This is the second article in a three-part series on ebook business models in K-12 libraries. In the first article, we looked at what a business model is and at the four main kinds of ebook business models that K-12 librarians need to know about. In this article, we will look at each of the four basic models in more depth and glance at some examples of them. We will not attempt to compare product offerings in depth, but I will mention an example or two of each model. Because ebook technology is still in its early stages, the platforms and feature sets of each offering change rapidly, so any comparison is bound to be a snapshot at best.
If there is enough interest in an up-to-date comparison, I may write a series of comparison articles after this series has been completed. In the third article, I will draw some conclusions and provide links to other articles on ebooks in K-12 libraries, including some in-depth comparisons. After reading the three articles, you will be able to see how any ebook offering is based on one or more of the four basic ebook business models. This will help you decide whether or not the offering will help your library achieve its goals.
As you read, keep in mind that ebooks are not simply digital versions of printed books. Legally, they are licensed as software, so when you buy an ebook you are buying a license to use a piece of software. You are not buying a physical object. You do not own it in the same way that you would own a printed book. Technologically, they are completely different, too. While they may look like pictures of books on the screen, under the skin they are software.
On the one hand, this brings some limitations, but at the same time, it is possible to use ebook technology to empower readers in ways that cannot be done with print technology.
Balancing the ebook needs and wishes of creators, publishers, resellers, librarians, and readers has been and continues to occupy the best efforts of many professionals. Most of these professionals agree that in an ideal world information would be free, but in the real world we all need to eat so information is not free. We need multiple ebook business models for various kinds of books and for their various uses in order to accommodate everyone involved. As you think about the different ebook business models, keep in mind that each one is an attempt to balance the needs of these different groups so that all may prosper and so that our common enterprise of bringing education and culture to students and adults may flourish.
Before looking at the four main business models, I want to make clear that there are several ways of buying books that we will not consider as separate business models. These may look like unique business models, but for our purposes they are not. They use the same business models we are already planning to look at, though in different ways.
Let’s start with consortial purchasing. Your library may belong to a consortium that offers ebooks. That can be great for improving your buying power and getting you better terms, but it does not affect the business models that your suppliers use. To them, they are offering you a better deal than they would if you bought directly from them, but they are staying with the same business models. For instance, if you subscribed to a database of ebooks through your consortium, the supplier might offer you a 10% discount, but the business model would stay the same. You would still be purchasing a subscription to a database of ebooks for a specified period of time. Hence, we will not consider consortial purchasing as a separate business model.
Another apparently new business model is for publishers that have traditionally served K-12 libraries to sell directly to parents, especially to homeschoolers. While home schools may be a new market for these publishers, the publishers are not using a new business model to sell to them. They are using the same business models that they use with public and private schools.
Lastly, Amazon, Scribd and other players offer authors platforms with which to self-publish their books. Self-publishing or indie publishing is a field in itself, and we intend to write more about it. For now the key idea is that, while it is a different business model for the authors (they intend to make money by publishing and selling their books without the help of a traditional publishing company), it is not a different business model for the platform companies that provide the technology to the authors. They are selling the books with the print book model or with the subscription model. That is, you can buy a permanent license to books of your choice, or you can buy a subscription to a collection of books.
Ebooks as Printed Books: The One User/One Copy Model
The first ebook business model we will look at is one in which ebooks are treated as if they were printed books. This is easy to understand, because we are all familiar with it. In this model, publishers and resellers earn money by selling ebooks just as they would by selling printed books. Librarians and patrons use the ebooks just as they would printed books. One patron can use each book at any given time, and each book must be deleted from or disabled on one patron’s devices before it can be used on another patron’s devices. Librarians select books one at a time, purchase licenses to them, and then manage them in their ILS much as they do printed books.
This model provides three technological advantages over printed books. First, the ebooks do not require physical processing or management in the library. This saves space and labor for librarians, as well as for publishers and resellers, not to mention for readers. Second, when one patron returns a book (or the loan period expires and the book is automatically disabled), the next patron in the queue can immediately check out the book. Neither patron has to schedule and make a trip to the library. This can result in a faster circulation rate and more efficient use of library resources.
Third, ebooks will not wear out, be stolen, or be lost, so they will not have to be replaced. This can conserve library funds; however, for some publishers this is a concern because they need the revenue from replacement sales to maintain their profit margins. These publishers charge libraries higher prices per copy or they limit the number of circulations before requiring purchase of a new license for a title.
Other than these three, this model does not take advantage of the ebook technology. In fact, there is often a disadvantage in that many of the suppliers charge an annual platform fee, which acts like a subscription charge on top of the book purchase price. If the library is unable to pay the platform fee, then it loses access to the books it has paid for.
This model has many variations. Sometimes, the terms are more generous to the library, such as when several students are allowed to use a single book concurrently. This works well for reading groups. At other times, the terms are more onerous and involve high prices or limits on checkouts before repurchase is required, as mentioned above. Depending upon the supplier’s platform, the ebooks may come with various high tech features, such as online note taking and sharing, but the fundamental business model is the one we all know from printed books. Sometimes called the one user/one copy or one to one model, its essence is to treat ebooks like printed books.
Most of the companies that supply school libraries with ebooks offer books with this business model, though they may also offer books on other business models. OverDrive, Cloud Library, Axis360, Follett Shelf, and MackinVIA are examples.
Online retailers (Amazon, Apple, and Barnes & Noble) also offer their consumer business model to school libraries. This is still the one user/one copy model.
If you want current popular nonfiction and bestseller fiction, you will need to use at least one of the suppliers that offer this model.
Ebooks as Journal Articles: The Subscription Model
Moving a further step away from treating ebooks as if they were printed books, we come to subscription business models. Librarians are familiar with subscriptions to databases of journal articles. The model is the same with ebooks. The library subscribes to a collection of ebooks for a period of time, usually for one year. The suppliers who offer this model have assembled collections suitable for school use. Often, the selection is updated every year to keep the content current.
The details of this business model vary from simple unlimited simultaneous use to complex levels of purchasing that are based on Demand (or Patron) Driven Acquisition, to be discussed, next. Along with the three technological advantages that carry over from the ebook and printed book model, the additional technological advantage of treating ebooks as elements within a database is that the library is able to provide access to sometimes large collections of books at minimal cost. The disadvantage is that if the library loses funding and cannot renew the subscription, then it loses access to the entire subscription collection.
Some examples are Gale’s GVRL and ebooks on EBSCOhost. Collections often contain reference books as well as fiction and nonfiction. Follett and Mackin also offer this model.
Demand Driven Acquisition: Something Like a Bookstore
Demand Driven Acquisition is our third kind of ebook business model. In the ebook as printed book model, we treated ebooks as if they were printed books. In the ebook as subscription item, we treated them as if they were database content. In the DDA model, we blend the two.
An analogy from the world of the book trade may help you understand this model. Imagine that you entered a bookstore and began to browse. You then became engrossed in a book. After you had read for a few minutes, a store clerk tapped you on the shoulder and said that if you intended to read the book, then you were going to have to pay for it. At this moment, a librarian magically appeared and said that the library would be happy to buy the book for you.
In DDA, the supplier provides a bookstore full of ebooks curated for your needs. Your students read whatever they want, and you pay only for the books that they pull from the shelves or read.
In some cases, you may have to pay a startup or other fee to begin, but this can be very low. It is only when a student checks out or reads a book that the library pays. Your supplier intends to earn money based on downloads, time spent, or some other metric. So, at the outset, this is like a subscription, but as time goes on it becomes more like the ebook as printed book model. Of course, there are many variations as to when payment for a book is required, whether the library then has a perpetual license to the book or a temporary license, etc. An straightforward example of DDA is Brain Hive, which rents ebooks for $1.00 per checkout. Their collection is tailored to school libraries and includes titles from Lerner and other school library oriented publishers.
The last model we will look at is unlimited simultaneous use with perpetual access. It takes full advantage of the low cost of copying and distributing ebooks, and it has none of the limitations that inhibit the free flow of information that are found in other models.
The publishers that offer this option typically have built their business on supplying school libraries rather than public libraries or the general reading public. They have close relationships with the school library community and are staffed by editors with teaching and curriculum backgrounds, who have in-depth knowledge of school library needs. In this model, all students and faculty have full access to the ebooks, so it is almost the opposite of the ebook as printed book model. In the ebook as printed book model, only one person can read a book at any one time, and the library must buy multiple copies, when needed.
Unlimited Perpetual Simultaneous Access: A Model for Curriculum Support
In the unlimited perpetual simultaneous access model, the library has the equivalent of an unlimited number of copies for the price of one copy, and everyone in the school can read the same book at once. The key differentiator of this business model is that the publisher intends to earn money by providing content that will inevitably require replacement in time, such as curriculum support that is closely correlated to a specific curriculum and that will need replacement when the curriculum changes, or nonfiction material that will need replacement as science uncovers new knowledge. Otherwise, the burden of operating the platform without receiving additional payment would put the company out of business.
An example is Rosen Publishing’s epointplus. Resellers including Mackin and Follett also offer this model.
To conclude, we have looked at the four basic ebook business models that school librarians need to know about. Each of these models has permutations, and often more than one model is offered on a single platform. We have also given examples of each model, but we have not compared examples. Next week, we will look at how a school library might combine several business models to serve its needs, and I will provide links to additional reading.