When it comes to the library e-book lending market, it’s fair to say that Simon & Schuster has been the most cautious of the major houses. It was the last of the Big Five publishers to enter the game, launching a one-year pilot with three New York City library systems a year ago this month. So, at the one-year mark (and with recent headlines suggesting the library e-book market may be opening up after a contentious few years), we checked in with S&S to ask, how is the pilot going?
So far so good, according to Doug Stambaugh, v-p of global e-book market development and strategy—although, he pointed out, it is still early. In December, S&S expanded its pilot to 15 more library systems, a move that was viewed by many as a sign of the pilot’s success. But, in fact, the expansion was necessary, because the data from the three New York City systems (NYPL, Brooklyn Public Library, and Queens Public Library), while encouraging, simply did not represent a big enough sample.
“Basically we have to come to a place where we are comfortable,” Stambaugh said. More data is needed, he stressed, before S&S can decide whether to expand further. “Libraries are extremely important to us,” he explained. “We’re trying to serve that market effectively, while mitigating some concerns we have about some of the potential long-term implications for us. And we really believe in the importance of data in helping us to do that, which is why we are going about this in the way that we are.”
For S&S, or any publisher, obvious big red flags would include a negative impact on retail e-book sales or a spike in piracy, although Stambaugh said the company is not “super concerned” with security issues. The risk of piracy is no different than in the consumer e-book market, he noted, and “all the library vendors we’re working with use commercial-quality DRM solutions.”
So what does success look like? Basically, S&S is hoping to understand how libraries can drive discovery and sales. And the pilot, Stambaugh said, should allow S&S to effectively compare areas where the titles have been made available against those where they are not available, and measure the effect on sales and discovery. “We’ll be able to see over time what the differential impact is,” said Stambaugh, and that will be critical in determining whether the pilot has succeeded.
As far as sales and discovery are concerned, a linchpin of the S&S pilot is a buy-it-now option, which the company would like to see widely adopted in libraries. “We definitely view the buy-it-now option as a very important part of this program for us,” Stambaugh said, and “as a long-term play for us as a publisher.”
S&S is not expecting an immediate sales bonanza from libraries. Stambaugh, however, hopes the option will prove valuable—not only to book publishers but also to libraries, which receive a portion of the proceeds, and patrons, who benefit from added convenience.
“In general, we’ve been surprised by how receptive the library community is to this model,” Stambaugh said. “There’s a realization among a lot of folks in this community that this is a model that can really benefit everybody.”
Anne Lee Silvers, who retired last month as chief of the materials management division at the Free Library of Philadelphia, said librarians did initially harbor reservations about introducing a commercial element to their work. But it has not been an issue, she said. “If you choose to read on a device, whether it’s from Amazon, Barnes & Noble, or Apple, then you are already being marketed to on that device,” she noted. “So, libraries are just finding ways to support reading and literacy in that ecosystem.”
Christopher Platt, director of BookOps, the shared technical services organization for New York and Brooklyn public libraries, said NYPL had been considering a buy-the-book option even before the S&S pilot. “We did canvas other libraries before launching, and each of them told us to manage our expectations carefully, because library users are not often in the catalogue with the mind-set of purchasing books. They told us not to expect to do gangbuster business. And that in fact has been the case.” Platt said the library is also wary of taking sales from bookstores, so a “find a local bookstore” link has been developed. “We’re mindful that a robust community of readers is served not just by libraries but by booksellers,” he said.
The S&S pilot has also offered a chance to explore new wrinkles in the current lending models, which differ from publisher to publisher. Stambaugh said that S&S had about six months of “very useful” discussions with librarians, including the American Library Association’s Working Group on Libraries and Digital Content, before launching its pilot in April 2013. The upshot was a preference for metering e-book usage by time—thus, S&S titles in the pilot are available for one year before they must be relicensed, rather than requiring relicensing based on the number of checkouts (HarperCollins), or a perpetual access model (Random House). Simon & Schuster also made its complete list of titles available, a decision that has been validated, in Stambaugh’s view, by the breadth of titles being purchased and the incremental exposure being provided.
“In a few short months in 2014, Simon and Schuster has captured 6% of our total e-book circulation,” said Holly Varley, the materials selection and acquisition manager at the Public Library of Cincinnati and Hamilton County (Ohio), which was one of the libraries the pilot expanded to in December. “They are sixth out of 289 publishers—that’s 10,000 circulations to customers who are now reading S&S titles, in just the first quarter.”
Stambaugh said the one-year expiration was chosen because it meant less ambiguity for librarians from a budgeting and managing standpoint. In addition, the model allows for the purchase of multiple copies to meet immediate demand, without a long-term commitment, as required under a perpetual-access model such as Random House’s; its titles can cost up to three times the list price. S&S library e-book titles are priced at or near retail prices. “We purchase to meet a holds ratio, so lower-cost items allow us to control costs while meeting high initial demand,” said Varley. Silvers agrees, adding that lower prices also make it easier to buy a greater variety of titles, “including little-known, first-time authors, or midlist titles.”
While the feedback about S&S’s model has generally been positive, some librarians note that lesser-known titles may not take off until a year or more after their release, in which case the checkout-based model can offer more time to gain traction. There is also concern that annual relicensing decisions could present a time-consuming chore.
“The challenging part of expiring content is with the classic and perennial favorite titles,” Varley said. “We would like to buy those outright and not have to monitor and purchase year after year,” she said, adding that the HarperCollins’s 26-checkout approach remained a strong model, due, in part, to the library’s 21-day loan period, which results in a maximum of 17 circulations in 12 months.
For librarians, a hybrid model, where libraries can buy many one-year or limited-circulation e-book licenses for a popular title at a lower price, as well as one perpetual license at a higher price for collection building, might make more sense.
“That might be one way we could meet high demand affordably and still build a collection over time,” said Silvers.
Work in Progress
To that end, Platt stressed that the S&S pilot is intended to inform and guide future development: “I believe libraries need to push for more consistency in these still-nascent business models, so that library readers see a more uniform experience and libraries are not unduly pressured with managing a complicated landscape of individually expiring copies—whether that means books expiring from a time model or a per-usage model—and are not unduly prevented from building a robust e-book offering because the cost of entry for some titles is too high for local budgets.”
Still, a year later, librarians are happy that S&S has gotten into the game, and Stambaugh said most librarians are understanding of the publisher’s concerns and caution. Libraries hope the publisher understands their concerns as well.