Original publication: June 2016
Author: Dan MOUNT
Short link to this post: http://bit.ly/2mepRX7
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Background
E-lending: Challenges and Opportunities

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For the majority of human history the products of knowledge, culture and learning were only accessible to a small proportion of society. Indeed, until the arrival of mainstream literacy, fuelled by the expansion of public education programmes in Europe and North America and the industrial revolution, only a small fraction of the population were able to read and write. The developments of the last 200 years simultaneously led to the establishment of the public library as a state-funded institution delivering universal public access to the outputs of human knowledge and culture. In parallel, copyright regimes were created to protect the creative incentives of authors and Public Lending Right systems were established to ensure authors were remunerated by library lending.

 

The arrival of the internet age has unlocked an exciting new chapter in the democratisation of access to information and ideas – whilst  creating new challenges for the relationship between libraries and publishers. Publishers are continuing to evolve their traditional analogue business models while digital communication and distribution networks have reduced the potential barriers to piracy and illegal distribution.

In this new digital world, physical ownership has been largely replaced with licensed access to content. This conflicts with traditional consumer perceptions of ownership, and has erected new obstacles for libraries seeking to purchase and lend e-books whilst fulfilling their mission of supporting public access to balanced composite of digital resources. Key issues include concerns about availability of e-book titles for e-lending, rising complexity and cost, questions around on-going reliability of e-lending services and legal options for digital preservation, alongside a lack of transparency around author remuneration from ebooks. There is also enduring debate and uncertainty as to the legal status of e-lending depending on the interpretation of the 2001 Information Society Directive and the 2006 Rental and Lending Rights Directive (we are currently awaiting a preliminary ruling from the European Court of Justice on this very subject). In addition the European Commission has announced plans to modernise EU copyright rules to address unnecessary fragmentation and frictions and support an effectively functioning Digital Single Market.

Licensing models

In the absence of e-lending being offered a firm legal basis under copyright exceptions and limitations or associated Public Lending Right (PLR) regimes, the resulting jungle of varying licensing terms, conditions, loan durations and pricing has spawned a broad range of different library e-lending models.

  • Single-user licensing models are attractive to many publishers as they allow the elending process to mimic some of the frictions contained in the physical book lending process;
  • Pay-per-loan/simultaneous-use models offer a more attractive experience for library users – but place greater responsibility on libraries for careful budget management and how much to accommodate patron demand for specific titles;
  • Hybrid licensing models offer greater flexibility and choice than a single-user licensing scheme, but can also involve greater complexity and administrative costs;
  • Dual-licensing models allow publishers to digitise their backlist whilst offering libraries discounted licensing terms for e-lending, but are only likely to be attractive in countries with small populations;
  • Library hosted models (when libraries build, own and maintain their own digital hosting and e-lending infrastructure) are most popular in the United States, offer libraries greater degrees of control over content, but tend to secure access to less popular titles whilst requiring substantial levels of upfront investment.
Comparative analysis

Long term trends show that physical book lending is gradually decreasing while e-lending is increasing at a faster rate. However, it is worth remembering that e-lending till remains a small proportion of all book lending through libraries – between 1 and 10%. Based on the comparative data available for the e-lending models reviewed in this report, Germany’s divibib offers the highest average e-book loans per month and one of the largest collections of titles for e-lending.

However, after the German hybrid licensing model (which launched in 2007) the next three e-lending models with the highest average e-book loans per month are all pay-perloan/simultaneous-use models (the Dutch Digital Library established in 2014, eReolen in Denmark created in 2011 and Stockholm Public Library’s Digital Library). In Europe, the Dutch Digital Library (now administered by the National Library of the Netherlands) has the lowest cost per loan and Stockholm Public Library in Sweden has the highest. Of all the European and North American e-lending models reviewed, Quebec’s PRETNUMERIQUE.CA has the lowest average cost per loan.

Key trends and enabling factors

The national policy environment in which individual e-lending models operate has a significant impact on their scope for development and success. Indeed, most of the European e-lending models reviewed in this report benefited from specific policies, strategies and funding to promote e-lending, for example via national e-lending programmes or regional pilot projects. In addition, aggregated budgets for library licensing of digital content, combined with collective negotiations with publishers are more likely to secure favourable and sustainable licensing terms.

E-lending models which have had more time to develop tend to offer larger numbers of ebook titles and demonstrate higher usage figures, but new e-lending models launched in the last few years are also showing the potential for rapid growth. On-going and sustained dialogue and engagement between libraries and publishers, alongside a flexible and explorative mind set, are likely to be key enablers for future e-lending success.

In addition, the collection of accurate data which maps out the economic and behavioural realities of e-lending and e-book buying will become increasingly important in achieving ebook licensing terms which serve the interests of both libraries and publishers. Emerging data shows potential evidence for a potentially positive relationship between e-lending, ebook sales and publishing revenues.  Similarly, for libraries, monitoring usage data and user experience metrics will increasingly enable them to focus scarce resources on achieving the best value for the patrons via targeted investments in content and functionality.

Further conclusions and recommendations

National and regional variances in public funding, government support for e-lending, cultural expectations, market maturity and commercial dynamics mean that each e-lending model operates in a relatively unique environment. Accordingly the wholesale transplantation of particular e-lending models from one country to another, or the systematic roll-out of a specific licensing framework across all EU Member States poses significant challenges. Nevertheless, it is clear from the analysis of the 18 e-lending models reviewed that flexible and iterative approaches which build on sustained dialogue between publishers and libraries are yielding progress. Ultimately the science of “what works now should be embraced above options which are theoretically desirable but practically impossible in the short term. At the same time, libraries should seek to exploit incremental and steady progress to drive continual improvements to the scope and scale of their elending services over the long term.

While steps to resolve the current uncertainty around the legal status of e-lending would be welcome, if publishers continue to identify e-lending as a threat, they will still retain a range of tools which can be used to undermine its viability for libraries. As such, greater EU-level support for comparative and transparent benchmarking of e-lending and e-book purchasing practices across all Member States would be a valuable asset to ensure that future licensing regimes are developed based on behavioural and commercial realities rather than instinctive reservations and fears.

Instead of hard coding mechanisms to create punitive friction in their pricing and licensing models, publishers should work collaboratively with libraries to flexibly co-design how friction can be introduced into e-lending systems to maximise the benefits to patrons from limited collection budgets. Providing libraries and publishers can continue to build and develop evolving agreements based on mutual trust and shared evidence, there are ample opportunities to be seized on both sides of the e-lending equation.

Link to the full study: http://bit.ly/573-453

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Further reading:

The New Role of Public Libraries in Local Communities

Promoting Media and Information Literacy in Libraries


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