Will ebooks be the end of public libraries?

by Public Libraries on October 31, 2011

Amazon recently announced that their Kindle books are now available at over 11,000 libraries in the United States.  I believe this will be remembered as the major event that started the demise of libraries as we know them.

Amazon is absolutely on a tear right now as a company.  Their sales and profits have been growing by
leaps and bounds and their investors have been well rewarded.  It appears everything the company touches turns to gold.

It’s with this backdrop that Amazon is launching their new Kindle Fire tablet for an amazing $199 and also their new Kindle and Kindle Touch for $79 and $99 respectively.  The Kindle Fire preorders already have it on pace to outsell the Apple iPad and iPad 2 in their first months of release and the iPad was the fastest selling electronic gadget in history.  They are going to sell a ton of these things.

Unlike Apple, Amazon sold books first and then decided to make an electronic reader.  Apple made an
amazing tablet that just happened to also be great for reading ebooks.  This is a significant difference that suggests that people that buy the Kindle Fire will be much more likely than an iPad buyer to use their device for reading ebooks.

Add it all up and a lot more people are going to be reading ebooks.  And once someone starts reading
ebooks, they expect their local library to carry ebooks for them to borrow.  Libraries will naturally respond to their customers by drastically increasing the number of ebooks they carry.  And this will be the beginning of the end of the library as we know it.

Libraries have invested massive amounts of money into acquiring, storing, and distributing physical books.  Unfortunately, physical books are going to become like CDs or vinyl records.  You can get a song on a CD or a record, but why would you when you can get a digital version from Apple, Amazon, or a streaming service?  The digital version is better in almost every way and the old versions are almost unusable today.  Sure, some people will still want the old media for personal reasons but most people will opt for the most modern format.

So what?   So libraries will need to start buying ebooks instead of physical books.  Where’s the doom and gloom?

To see the end you need to start with where we are today.  A library currently buys a physical book for the same price as you or me.  They own that physical copy of that book.  They then loan that book out to a large number of people over the life of the book.  The only time they have to pay anything for that book is when they buy it, when it gets lost, or when it needs repair.  The book is theirs.  All they have to do is figure out how to store it and circulate it.  There is value in owning the physical copy of the book.  The value is that you can loan the physical copy to as many people as you want and they can all benefit from your initial purchase price.

An ebook is completely different.  If I buy an ebook all I own is the right to have a copy of that ebook on my devices.  If I copy the ebook file and give it to my friend I am breaking the law.  This is the equivalent of buying a physical book, photocopying all the pages and cover, putting them together and giving the entire copy to a friend while I keep the original book.  Even worse, if I put a copy of an ebook on my website, the entire world can instantly download a copy for free with a single mouse click.  This would be like running my own printing press and shipping physical copies of the book to everyone in the world for free.  And then I would really be breaking the law.

So when you go to your favorite seller of ebooks and click “buy”, all you are purchasing is the right to have a copy of that ebook file on your devices.  Depending on the publisher and the book, you will be limited to how many devices you can have the ebook on and also if you can share the ebook.  The publishers have also attached DRM (digital rights management) to ensure that you comply with their ebook license requirements.  This is drastically different than a physical book.

Libraries will need to adjust their business model in order to loan out ebooks.  They can’t just buy one ebook and loan it out to a bunch of people by allowing them to download a copy of it to their ereader.  This would violate the terms of use for the ebook which explicitly state that the ebook can only be used on one or a few devices.  But libraries definitely want to offer ebooks to their customers.  As a result, publishers are trying to come up with ways for libraries to buy and rent ebooks.  There are several different models that are being tried right now and all of them are trying to address a major problem that the publisher has.

Why would a publisher sell an ebook to a library which would then be rented out with the click of a button to tons and tons of people which might buy the ebook on their own if it weren’t available at the library?  To address this problem, publishers are coming up with various licensing agreements for libraries.  There are many different options being tested right now, but all of them will result in a much higher cost for libraries than if they were purchasing a physical book.

So a physical book is a screaming good deal for a library since you only have to pay once for it.  In a highly unusual turn, an ebook will cost a library much more than a physical book because it can’t be loaned out to an unlimited number of people for a one time small purchase price.

As ebooks become more popular, libraries will have to allocate more of their budgets on them.  This means they will have to carry fewer physical books and will be able to offer fewer ebooks since they cost more.  Add this all up and it means that libraries will have much higher costs and will have to drastically change their business model if they hope to survive.  This is the end of public libraries as we know them.

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