested in. The community receives the ability to take rubbings of these works for their personal collections.

Users get access to a completely hassle-free, expertly selected, and high-quality collection of files they can download. The standard agreement defines what AADL customers can do with these files. Libraries get sustainable, supportable cross-platform content that can immediately fill demand. And rightsholders get a stable, predictable revenue stream in the form of a few big, reliable checks instead of lots of little unpredictable ones. And if more libraries can get the technical, legal, and acquisition infrastructure to support this model, rightsholders can grow this revenue stream into a game-changer.

Why It Works

Of course, this download collection has little that anyone’s ever heard of. The mass market stuff is just not available to license on these terms, and it may never be. But for creators who are making niche, quality content, this license can truly be a win-win. Instead of looking at the license fee as compensation for something like a one-time sale, the pricing works when the rightsholder considers how much revenue they would like to expect during the license term from our 54,000-odd cardholders. For niche creators, it’s not hard for the library to beat that number, and all they have to do to get it is agree to the license and deliver the files to our server.

They’re not releasing their content to the world (especially because it’s already out there). They’re just granting a year or so of downloads to these 54,000 people. They get more revenue than they would likely get from those people up front, and the library gets sustainable, usable digital content for its users. This approach also incentivizes the creation of further works by the rightsholder, as the library’s interest in older works will lose value over time. This likely decline encourages creators to bring new work under the license at renewal. This helps keep the license fees up; it may even provide a path to something like ownership, where the library eventually acquires a license to permanently offer older files for download, with no external authority, infrastructure, or permissions involved.

While the business model here doesn’t scale much past independent publishers, the fact is that the lines are pretty much drawn for digital distribution of mass-market content, and no matter who wins, libraries lose. We’re not invited to any of these parties, simply because there is perceived to be no business case for licensing libraries to circulate digital content, beyond mining the temporary vein of transitional desperation. It could be the commercial market consolidates entirely under a paid lending model, and libraries are left with only independents who will still sell to us at all. It sounds apocalyptic to genre fiction buyers, but libraries have always been all about the long tail. The big peak is an interloper over the millennia we’ve been in business.

When everything is everywhere, libraries need to focus on providing—or producing—things that aren’t available anywhere else, not things that are available everywhere you look. Developing relationships with independent publishers is nothing new for libraries. Together we can get unique, high-quality content in front of library users and grow the only business that really counts here in this century: audience.

A Glimmer of Hope

This approach offers an opportunity: we can rebuild the creator-consumer relationship, using the public library as the only needed intermediary. Wouldn’t that just be awesome?

Anticipating a day when the app-storification of the entire content industry is complete, the library might be the only place left willing to pay real money for content, provided it’s on our terms. When most basic content is distributed at prices below the impulse threshold, library licenses might be the only up-front money available once the speculative advance business finishes flaming out.

There is a transaction cost problem, both for the libraries who could conceivably need to do business with thousands of publishers or creators, and small rightsholders, who could conceivably need to do business with thousands of libraries. This could produce some new opportunities to aggregate the buying power of libraries while stabilizing and simplifying the revenue streams of the rightsholders. Instead of libraries stuck nowhere near the table with major media interests, libraries could become significant parts of more creators’ businesses, jointly developing content relationships that benefit library users, publishers, and creators alike.

Digital content doesn’t have to kill the public library. Libraries can diversify their value to their communities, continue to develop circulating collections of physical items that bring unique value to their communities, and aggregate the buying power of the community to keep independent artists producing good stuff for a real, paying audience. With licensing that embraces the digital format instead of resisting its potential, the library can give the user the experience of downloading free media, and the rightsholder the experience of selling paid media.

All we have to do to get there is to stop chasing blockbusters and take responsibility for our own legal and technical infrastructure. The future is ours to invent! Go Team Library!

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