Booksmash's Lust-O-Meter Shows How Innovation Happens

When HarperCollins decided to sponsor a hacking competition called BookSmash, they probably expected the participants to be a rag-tag collection of smart students, hungry young startups, and underemployed misfit coders. It's very unlikely that they expected Nobel Prize winners or seasoned tech entrepreneurs to show up. But, as I pointed out in June, they had made some interesting and fun resources available as part of the competition: 196 full-text books from some popular authors. I'll let you in on a secret: despite what you may hear elsewhere, it's fun, more than anything else, that drives innovation.

The results of the competition were unveiled yesterday. Some of the teams I was already familiar with: I met the BookCities, Coverlist and LibraryAtlas teams at Publishing Hackathon. ReadUp, from the the great folks at ReadSocial, is a neat idea definitely worth checking out. But Text Textures was the submission that popped out at me. The Text Textures team is Mira and Frank Wilczek, a father-daughter team. Frank is a Nobel Prize winning physicist, Mira is a ethical-coding serial tech entrepreneur. (Lyric Semiconductor and Red Panda Security. A new project is BookGobble.)

Text Textures starts out by imagining how fun it would be if you could just skip to the "juicy parts" of a book. It turns out that with access to the full text of a book, a pretty simple combination of weighted word counts supplemented with pacing heuristics allows a text analysis engine to measure things like lustiness (hence the "Lust-O-Meter"), affection, violence and occult themes. By graphing each of these attributes versus page number, it's easy to see where the "juicy bits" of a book are. But that's not where the fun ends. You can density-plot one attribute versus another. And so we find out that "the lustiest scenes in For A Few Demons More appear to have almost no affection". You can plot compare multiple books, and use the measures to decide what sort of book to read next.

I asked Mira about the genesis of Text Textures. She responded:

I've always been neural-net-curious. So when I found myself with a nice nest egg and some free time, I took the opportunity to round out my education. My dad (Frank) has conveniently also been curious about neural nets -- although he was more intrigued by the analogy to human cognition -- so we decided to work through Hinton's Machine Learning lectures on Coursera together. We've been doing fun technical projects together for as long as I can remember. When I was seven, we built a foot-stomping robot using Lego MindStorms. When I was sixteen, we used genetic algorithms to solve N queens.

As we went through the Hinton course, we started to think about real-world problems it might be interesting to tackle using some of those mathematical tools. Eventually we started playing with tracking characters through Sherlock Holmes .... then finding the action scenes where those characters appear ... then looking at other ways to classify scenes ... and thus the underlying idea of Text Textures was born.

The Lust-O-Meter in Text Textures is a fun toy. Which is to say that I would like to be able to play with it myself. I would build a snark-o-meter.  I'm not sure if a "Skip to Good Bits" button is something people want in the reader applications, and even if they wanted it they might not admit it. But eBooks don't have inherent page numbers, so new ways to navigate ebooks would be really useful. It's rather a shame that today's prevailing ebook environment of walled-garden DRM-encumbered marketplaces is hostile to innovations such as Text Textures. Even libraries are prohibited from doing textual analysis of most of the ebooks they buy. And because lustiness data, for example, is not protectable by copyright, rightsholders such as HarperCollins typically deploy restrictive terms of use on anyone they allow to access the full text of their works. It's not enough to open up just a crack for a hacking competition.

Everyone should be able to have fun with their books.

Note: you can vote for Text Textures or any of the other BookSmash submissions until September 27 at 5:00pm EDT by going here.
Update: @skyberrys notes that the Illuminate entry also has roots in #pubhack. I note that it's yet another contribution to the book world by a physicist!

The Inaugural LibraryReads List, With e-Lending Annotations

This morning the inaugural LibraryReads list was announced. However,  a number of the selected books may not be available in digital form in your library.

Fangirl
by Rainbow Rowell
Published: 9/10/2013
by St. Martin’s Griffin
ISBN: 9781250030955
X Macmillan does not do e-lending of the St. Martin's Griffin imprint. However, the Director of Library Marketing at Macmillan says "stay tuned as we continue to roll out new titles for e-lending."

How the Light Gets In: A Chief Inspector Gamache Novel
by Louise Penny
Published: 8/27/2013 by Minotaur Books
ISBN: 9780312655471
X Macmillan has some of the books from its Minotaur imprint in its e-lending pilot. But not this one. Again, "stay tuned". Apparently the audiobook is available for pre-order on Overdrive.



Night Film: A Novel
by Marisha Pessl
Published: 8/20/2013 by Random House
ISBN: 9781400067886
✓ Random House has a strong e-lending program, but the books are expensive! The ebook pre-order is currently available on Overdrive for $84; it's $12.99 on Kindle Store.


Help for the Haunted: A Novel
by John Searles
Published: 9/17/2013 by William Morrow
ISBN: 9780060779634
✓ HarperCollins allows e-lending. The ebooks expire after the 26th lend, but they're priced at a discount from retail print.


The Returned
by Jason Mott
Published: 8/27/2013 by Harlequin MIRA
ISBN: 9780778315339
✓ Harlequin has a good library e-lending presence. The library ebook is available for $21 on Overdrive. It's $9.46 on the Kindle Store.


Burial Rites: A Novel
by Hannah Kent
Published: 9/10/2013 by Little, Brown
ISBN: 9780316243919
✓ Little, Brown is part of Hachette Book Group. Hachette recently announced that its full list would be available for library e-lending. The program is comparable to Random House's.


Margot: A Novel
by Jillian Cantor
Published: 9/3/2013 by Riverhead
ISBN: 9781594486432
? Riverhead is part of Penguin, (now part of Random Penguin House). I'm not sure what the e-lending status of this will be.


Songs of Willow Frost: A Novel
by Jamie Ford
Published: 9/10/2013 by Ballantine Books
ISBN: 9780345522023
✓ Another Random House title, should be available for e-lending.


Five Days at Memorial: Life and Death in a Storm-Ravaged Hospital
by Sheri Fink
Published: 9/10/2013 by Crown
ISBN: 9780307718969
✓ Yet another Random House title, should be available for e-lending.

A House in the Sky: A Memoir
by Amanda Lindhout & Sara Corbett
Published: 9/10/2013 by Scribner
ISBN: 9781451645606
X Simon and Schuster is at this point in time the least e-friendly to libraries of the big 6 publishers. This title should be available as part of a pilot with New York City public libraries, but if you live anywhere else you are screwed.

It seems to me that if the librarians participating in LibraryReads really want to promote reading in libraries, then they should push to have any selected books available for e-lending, and not just in New York City. Just three years ago, fully half this list would have been digitally forbidden to libraries; just because some advances have been made doesn't mean the struggle for library survival is over. Not even close.

The covers are linked to Amazon. So there! Updated with some real pricing/availability info.

A Rational Framework for Library eBook Licensing

Since the Redigi decision made it clear that there is no right of first sale for digital content in the US, it's been much easier to think up realistic doomsday scenarios for public libraries in the US. Why should a publisher let a public library lend an ebook if Amazon or some other competitor were to offer much better terms? How would our public library system, saddled with difficult-to-use systems and unfavorable contracts, ever hope to compete?

Back when HarperCollins first announced that it would only let libraries lend their ebooks 26 times before they would expire, there was widespread outrage from the library community. Looking back on that, it seems pretty clear that a lack of consultation and poor customer communication fueled the furor. By itself, the lending limit could have terrible long-term consequences for libraries, but as part of a wider, well-thought out framework, it could be useful component.

I've been doing a lot of thinking about this over the last 3 years, and I've decided it's time to float a comprehensive proposal for how libraries and publishers might work together on ebook distribution to benefit the entire reading ecosystem. eBook lending as implemented to date has been founded on a combination of irrational fears and outmoded processes. We deserve better.

Behind this framework is a set of assumptions.

1. Library ebook distribution must sustain and increase the total population of readers; this is a prerequisite for a healthy book publishing industry.
2. Patron discovery of ebooks in libraries must connect effectively to ebook sales.
3. Library distribution must become much more efficient, and overhead must become much smaller for ebooks than it is today for print books and ebooks.
4. Long term preservation of ebook availability must be a joint undertaking of libraries and publishers.
5. The economic models used for library ebook distribution must provide incentives for libraries and publishers to promote points 1-4.

I don't pretend that people won't disagree with some or all of these 5 assumptions, but if any of them are false, then, I think there will be NO distribution of ebooks through libraries. I also recognize that not all books are alike; even if library distribution works for some ebooks, it's unlikely that it will work for every ebook.

So the fifth assumption is what this post is really about. Given 1-4, what should an economic framework look like? Here are the features of a model that makes sense to me:

1. Decoupled pricing. An ebook license that allows for lending makes the ebook more valuable, so why shouldn't it cost more than an individual, non-transferable license? I can't say whether Random House's 300% markup for libraries is excessive, but why not let the marketplace decide? For new, super-popular ebooks, maybe 500% markup makes sense. On the other hand, maybe ebooks that need exposure should have an 80% markdown because libraries might turn them into bestsellers.
2. Rate limits instead of DRM. Patron license embedding.  I've written about this before. This may take the most convincing, but in thinking about the imperatives of effective discovery, low distribution overhead, and long-term preservation, I've concluded that there are no alternatives to major change in library distribution technology.
3. Circulation charges after an initial period. Most books are bought in the first year of publication. Today, libraries "deaccession" books to match their declining demand. But there's no reason for a library to deaccession an ebook, so for most books the global supply for any given ebook will eventually exceed global demand. If the library can cut its transaction cost from ~$2 per circulation to $0.20 per circulation it seems fair to reward the publisher with part of the difference for developing books with long term value. 
4. License transferability/InterLibrary Loan. Libraries rely on interlibrary loan to expand the scope of their collections and meet special needs. But ebook loans can be instantaneous, so digital ILL can compete directly with backlist sales. If the transaction costs (currently ~$10) for ILL can be squeezed down to $1 or so, there's plenty of margin to provide a transaction payment to the rights holder for the privilege of doing so. 
5. Patron-funded purchases. Libraries are tight on funding even as they need to completely transform what they do. Their biggest asset is a huge reservoir of public goodwill. At this pivotal juncture, their ebook offerings are characterized by long hold queues. Why can't a library patron buy an extra copy for the library and jump to the front of the queue? Why don't publishers offer "Buy for your Library" buttons on their catalog pages? The reasons are complex, but it's mostly a case of "we haven't done that before". But if it doesn't happen I just can't fathom how library discovery can effectively plug into publisher commerce.
6. License durability. If libraries are expected to "buy" ebooks, it should be pretty much for keeps. If the publisher for some reason has to revoke a license without cause, the library should get a refund of the license price.
7. Archival copies. Libraries need to do a lot of things with books other than lending. Indexing and archiving are good examples. The saddest thing about the most successful library ebook distributors today is that libraries don't get access to unencrypted ebook files. If libraries are to offer effective discovery and archiving of ebooks, they need access to the files. Seems a no-brainer to me.

There are a bunch of parameters to plug into this framework; here's my guess as to what they should be:

• Rate limits: One authenticated user per two weeks.
• Circulation fee: $0 for the first year, after the first year, 2% of purchase price or $1 whichever is greater. 
• ILL fee (publisher share): 5% of purchase price or $2, whichever is greater. 

A rational ebook lending framework would mean big changes for both the book publishing industry and the library industry. Even if a HarperCollins decided today that this was an attractive way forward, it would be hard-pressed to find a way to implement it, because libraries just don't work that way. So it seems a bit far-fetched at this point. Based on the iBookstore fiasco, it appears to be illegal for big publishers to even talk to each other, let alone drive business model changes. It's good that a library group is still trying to figure it out.

Maybe some small startup company could try some sort of pilot program.

Book Metadata Under a Bushel

Full story at the Verge

They don't allow witnesses, spectators or journalists to carry cell phones or kindles or iPads into the Federal Courthouse in New York. But books are OK. So every publishing executive at the iBookStore antitrust trial carries a book with them instead. For example, The Verge spotted Penguin's David Shanks sporting Robert B. Parker's Wonderland . The press takes a picture, and the next day the book, which just so happens to be an exciting new release, gets its cover onto the front page of the business section, not to mention Go To Hellman.

This opportunistic book publicity reminded me of the biblical parable:

No man, when he hath lighted a candle, putteth it in a secret place, neither under a bushel, but on a candlestick, that they which come in may see the light. Nor doth a scroll seller speak its name so no man canst hear. Nay, he shouteth from high mountain tops the holy numbers of the scroll.

- Luke 11:33 (more or less).

So you would think that book publishers would also be spreading metadata for their books far and wide, and would make it as easy as possible for developers to propagate the word. But the tyranny of "the way we've always done things" still holds sway in that world. And so, the HarperCollins OpenBook API and the BookSmash developer competition, which I ranted about in my last post, need to be understood as the positive steps they are. They are opportunities for publishers and developers to engage in ways that aren't chiseled in stone.

For my part, I've been engaging with some very helpful people at HarperCollins. Together, we found some documentation issues that had me unsure about the resources being offered to challenge participants.

First of all, the entire text of the 196 books listed in the resources spreadsheet are being made available. This is very cool. Also, 20% samples of all EPUB books in the HarperCollins catalog are available through the standard API.

Hints:

• If you're participating in the challenge, you need to use a different endpoint than the one offered by the API demo tool to get un-truncated text. Yes, you copy the url it gives you (host name "diner") and replace the endpoint url with one reported in the text on the demo tool (host name "api").
• If you want to use the catalog API to get ISBNs to use in the content API, note that only books/ISBNs with Sub_Format='EPUB' have preview content associated with them.
• The API does request throttling in a funny way. If you make too many requests in a short period of time, the API tells you "Developer Inactive". That result seems to get stuck in a server-side cache.
• The HC people seem eager to improve the API, so don't hesitate to report issues in their forums. If you've ever developed an API, you know that you have to whack at it a bit to get things right.

If you play with this API a bit, it'll be pretty obvious to you that "building an API" is not the way things have always been done in the book industry. Here's how things are done: Publishers cause ONIX XML files that describe their books to come into existence. These files are shipped to "trading partners". The reason, more or less, that the publishers do this is because way back when, Amazon forced them to do it that way instead of the horrible old ways they used to do things.

So the reason that the HarperCollins API, and others like it, are significant, is not because they'll be useful in their current form. It's because big publishers have realized that getting bossed around by Amazon might not be a smartest thing to do, and maybe having more direct relationships with developers would be a good idea.

Publishing Hackathon a BookSmashing Success

Thursday, HarperCollins announced its BookSmash Programming Challenge. The book industry is nothing if not trend-driven, and after the success of the Publishing Hackathon, the BookSmash announcement qualifies "hacking" as a book industry trend.

The Hackathon turned out to be more significant than I expected. We should never underestimate the power of juxtaposing people with non-overlapping ignorance. I had the chance to talk to some of the other hacking teams last week, and they feel they learned a whole lot about the publishing industry. I also talked with Rick Joyce, one of the drivers of the event and Chief Marketing Officer at Perseus Books Group. He wrote me that his two revelations were "1) the importance of putting 'shareable data' (i.e. metadata) into a form developers want to work with (i.e. API's) vs. the feeds [publishers] traditionally supply to [their] trading partners. The world of developers are not going to incorporate you into their brilliant new lego creations if you don't give them lego-bricks to build with. And 2) this whole Open Innovation model is pretty mind expanding."

The organizers of the Publishing Hackathon got a lot of things right. The space was wonderful, the food was publisher-quality, and the publicity was excellent. (I admit that even the hype-laden website blurb that I criticized did its job well.) The variety of sponsors lent an open and collaborative atmosphere to the event. Even libraries were represented. It was a good decision to set a theme of "book discovery" for the event; this helped focus the participants and created a set of discussions that are likely to continue. Having the final presentations on the floor at BEA was brilliant. The party afterwards was fantastic.

The projects that were created at the hackathon won't solve the book discovery problem. The winning project, Evoke, won because it's both plausible and totally out of left field. But it's likely the knowledge gained by hackers and publishers during the process will advance the state of the art.

As with anything new, there are a number of things that could be improved on in future hackathons. Here's my list:

1. Everyone is a VIP. During the presentations, three rows of chairs in the front were set aside for "VIPs". No one sat in them. Next time, make the hackers the VIPs.
2. More prizes, more fun prizes. The gift economy of hacking and the cash economy of startups both need nurturing and cross-pollinating. Having one cash prize of $10,000 is less motivating than 5 $1000 prizes, and how do you split it if you have a big team? A prize consisting of dinner at a nice restaurant or some theater tickets might be a stronger motivation for participation.
3. Hacker Judges. None of the 10 judges for the 2013 Publishing Hackathon actually do any hacking. Only 3 of the 10 qualify as technologists. None of them are designers. (As far as I know.) If you want to send a message that design, technology, and code are important to publishing, then build that dialogue into the judging process as well.

Now about BookSmash.

At first, I was seriously underwhelmed by the BookSmash challenge. It seemed to be a way for HarperCollins to prop up the sad, desolate ghost towns that are the OpenBook API and the OpenBook Content API. (The OpenBook API was launched in April of 2012 with the support of Mashery; the forums had attracted exactly one developer in the last year.)

But perhaps I judged prematurely. The competition website claims that a number of authors, including Peter Drucker, Eloisa James and C. S. Lewis, will be "making their full works available via the BookSmash Challenge version of the OpenBook API." This could be really exciting, but as far as I can tell, it seems to be a bit of an exaggeration. I checked James' Desperate Duchesses; the content API returns the first 20% of the work. I tried Prince Caspian and got this result:

epubFetch unable to display this book

Sorry, we have not loaded this book into the system as yet.
We are loading books on a regular schedule, so please check back.

 Still, I can imagine some interesting things that might be done with this data.

Update June 18: Have been working with the friendly people at HarperCollins to iron out documentation issues that had been blocking my access. I'll put some hints in a new post.

/START RANT/ In 2013, Metadata APIs like Harper's are NOT enough. The metadata is not very good, and there's not enough of it. Why would a sane developer go to HarperCollins for product metadata when she could go to Amazon or Google Books and not have it limited to HarperCollins products, not have it limited by HarperCollins Terms and Conditions (which forbid any commercial use), AND have the selling price included, too??? Also Prince Caspian Movie Tie-in Edition (digest) is NOT the title of a book! If you want interesting things to happen with your metadata, let developers download THE WHOLE DATASET! That's how you get the data to Amazon and BN, and that's how you should get it to developers! /END RANT/

It's like Rick Joyce said. If you want people to build cool things, you have to give them lots of cool bricks.

Random House's eBook Price Hikes are GOOD for Libraries. IF...

Random House, the last of the Big 6 Publishers to allow libraries to purchase and lend ebooks on a 1-copy-1-patron (pretend-its-print) basis, said last month that it was going to raise its pricing for libraries. The new pricing isn't set in stone, but Library Journal has reported that libraries are being asked to pay as much as three times the price of a print copy for a lendable ebook from Random House.

The general reaction from the library world was nicely summed up by ALA President Molly Raphael in an official press release: "In a time of extreme financial constraint, a major price increase effectively curtails access for many libraries, and especially our communities that are hardest hit economically."

Well, yes. But 5 years from now, libraries may well look back on Random's move and recognize it as the beginning of a new, healthier relationship between public libraries and trade publishers, one that recognizes libraries as an important player in the "reading ecology". Here are the reasons why I think it might happen:

• eBooks aren't books! So why should the price of a library-lendable eBook be locked to the price of a print book? Once the prices of lendable ebooks are allowed to float, market forces will move them up and down. For some books, high profile best sellers for example, the market price for a lendable ebook might be 5 or 10 times the print price. A year later, that same book would have to be steeply discounted to be sellable in the library market. Books without a buzz, or by a new author might be offered to libraries well below the print price, in an attempt to prime the market and spread the word.
• High prices for library-market books are nothing new! In academic markets where libraries make up a significant fraction of the buyers, prices are already over $100 per copy. That's because the  sales impact of inter-library loan and other forms of library sales-substitution is built-in to the price.
• Higher prices give libraries more leverage. This is the most important benefit of higher prices for  lendable ebooks. Libraries aren't being forced to buy the 3x ebooks- they will consider prices and their limited budgets before investing in them. They'll need to demand digital product features tailored to libraries to make them worth premium prices. 

This last point is the big IF. With its move, Random House has made clear what it wants out of a new relationship with libraries- more cash per copy. In return, libraries need to demonstrate what they expect for their money. What should libraries require from their premium ebooks in exchange for premium prices? Here's my list:

1. Portability - the ebooks shouldn't be locked to the distribution platform of a particular vendor; most libraries have existed longer than Overdrive, Adobe, Apple and Amazon combined and libraries would like to continue existing after those companies have been long forgotten. Their ebooks should persist as well.
2. Transferability -  libraries can make their ebook assets go a lot farther if they can be traded to other libraries or library consortia.
3. Privacy - libraries should never be forced to expose their users to the prying eyes of anybody!
4. Accessibility -  libraries will increasingly be relied on to provide text-to-speech and other accessibility technologies to users who need them.
5. Integrability - libraries don't want to be sources of friction, they want to provide integrated information environments. Library systems will increasingly provide capability such as annotation, discussion, advanced discovery tools and social interaction; they won't be able to do that if their ebooks are walled off behind third party DRM.

But, back in the real world,  most public libraries that offer ebooks are having difficulty keeping their digital shelves stocked due to overwhelming user demand for ebooks. If ebooks cost 3 times what they did last year, the availability will be 3 times worse. How can this situation get back into balance? I have three suggestions. First, if ebooks don't expire, as in the Harper-Collins scheme, the supply of ebooks will grow over time so that even if long wait times for hot titles are the norm, plenty of 5-year-old ebooks will be there to read for library users. Second, libraries can steer users to ebooks that don't have pretend-it's-print lending limits: those in the Public Domain or in the Creative Commons.

Here's an idea for a way that a smart publisher could help a library convert its print collection- offer a 1 for 3 (or 1 for 2) p for e  trade-in. The publisher's sales of new books would improve by suppressing competition from used books, and the library would gain inventory of older books to slake reader book-thirst.

Both libraries and publishers need to move on from backward-looking economic models. The time to start doing so is now. We can make it happen.

2011: The Year the eBook Wars Broke Out

Open war is upon us, whether we would have it or not. These incidents in 2011  seemed like twitter-inflamed kerfuffles as we lived through them, but with the perspective of time, we can see they were preludes to a fight to the death.

1. Harper-Collins and Overdrive Stop Pretending

In a year or two, libraries may consider the Harper Collins limit of 26 circulations of a list price ebook through Overdrive to be a relative bargain, as all of the other large publishers will withdraw from "pretend-its-print" ebook licensing.

2. Amazon occupies Overdrive

Libraries mostly welcomed the possibility to lend their Overdrive ebooks to patrons with Kindles. Libraries are fundamentally service-oriented institutions and ebooks on Kindle is what the users wanted. But at what cost? Do the traditional library values of privacy go right out the door? Do libraries realize that patrons gone to Amazon might not come back?

3. The Penguin Strikes Back

The big publishers have watched Amazon's market power grow and see a future of slavery to an internet commerce master. Only Penguin allowed hostilities to break out, however, as the Amazon occupation of Overdrive broke the penguin's back. The target of opportunity was library lending. Evidently Penguin decided that a frontal assault on Amazon would be suicidal.

4. Prime Pretends to be a Library

Amazon added ebook borrowing features to their Amazon Prime service, revealing it as Amazon's answer to Netflix, and without even thinking about it, as a service that could eventually compete directly with public libraries. Now we see why Amazon wanted to get in on that library thing.

5. Publishers Decide Google is a Lesser Evil

Publishers looked back on the halcyon days when Google Books seemed poised to establish a new world order for ebooks with nostalgia. A separate, anticlimactic settlement between Google and the Association of American Publishers appears to be in the offing. It's Amazon that they're afraid of now.

6. Authors Lob Legal Grenades at Hathitrust

Spurned by the publishers in their joint crusade against the Google heathens, the Authors Guild decided that Hathitrust might be a less formidable opponent. And indeed it was, the lawsuit exposed a number of copyright blunders by the library cooperative. But the Guild's suit seemed hasty and ill-contrived. This sort of thing happens in wartime.

7. Amazon Obliterates Borders.

Although Borders was tactically weak in many ways, it was Amazon and the rise of ebooks that killed it strategically. Barnes and Noble, if it survives, won't look anything like the book marketing machine that it is today.

8. Libraries Muster the Resistance

The emergence of the Digital Public Library of America (DPLA) as a rallying point for libraries' continuing presence in the cultural life of America was a surprise, as it went against the prevailing tea-party currents for smaller government and increased reliance on the private sector. It's not clear how the symbolic presence of a library in Zuccotti Park could point the way to a digital future, but many things that have not yet come to pass are shrouded in darkness.

9. Anti-Piracy Hysteria Threatens Freedom Loving Citizens

The powerful publishing and media industries, in a paroxysm of inept do-something-ism, seem to have convinced Congress that it would be a good thing if the intenet could be censored for copyright infringement. Sadly, the solution they've fixed on, SOPA, will be ineffective against unlicensed content and will put the Justice Department smack in the middle of our nation's information infrastructure. Carpet bombing never ends well.

There's hope.

I have learned that whenever it seems that you're falling into the abyss, you must reach for a rope. There is always a rope.

A Corollary to Raganathan's Third Law

What do you see when you walk through a deserted library crammed with books? Do you see a vast store of knowledge, just waiting to be tapped, or do you see a horribly inefficient use of resources? Do you think of what could be, or do you see what isn't? If you're a librarian with a limited budget, you might think of all the money that went into those books, and you'd be thinking about how to get people to use those books. That's how interlibrary loan came into being.

Now imagine if the books were digital. Interlibrary loan is problematic for ebooks, but librarians are anything if not pragmatic. Some books, though valuable, are unlikely to be circulated a lot. So instead of purchasing those books for the library, the library contributes to a consortium that buys ebooks for the use of all its members. This benefits library patrons, because they gain access to a large number of books they'd otherwise not have access to, and it benefits publishers, because they are able to sell a broader range of books, at higher prices, than they'd sell if the consortium didn't exist.

I haven't yet commented on the consortial aspects of the recent HarperCollins kerfuffle. Here's what Overdrive told its partner libraries:

Another area of publisher concern that OverDrive is responding to is the size and makeup of large consortia and shared collections. Publishers seek to ensure that sufficient copies of their content are being licensed to service demand of the library’s service area, while at the same time balance the interests of publisher’s retail partners who are focused on unit sales.    Publishers are reviewing benchmarks figures from library sales of print books and CDs for audiobooks and do not want these unit sales and revenue to be dramatically reduced by the license of digital books to libraries.

Let me translate this into English.

Publishers are aware that many of the books they sell to libraries are seldom used. (See my posts on Book Use for some quantitative information) They worry that they'll no longer be able to sell 10 copies of a seldom-used book to 10 libraries, because 1 electronic copy will meet the demand from 10 libraries in a consortium. They feel that they deserve the benefit of inefficient library purchasing decisions.

This sort of thinking is myopic. Libraries have responded to budget pressures by making their purchasing  more efficient and relying more on inter-library loan (ILL), a process which is invisible to publishers. Because inter-library loan is relatively expensive, publishers gain when ILL is replaced by consortial ebook lending because the money saved can be redirected to ebook acquisitions.

An efficient library channel will compete, to some extent, with ebook direct-sales channels. The optimum strategy for publishers, however, is not to force inefficiency in the library channel, but rather to optimize pricing to monetize increased efficiency.

The efficiency of library acquisitions can be increased by introducing more consortia. A library needing a collection specializing in medicine, for example, should bolster its collection by participating in a consortium with the corresponding specialization. In principle, there could be a consortium specialized for every book that gets published. Such a consortium could manage the number of copies it purchases to closely manage global demand. If the economics worked out it could even strike a deal for unlimited use of the book by consortium members.

The single-book consortium could even allow individuals participate. It could negotiate with rightsholders for global access.

So here's a corollary to Raganathan's Third Law of Library Science:

Every Book its Consortium

Mmmmm. That sounds like my business idea for Gluejar, un-gluing ebooks.

Simon and Schuster is Looking at Limited Lending Library eBook Models

Michael Healy and Carolyn Reidy

Today's installment of the Publishing Point series of CEO interviews featured Simon and Schuster CEO Carolyn Reidy. Reidy was appointed to her current position at the very bottom of the economic cycle; she has had a lot on her plate to say the least. Although she knew when she took the job that she'd need to steer the company through a transition to a purely digital product, she had no idea it would happen as quickly as we're seeing.

Michael Healy, who didn't appear to be unemployed yet, again played the role of master interlocutor. He started out by asking the obligatory question about S&S's reaction to yesterday's decision on the Google Books Settlement.

We of course are disappointed that the judge didn't approve it, although I would also say that it wasn't so surprising that he didn't just approve it in total. Along with the other publishers who were party to the suit, we do hope that it's just another way-station on what will be a final settlement. I think he did give some indication in his ruling on ways that we can get to a final settlement and I think that all parties involved have a hope that we'll get there and there will be further conversations about it; it'll just take us longer to get there.

Healy, the Executive Director Designate of the Book Rights Registry that would be created by the settlement, joked that "this particular party certainly hopes that we get there!" Reidy continued:

I'm sure you do. And we all do, because there are real principles involved in the whole thing that we'd like to see preserved and definitely settled for the good of all of us.

Healy then asked if Reidy shared the optimism about growth in the book industry recently expressed by Len Riggio, Chairman of Barnes&Noble. Reidy does:

I share the optimism because I think that even though  there are negative fallouts occurring, as you see with bookstores closing and things like that, the ease by which consumers can acquire books, the ease by which people can publish books, also of selling and being able to put books in front of consumers the variety of ways you can market, all of these things are just exploding. and we don't yet have the same grasp of them that we did of the old system but there are so many opportunities facing us that I'm I definitely share the optimism about it, there's no doubt about it. The biggest question is whether or not you're going to take the old market and transform it into a new way of consuming or whether it'll get bigger; of course we all hope its going to get bigger. That's the biggest question in front of us: can we in fact enlarge the market for reading by using all the new tools and opportunities in front of us.

Reidy discussed at length the many challenges facing a publishing CEO in times of technological change. 20 years ago, even 10 years ago, a publishing CEO would be wrestling with questions of production systems and bandwidth pipes and why a best-selling crossword puzzle iPad App couldn't just be moved to the iBookstore. She believes that the biggest problem facing publishers is maintaining their ability to create value compared to the many entities ready and willing to disintermediate them.

Healy's last question concerned Harper-Collins and the "eye of the hurricane" that they've found themselves in regarding their change in ebook lending policies. Reidy's answer was succinct:

Simon and Schuster does not yet sell ebooks to libraries. We have not yet found a business model that makes us happy. That's why we're not in it

Later, in the Q&A period, I pressed Ready about finding a business model for providing ebooks to libraries: "libraries are worried about whether they'll survive the transition to digital books and funding difficulties at the same time. Are you at all worried about the survival of libraries across the transition to ebooks?" I asked.

There's a part of me that worries about it, but I'm first worried about my company... and my authors, and their survival. So we have met with several people who are trying to come up with a solution to sell into libraries and there are people who are working on various and sundry different models that are not just sell one ebook and let it be loaned forever, and in fact we met with one last week. So we've actually been meeting with people and think there will come a solution that we can live with. We just haven't seen one yet.

I hope that Reidy also finds a model that will allow libraries to thrive in time to help Simon and Schuster grow the market for reading.

Related articles

• Publishing Point interview with Carolyn Reidy, President and CEO, Simon & Schuster (teleread.com)

The Pareto Principle and the True Cunning of HarperCollins

I take it back. I see now that HarperCollin's new strategy for ebooks in libraries is not nearly as senseless as it first seemed to me. In fact, it's a cunning plan worthy of Blackadder. In case you're new to this library and publishing controversy, HarperCollins, one of the "Big 6" US publishers, has decided to require the expiration of the ebooks it offers to libraries after 26 checkouts. A library would have to relicense the ebook after the 26 checkouts if it want to keep the ebook in its circulating collection. Needless to say, librarians and many others were not happy about this.

HarperCollins' strategy puzzled me, because I couldn't figure out how it would make any money for them. I thought any extra sales caused by ebook expirations would likely be offset by poor sales of the limited-durability ebooks.

Libraries struggled to figure out how the new policy would affect them, and started looking at their circulation statistics. For example, Laura Crossett reported that at her library, 23,083 out of the 88,680 circulating books in her library's collection had been checked out more than 26 times over the course of 15 years. 220 books had been checked out more than 100 times. Matt Hamilton reported his numbers: 7566 books from a collection of 288,793 had circulated more than 26 times; 942 items had circulated more than 52 times. Most of the materials in his library are 3-4 years old. On Twitter, West Chester Public Library reported over 10,000 books from its collection of 58,000 had been borrowed more than 26 times over 17 years. Jason Griffey reported stats from his (academic) library: in 10 years, only 126 items from a collection of 409,213 had circulated more than 26 times.

These numbers are a bit all over the map, and I wanted to make some sense of them. According to IMLS data for 2007, US public libraries had collections totaling a bit more than 812 million print volumes. They circulated these items 2.17 billion times in 2007. That works out to an average of 2.6 circs/volume. Of course circulations will be unevenly distributed, but if HarperCollins terms were applied to print, the "average" volume would be expected to last 10 years.

A true understanding of these numbers would come from a better characterization of how circulation is distributed over the collection of a real library. You've probably heard of the "80/20 Rule" which in this case would say that 80% of the borrowing is concentrated on 20% of the collection. This is also known as the "Pareto Principle" which is a consequence of power-law distributions. I wondered if this was a good description of book circulation in libraries. I wanted to see some data.

OCLC's Lorcan Dempsey pointed me to the motherlode. The University of Huddersfield, in England, has released a huge file containing circulation and recommendation data extracted from almost 3 million transactions spanning over 13 years. I set to work analyzing the data.

The result is quite remarkable. The data shows a distribution of circulation frequency following a power law over 3 orders of magnitude, with a R² of 0.9969! (update: see note 10 below.) Here's the plot of the number of books that have been circulated N times at Huddersfield:

The equation for the circulation is pretty simple:

Here, N(f) is the number of books that have been checked out f times. N₀ and A are fitting parameters; I used A=9 in my plot of the Huddersfield data. If I use the total number of circulations and the total size of the collection to fix these two parameters, I get a zero-parameter fit of the data that's still amazingly good, R² of 0.9760

Using this equation, I can calculate what a limited check-out ebook "should" be worth, but I'll leave that to another post, seeing as even one equation may be too much for this blog post.

What I'll focus on here is the what's been referred to in the library literature as the "vital few" principal that results from this distribution. A large majority of the circulations are taken up by a relatively small fraction of the collection. In the Huddersfield data, roughly 20% of the collection is in fact responsible for roughly 80% of the circulation.

If we think about this in the context of ebook lending models, we see that HarperCollins has played a neat trick. By focusing our attention on the books that are lent many times, supposedly shortchanging the publisher and the author, HarperCollins has gotten us to overlook the 80% of books that don't circulate much at all. Libraries pay full price for those, too, and it's pretty clear that publishers make infinitely more money on books that don't circulate in libraries than on books that don't sell in bookstores!

On balance, the economic effect of libraries, in addition to those I've discussed before, is to shift money from very popular books to those that are less popular. It can be argued that libraries support a breadth of culture that would go away without their support. Guess who publishes those very popular books? The Big 6 publishers, of course. They pay the big advances to authors, the big coop advertising fees to bookstores, they get their authors on talk shows and their books reviewed in the Times. That takes a lot of money, but the expenditure is richly rewarded by a "vital few" or "smash hit" economy.

So here's the cunning. By focusing on popularity-driven revenue mechanisms, HarperCollins is pushing money towards the smash hits and away from the long tail. Libraries may be adversely affected, but they're collateral damage. It's the long tail publishers that HarperCollins is trying to destroy.

All of HarperCollins' strategy is directed  at making hits bigger. The loss of big-box bookstores like Borders has disproportionately hurt  smash-hit publishing houses. They're poorly positioned to take advantage of the internet-induced fattening of the long tail that has been documented by Brynjolfsson, Hu and Smith in their paper on Amazon sales rankings. Rather, Big 6 profitability is improved by selling more copies of fewer books.

I didn't think so, but the HarperCollins strategy really does make sense. It's part of the big push.

Notes:

1. For a review of what people have written about HarperCollins, Librarian by Day is all over it.
2. Thanks to Dave Pattern at Huddersfield and the JISC TILE Project for making the release of the circulation data possible.
3. The Huddersfield data starts at books with 5 circulations. For counts greater than 100, I binned the data in groups of 10 to reduce noise. The data falls off the power law at over 400 circulations/book. This must be close to limit of always being in circulation.
4. Yes, all you need is the total circulation and the collection size to predict the distribution of the circulation. If you want to model your own circ stats, the formulae for A and N₀ are as follows:
   • A = C/2N where C is the total circ and N is the number of items in the collection.
   • N₀ = (3/4) (C³/2N)^1/2
   Amazing, isn't it? Remember this is an idealized system, so your mileage may vary. Weeding will pull down the small N part of the curve; availability limits will truncate the large N part of the curve.
5. The "vital few" principle was articulated by JM Juran in 1954. "Universals in management planning and controlling" Manage. Rev. 43(11), 748–61 (1954).
6. JD Eldridge has a nice discussion of Juran, Pareto, and Trueswell (another scholar of book circulation) in "The vital few meet the trivial many: unexpected use patterns in a monographs collection", Bull. Med. Libr. Assoc. 86(4), 496–503 (1998). http://www.ncbi.nlm.nih.gov/pmc/articles/PMC226441/
7. Brynjolfsson, Erik, Hu, Yu Jeffrey and Smith, Michael D., "The Longer Tail: The Changing Shape of Amazon’s Sales Distribution Curve" (September 20, 2010). Available at SSRN: http://ssrn.com/abstract=1679991. I plotted the Huddersfield data as done in this paper, and the library curve has the same slope they report for the 2008 Amazon data. Not very straight, though.
8. Brynjolfsson, Erik, Hu, Yu Jeffrey and Simester, Duncan, Goodbye Pareto Principle, "Hello Long Tail: The Effect of Search Costs on the Concentration of Product Sales" (November 2007). Available at SSRN: http://ssrn.com/abstract=953587. This is a study very relevant to libraries. I wish these guys would show more data, though.
9. There's a lot of old work (60s and 70s) on library circulation distributions with a whole bunch of theory. It's impressive, because they seem to have collected data by hand, but I fear the theory is too old to be useful. The 80s and 90s were marked by huge advances in the scientific study of self-organizing systems resulting in power laws.
10. (added March 17) Cosma Shalizi (first commenter on this post) has done a fit of the Huddersfield data to a Log-Normal distribution; I'll try to explain what this means in a subsequent post.

eBook Carrots for Libraries

"Provide a great service and charge a lot for it" was the advice of an old friend who became a successful businesswoman. I frequently think of this advice; I have sometimes failed to follow the second part and have mostly regretted it. If you provide what your customers value, you should have no qualms about asking them to pay a premium. If you don't give the customers what they value, they won't be happy even if you give them a big discount.

The results of the dual survey I posted on Monday are confirming my guesses about HarperCollins' new strategy for limiting checkouts of ebooks they license to libraries though Overdrive, which sparked the so-tagged #HCOD furor. (The limitations are in addition to a one user at a time limitation imposed on these ebooks.) The results indicate that HarperCollins' new service terms don't give the customers what they value. They'll be unhappy, even if they're offered big discounts.

At what price discount would your library opt for a 26-check-out ebook?

At what premium would your publishing company offer an unlimited-check-out ebook?

The survey for publishers has only attracted 28 responses so far, not enough to make anything other than very broad statements. The survey for libraries has attracted 155 responses, and thus has much better statistics. The poll is in no way scientific; there is sure to be significant sampling bias. In other words, the survey only measures the opinions of librarians and publishers who are motivated to answer.

Significantly, 37% (±5%) of librarians indicated they would not purchase limited-check-out ebooks at any price. I would characterize this response as arising from non-quantitative considerations, which might be practical, ideological or philosophical. A similar percentage of publishers, 28% (±12%) indicated that no amount of money would convince them to offer an unlimited-check-out ebook (which is the most common type today). So it seems that publishers also have considerations that transcend math, which I find a bit surprising.

If we compare the rest of the responses, omitting the non-quants, we see that the librarians perceive a much lower value for limited-check-out ebooks than do publishers. 52 of these 97 librarians would purchase limited-check-out ebooks only if the they were priced at a quarter or a tenth of the ebooks offered without checkout limitations. In contrast, only 1 of 18 quantitative publishers thought the relative value of limited-check-out ebooks was so small.

What's clear is that even omitting the non-quant responses, librarians are perceiving the new HarperCollins licenses as being worth a small fraction of the previous licenses, offered at the same price. It's not surprising that they think it's an awful deal. It's a stick, not a carrot.

Publishers SHOULD be valuing the two licenses based on revenue lift, and they don't seem to expect a huge revenue lift by limiting check-outs. 10 of 18 quantitative publisher respondents seem to expect a revenue difference of 50% or less. My guess is that they're roughly right; I will do some modeling based on library check-out statistics and report on that next week or so.

Looking at the survey results from the other side, librarians are reporting that they put a huge value on the "durability" of the ebooks they license. They don't want books of any kind that wear out! Publishers that want to deliver the highest perceived value (and thus justify the highest prices) should consider finding ways to add to this quality.

One way to increase an ebook's durability is to use standard formats, such as ePub or PDF. This increases a library's confidence that the ebooks will survive into the future; ePub and PDF are the formats used by Overdrive. Unfortunately the DRM ("Digital Right Management") systems that wrap these files are proprietary, and there is a risk that a library's "purchases" will disappear if their ebook platform vendor (Overdrive) or DRM provider (Adobe) disappear in the future. Libraries are used to thinking with long time horizons, and it's a rare library that doesn't have books over 50 years old, much older than either Overdrive or Adobe.

The simplest way to add to the long-term durability for ebooks is to provide libraries with DRM-free, not-for-circulation files in addition to the  DRM wrapped files for circulation. Libraries are used to dealing with license restrictions and have a good record of compliance in this sort of matter; it's likely they would opt to delegate the safekeeping of such files to third-parties. They'd also want to be able to use the files to replace the statutory copying of print books allowed to libraries under US copyright law and to aid discovery in their catalog systems.

Another way to increase the value of an ebook license to libraries without reducing publisher revenue is to selectively allow those uses that are most likely to create publicity and lead to sales. Imagine what would happen if most library ebooks allowed simultaneous use in the first month after a book's publication. This would help libraries attract patrons with "hot" items, and would likely increase total sales by building buzz. Many library readers would want to purchase the book once their loan period expired. More patrons for libraries translates into stronger funding, (or at least less cuts!) which in turn allows for better acquisition budgets.

Andy Woodworth has some more ideas on making ebook rights packages that would be attractive to libraries, and I'm sure there are be many more ways for publishers to offer ebook carrots to libraries. Or at least a parsnip.

Updates: The polls remain open. Gluejar is still hiring, but it's looking like the team will be awesome!

What is a Limited-Check-Out eBook Worth?: Two Polls

There's now a "Boycott HarperCollins" website that's trying to channel the response of librarians to the change in license terms I wrote about on Friday. The website, put up by librarians Brett Bonfield and Gabriel Farrell, calls for libraries to stop buying ebooks and print books published by HarperCollins or any of its imprints, and to write letters to HarperCollins' management.

I take a more "dismal" approach to this brouhaha. I simply point out that a limited-check-out ebook is less valuable to a library than an unlimited-check-out ebook. I don't think that anyone would disagree with that. It would be a step forward if everyone involved had a better idea of the extent to which limited-check-out impairs an ebook's value. HarperCollins seems to think the impairment is not too large, while I've not heard any voices in libraries say that it's small.

So here's a poll for librarians designed to find out what unlimited checkouts would be worth compared to a 26 checkout maximum. If you are a librarian, imagine that you are offered two ebooks that your patrons need. An unlimited-checkout version is offered at a deluxe price; a 26-check-out version is offered at a discount. At what discount would you choose the limited version?

 poll no longer available

And here's a corresponding poll for publishers. Imagine that your standard ebook offering comes with a 26-checkout limit for libraries. How much of a premium would you need to be offered to also offer an unlimited checkout (no simultaneous use) version ?

 poll no longer available

Of course, the answers will depend on what book we're talking about, what the budgets looks like, etc. but try to imagine what you would do for a typical situation. [Note: It's been pointed out to me that the answer is very different for best-seller vs. reference vs. fiction vs. non-fiction, etc. For the current purposes, consider the range of books published by HarperCollins, i.e. mostly trade books.]

I'm offering these questions to try to help advance library-publisher dialogue, so please don't cheat, answer honestly, and try to get your colleagues to participate as well.

Update 3/5: I discuss the poll results in a new post.

HarperCollins and the Suspension of eBook Disbelief

A good business requires a good story. The customer needs to understand the story of how the business can help solve a problem or deliver a benefit. There are many ways of telling a business story. Some stories are utilitarian; others are romantic or inspiring. Many stories require the consumer's willing suspension of disbelief. This isn't dishonesty, but the customer has to benefit broadly from a business's services and not be harmed by bits of the story that aren't really true. Macs sometimes crash. Facebook sometimes leaks your personal information. The New York Times sometimes really gets the facts wrong.

What you can't do, if the details of your business don't line up with your story, is to create cognitive dissonance for your customers by flaunting the untruth of your story. That's what HarperCollins is doing with its new policy for lending its books through libraries. According to ebook platform provider OverDrive, which first told its library customers about the policy yesterday, the new policy takes effect on March 6, and does not effect licenses purchased before then.

The story that HarperCollins and other publishers have been using is that ebooks are just like print books. They want consumers to accept similar prices for ebooks and print books, and have fought for this using tools such as agency pricing. For the library channel, the fiction is that libraries can lend ebooks to patrons so long as they work sort of like print books. The libraries can only lend them to one patron at a time. I've been calling this the "Pretend It's Print" model.

There are all sorts of good things about this model. It's easy for all parties to accept because it only changes things where they really have to change. It allows the coexistence of print and digital distribution channels. Nobody has to go out of business, except maybe Borders. It's comfortable, and there's much to be said for comfortable. The genius of this model is what has fueled the success of companies like OverDrive.

But if you're using a Pretend It's Print model, the one thing you can't do is stop pretending that it's print without a really good reason. You can't say all of a sudden that your ebooks should vanish into thin air once they've been lent 26 times. Your story about ebooks acting like print no longer makes sense, and all those customers who accepted your story have complete Twitter-fueled meltdowns.

Now, if there was a good reason to puncture the happy bubble of Pretend-It's-Print, that would be one thing, but a close analysis of HarperCollins' strategy suggests that the responsible executives wouldn't be able to pass a math quiz even if the class nerd was sitting in the chair next to them.

Let's review the possible motivations for the limited-check-out ebook.

Increasing revenue

 For ebook expiration to create increased revenue, the increased sales resulting from replacement of expired ebooks would need to exceed the lost sales due to customer rejection of expired ebooks. I'm guessing that less than half of libraries will be willing to buy limited-check-out ebooks. Based on the outrage that librarians expressed on Twitter, I'm guessing limited-check-out books might be avoided like the plague. Apart from the fact that they negate the collection-building motivation for ebook acquisition, the increased cost of managing newfangled things that automatically get lost by the 26th patron will be too much for most libraries. Although there will be indicators on the record in Content Reserve (OverDrive’s purchasing portal) to tell librarians which titles are limited-check-out, there won't be any indications of this on the MARC records that libraries use to include the ebooks in their catalogs.

 I'm guessing that the added sales will be approximately zero. There are two reasons for this. Libraries can set the circulation period for their items; 1-3 weeks is a common range. That means that the expired books will be at least six months old and more often a year or more old when they would need to be repurchased. Most books are discounted heavily once they've been out that long, and the value proposition of the ebooks won't look very good.

 The other reason that added sales will be minuscule is that libraries will erect elaborate countermeasures. Once half a book's checkouts are used, the libraries will artificially reduce its availability. They'll hide the catalog record. They'll restrict access. HarperCollins will be lucky to get crumbs from a bake sale.

 I'm sure you're thinking, "but what about the years and years of residuals?" 75 years from now, HarperCollins will be getting those ebook renewals. Well, dream on, and if you sum the infinite series of geometrically decreasing yearly revenue, you'll find it isn't as big as you think. Unfortunately for HarperCollins , that sum is almost calculus, and even their high-priced management consultants couldn't do an integral even if they were stranded on a desert island with a copy of Gradshteyn and Ryzhik.

Protection of the retail market

 As I wrote just yesterday, if the library channel loses its friction, then there's a significant risk to a publishers retail revenue. If the limited-check-out ebook introduces the sort of inconvenience that would deter a possible book purchaser from using the library instead, the changed policy might be justified. But a limited-check-out ebook will look exactly the same to a patron as an unlimited-check-out one, so this possibility seems remote. Once the book expires, of course, the library option goes away. So there might be some depreciating value there.

The current library situation, however, does a great job of erecting an availability barrier. eBooks are so popular that in most libraries, many books have long waiting lists. Patrons are pushed towards less popular titles, which is a huge benefit for publishers, because the titles and authors that would not be selling are effectively marketed to new readers. It's hard to argue that anything on the list of most popular ebook downloads at OverDrive has suffered even a tiny bit!

 The only way that market segmentation will be affected by  the new policy is that OverDrive's engineers will be distracted from improving user experience by the need to modify systems to accommodate HarperCollins. OverDrive, I feel your pain!

 If a publisher is truly concerned with sales lost to libraries, the honest thing to do (as Macmillan and Simon & Schuster have done) is to not provide books to libraries at all.

Other Models

 What bothers me the most about the HarperCollins move is its lack of imagination. I wouldn't mind the check-out limit at all if it was part of a tiered price structure. The limited-check-out feature reduces the value of the book; this could have been a low-priced option alongside the full-priced unlimited check-out model. I'd also like to see experimentation with other lending models. For example, an unlimited simultaneous user, limited time license. A library could get its whole community reading a book together. Or packages of single use licenses that libraries could use to supplement a permanent license for a popular title. Or "explorer" packages allowing a fixed number of total checkouts across titles from a backlist. Experiments like these could be designed to bolster both libraries and publishers.

 HarperCollins may be inept, but it isn't being evil. Pricing for digital products is really difficult. Once you drop the pretense of print, you run into new issues of fairness. Does it make sense to charge the same for an ebook to a small library that you charge to a large consortium? Of course not. Does it make sense to charge for a blockbuster what you charge for a work by an unknown author? Of course not. It's easy to poke holes in a pricing strategy; it's much harder to come up with a regime that works for everybody.

I said it a year ago, and I'll say it again:

Now is the time for publishers and libraries to sit down together and develop new models for working together in the ebook economy.