As a long time software entrepreneur and executive, my first “lesson” in how the publishing industry works occurred over a decade ago. As a founder of CreateSpace (now an Amazon.com company), we had developed a print-on-demand (POD) infrastructure that provided global inventory-free fulfillment of low velocity books. It had been adopted by tens of thousands independent authors and small publishers. Early on, we proposed our POD solution to a major publisher, with a clear value proposition: give us your out-of-print backlist, and for no effort earn incremental sales. The sales pitch could not have gone better. Lots of smiles, nods, agreement. But when we went for the close, the response from the large publisher was essentially, “it all sounds fantastic … but we are never the first to do anything.” We solved a major publisher problem, yet the status quo prevailed.
In our latest BiblioBoard venture, we identified a problem that seems even larger in scope and threatens the long-term role and viability of libraries in the digital age. The problem revolves around existing library eBook lending platforms and can be summed up as follows:
– Patron usage of eBooks remains very low (6% or less), particularly compared to popular consumer products from Amazon and Apple (back in 2011, Amazon announced that eBook adoption had passed 50%).
– Libraries are operating in fear of success, as higher patron usage (under the existing eBook circulation business rules) leads to increased wait lists, budget crises, or both. If they succeed, they create more problems.
So we find ourselves again up against the wall of the status quo.
If one were to look at the demand curve for a typical publisher catalog, we would find a large head (the “front list”) and a very long tail. Intuitively we understand that most consumer book sales occur in the first year or two after publication. Publishers require that libraries use these artificially constrained eBook circulation rules to protect the value of their front list, perhaps 5% of the overall catalog. But they also applied the same business rules to the other 95%. This has resulted in an amazingly clunky user experience (long wait lists, cumbersome check out processes, limited reading periods, etc.) and, not surprisingly, low patron usage. And these circulation rules address a largely a made up problem, as usage stats illustrate that these rules are simply not necessary for most long-tail (lower demand) books. Ironically, this becomes a self-reinforcing cycle, as usage drives library priorities, budgets and funding. The result is a chasm has now been torn between the publishing and library worlds, an unnecessarily adversarial relationship with an incredibly influential industry.
The reality is that publishers are also afraid. And not without justification, as their traditional business models have been materially impacted by market forces. They fear the negotiating power of Amazon, who has now moved into publishing. They fear the democratization of book distribution brought on by the success of self-publishing, which thanks to companies such as our CreateSpace alma mater, have demonstrated that independent authors have a legitimate place in the world of media bestseller lists. They fear cannibalization from library distribution. They fear the unknown, and they fear change. Or rather, as Ronald Heifetz once said “What people resist is not change per se, but loss.”
There is another way to bridge the divide. Let me paint a metaphor. Netflix has millions of users and is incredibly intuitive and engaging. Notably, users have no expectation when they subscribe to Netflix that they will get the latest content. Indeed, it is only after movies and shows have exhausted their prime consumer business potential (theaters, DVD, on-demand, etc.) does it become available to subscribers. This does not, in any way, imply that the service is not of high value. Moreover, the service has had little cannibalistic impact on sales, and it actually has many marketing benefits. After Netflix offered the Breaking Bad series, it drove millions of consumers to buy the latest season (myself included :). It also exposed new content and artists to millions of consumers who might not otherwise have discovered their resonance. Best-selling author Hugh Howey gets this, and uses his back list to drive sales of his front list. Library Journal recently found that over 50% of library users go on to purchase books by an author they discovered in the library. So the library has become an effective vehicle for independent authors to get discovered and build a marketing presence. Library Journal’s SELF-e program addresses the fundamental challenge libraries face in this navigating self-published content.
Libraries also have an important role in bridging this divide, where there is an interesting philosophical debate that surrounds the central question of whether it is the role or responsibility of libraries to provide patrons with access to best sellers at the same time as paying consumers. Many view it as a social responsibility to not “restrict access” to books that patrons might not be able to afford. One library received much attention for spending $23,400 for patron access to a single eBook title, “Fifty Shades of Grey.” Putting aside the literary merit of this particular book, the question is really whether this is a good use of finite resources, when that money could be used to expose patrons to far larger pools of great literary content. Is the central role of the library to level the economic playing field between the content haves and have nots, or is it broadly promote literacy and education?
Both libraries and publishers have a role to play in this drama. But an important first step is to understand the other’s position and find a better model, because the current one just isn’t working. Libraries can become the biggest advocate for publishers but they can’t as long as they are understandably reluctant to recommend or promote content that their patrons can’t actually easily access, and thus causes them more pain. Our BiblioBoard Library platform also plays a role in addressing these challenges, helping libraries and publishers find common ground. An upcoming Publishers Weekly executive roundtable is focused on bridging this divide. The focus of BiblioBoard is exclusively on enabling an amazing patron experience (the three E’s of software design that I outlined in my recent TEDx Talk: Easy, Elegant and Engaging), providing a shared software service that handles all the technical challenges of our mobile world, and an open platform with the freedom to deliver ANY content they want. And, of course, we continue to work with publishers around our PatronsFirst business model, and today have hundreds of publishers (and over 100,000 books) ready for the brave new world. Status quos are meant to be broken.