19 February 2010

My Presentation at the Digital Symposium

Ebooks and libraries: two subjects that are often discussed separately but when taken together produce such a wide range of reactions from publishers. In many ways, publisher responses to ebooks for libraries actually help define the publisher, their business model, the way they approach their content, and the role they play in the full supply chain. It is easy to identify those that are dynamic and those that are traditional or tied to the “mother ship” overseas as is often the case. Those who are willing to engage with the full spectrum of customers - in our case, libraries - and those that won’t. Those who are preparing for the digital future and those we feel will be left behind.

As many of you know, James Bennett has been supplying public and academic libraries for over 40 years. With digitisation, we’ve seen one of the most challenging periods of our history. If we rewind the clock back only seven years, it was a time when library suppliers were selling dozens of multi volume reference sets to our customer base - encyclopedias with price tags in the thousands. Multi volume reference sales were priority products with targeted marketing campaigns and good margins. Fast forward to today and print reference sales have been cut dramatically as libraries opt for online versions, a site license, perhaps a direct relationship with the content provider, and in some cases no purchase at all because patrons choose to use freely available web content. Trading terms are very different. The goal posts have moved.

Of course it made sense for the reference market to shift to online as the product could be kept up-to-date, thereby making it more valuable to the library patron. Some libraries still order a print version but we’ve seen a massive shift to online reference. One of the leading players in the reference market kindly advised us prior to this Symposium that in Australia a staggering 75% of their sales are now from their online products. The sales channel has evolved.

This discussion is not about digital reference. I use the example merely to highlight what’s happened in the last few years. For library suppliers, it was digital reference that prepared us for the ebook world. It was a sign of things to come…

James Bennett entered the digital world in 2003 with our own ebook platform – Etitle. Allen & Unwin was the major publishing partner and a handful of other publishers supported the product in its early days. Targeting university libraries – a small market in terms of numbers but large in annual dollar spend – we offered only Australian scholarly and academic titles. Back then, publishers were concerned about their existing contracts and ebook rights, they cited lack of resources and time to review, there were issues with conversion costs, return on investment in such a small market, when to issue the ebook, pricing models, file security and of course the cannibalisation of the printed work.

These issues haven’t changed. The marketplace did. Etitle became superseded as bigger players entered the academic library market. Being solely Australian, Etitle could not compete with the larger players who had the breadth of product libraries wanted – US, UK, European published materials as well as Australian content where it was available. Ebook vendors with hundreds of thousands of ebooks on offer – as opposed to our hundreds. In the past five years, the major ebook players have become well and truly established in the academic library supply chain. EBL – Ebooks Library from Ebooks Corporation based in Perth, Netlibrary, Ebrary, Myilibrary from Ingram, Dawsons in the UK and Blackwell Book Services came up with their own products. Publishers too created their own platforms, investing money in digitisation even when their ebooks were already in the portals of the ebook vendors, but it was about controlling the content and having direct access to the end user.

We supported ebook platforms where available however this was complicated with the single e-ISBN issue that we now needed to address. Yes, silly us! We used the ISBN as the primary identifier in our database! Despite recommendations from the international ISBN agency, not all publishers created a separate ISBN for their ebook vendors and this created more than a headache or two for us as an onseller of these products across multiple platforms. We entered a whole new bibliographic world, one that was slightly more complicated when we started selling both publisher portals and via ebook vendors. Which platform did the customer have? Where was the order to go? With so many technical workflows and with limited time today, we’ll save the e-ISBN issue for another day, another soapbox.

The academic publishers in the room would know that James Bennett has been an agent for EBL for several years now. A few years ago EBL sat comfortably in our Top 30 suppliers, then the Top 20, the Top 10. Astounding growth figures – from 2008 to 2009 270% growth in dollar value, 578% in units. This year ebook sales continue to track between 100-200% growth on previous periods. They have become a major supplier to our business and to our libraries.

If we go back a few years, ebook sales were a little hit and miss. We’d get a six figure sale one month and then nothing for months. Academic libraries were moving more slowly than we originally anticipated to “e” – often using special budgets - and we were all navigating the ebook waters together.

As we worked our way through bibliographic data issues we also had to come to grips with different margins and different workflows. Receiving and invoicing processes had to be totally reworked for ebooks, afterall you aren’t physically handling anything! New title workflows, promoting through our kit service for example, the role of the sales representative, all had to be reviewed. And of course, over time, ebook sales started coming out of the library monograph budget. Sales patterns were changing.

Ebooks are now part of our daily workflows for our customer base. These days, academic libraries are very experienced with ebooks and ebook selection. They understand digital reference and ebook requirements for their patrons. Some like Charles Sturt University prefer to order “e” over the “dead tree”. Many are talking about simultaneous release and ordering “e” only. YBP Library Services now offers ebooks on their approval plans and believe around 10% of publishers are actively pushing simultaneous release. The delay in providing both formats is being noticed by key libraries and library vendors. Libraries ask us to put pressure on publishers to bring both to market at the same time particularly with overseas based university presses. Once they know about the “p”, students, academics and researchers are searching the library catalogue for the “e”. Their expectation is that it will be available. But publishers delay – and hope to get two bites of the cherry. This is not going to last. The larger libraries will continue moving to “e” in line with demands of their patrons. It’s their level of expectation that is pushing us all forward and publishers will have to address it sooner rather than later.

In addition to reading ebooks via the nominated ebook platform, academic libraries are also looking at the handheld devices. QUT for example is looking at trialling ebook readers this year. The library currently offers 60,000 ebooks across most subject areas. An additional 10,000 titles will be made available to patrons in 2010. While their policy has been formed around ebooks being available on their network they are now looking at the next stage of development and take a leadership position with students and staff.

As the academic library market matures with regard to ebooks, the public libraries start experimenting. In many instances they have been slower to adapt, with the exception of larger libraries – Gold Coast, Brisbane, Yarra Plenty, Sutherland. Those that service a wider demographic and have the book budget available for print, ebook and audio.

As Australian publishers stalled on making ebooks available to libraries, players like OverDrive in the US have done quite the job sewing up the larger library accounts here thank you very much. When we speak to OverDrive’s customers, they advise us the audio downloads are currently the most popular of the products offered. Nevertheless we know OverDrive is now engaging Australian publishers in discussions about content and paying more attention to rights. They got into the market first and like the other ebook vendors have an extensive range to offer their client base. We are seeing the pattern repeated in the public library sphere, albeit some six or seven years later than the academic.

Ebook interest – mainly due to the content that has been available and the slow take-up of e-readers – has been small but that will change as more content is made available and the level of reader interest picks up. And of course the launch of the iPad changes the landscape yet again. At the supply chain meeting at the Frankfurt Book Fair last year one of the most senior representatives said the ebook world will change with the entry of another player and in his words “It will be Apple, it will be cool, and everyone will want one”.

Nevertheless where libraries are concerned, e-reading devices are not essential. For those who don’t know how it works now, a reader taps into the library’s website, searches through the catalogue, selects the relevant title and checks out their ebook. Using the freely available Adobe Digital Editions Reader, the content is downloaded within seconds to the patron’s computer. They can then transfer it to an e-reader, if they have one, or can read on screen. Say the book you wanted to read was The Slap. When the book is downloaded, your computer and your e-reading device clearly shows the time remaining for the loan. At the end of the period, the book expires and is no longer accessible either on the computer or on the device. It’s accessible, convenient, easy, quick and what’s more, to the library patron it’s free. For libraries, it’s already the digital reality.

While the user doesn’t pay, it’s worth mentioning the EBL model (as referenced with this example) is not a free for all. Each copy of a title comes with a restricted number of access days per year. If a title is extremely popular with students, the library’s access runs out and that library needs to purchase an additional copy of the ebook. Translating that same arrangement to the public library market, a large public library such as Yarra Plenty in Melbourne or Sutherland in Sydney would need to purchase multiple copies of an ebook version of a Matthew Riley title, just as those same libraries now purchase multiple copies of print editions.

Access models vary. Some ebook portals don’t let you “borrow” the title if it’s already out i.e. a single user model. Others allow multiple concurrent access depending on loan periods purchased by the library or the original pricing. Some ebook portals allow short-term loans, rentals even. There are many considerations from printing, downloading to computers and devices, the whole DRM spectrum that ebook vendors must take into account based on the publisher’s requirements. One of the popular offerings from EBL is the demand driven model i.e. automatic or mediated purchase based purely on patron demand. We know only too well that what libraries often want and what publishers are prepared to give will naturally vary. But when hasn’t it? There is a lot of work in developing a successful ebook model that pleases all but it can be done.

Another plus for ebooks is that patrons no longer have to wait for the physical book to be returned to the library, no more holds. A popular author can be accessible to readers without these delays. But it’s more than timing, it’s about providing library readers with the content they require. It’s about servicing additional markets. A library in Queensland told me a few months ago they are responsible for some islands off the coast and on one of those islands is a disabled man. He finds it very inconvenient to come ashore as he is in a wheelchair. He has asked the library about ebooks and is currently reading them from a variety of sources. An avid reader and supporter of his library, he wants them to provide him with an ebook service. Some public libraries also mentioned keeping their readers longer. Young adults, particularly females, give up on the library in their teens and don’t come back until they are parents with their own children. Libraries want to keep these people reading and if reading ebooks on computers, hand-held devices, mobiles are the way to do it, then that’s what they want us to consider. Libraries, like their suppliers, are looking at their role in the wider book supply chain and the services they can offer their community.

Ebooks get a lot of column space as we all know. Meetings we have with publishers are totally devoted to ebooks at times. But they are still not mainstream in public libraries. We’ve done a lot of research and we can see why this is. Expectations differ across the board. Some libraries want to engage, others don’t want to consider ebooks, devoted to the printed word as they are. For many there are budget restraints.

With regard to content there is no common ground – well apart from all wanting Twilight! If it wasn’t Stephenie Meyer, it was whatever the book of the moment was. Last year libraries wanted The Slap. A lot is author driven. Tim Winton was a popular request. When you start breaking it down further, there isn’t a lot of common ground. Movie adaptations and classics were popular but libraries were divided when it came to popular science, computing, cooking, foreign language, childrens, reference so on and so forth.

Some public libraries were very uncertain about the role of ebooks, some are preparing for ebooks, some are buying e-readers with little understanding about acquiring content, some don’t want to think about it. And then there are those that do – they want to provide patrons with ebook content and as the leading library supplier in this country, we are who they come to for answers and solutions. Whether it’s “p” or “e”, libraries generally work with only a few chosen vendors. It is the library supplier who must be able to provide the library with what they require for their collection development needs. It’s about consolidation and supply chain efficiencies, regardless of format. We offer them more than supplying a product. We must provide the service, the workflow, the access to content, and competitive and efficient distribution for “p” and “e”. Not every library can afford the outlay for EBL or OverDrive. So library suppliers need to look at how content can be sourced and priced for libraries factoring all of the publishers issues in terms of availability, accessibility, security, and sales models – to name but a few. These are challenging and interesting times for all of us.

Libraries are generally early adopters and we’ve seen this in the academic market. The public market will catch up in the years ahead. Publishers should remember libraries are one of the most important ebook markets at present to consider as part of their ebook strategy. The role of the library supplier or vendor in that market is another piece of the puzzle. Talk to us about libraries – we know our customers, we’re visiting them constantly. And please please please if you haven’t already, get your digital strategies underway. Content is king. It’s what libraries and their readers want. Your competitors will take advantage of the growing ebook market in the trade, direct, and library markets. Are you prepared to be left behind?

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