At the ALA Midwinter Meeting in San Diego, a standing-room-only panel focused on how e-books will affect the future of libraries. From research and pilot programs to digitizing efforts, libraries have long helped prepare the way for e-books. But now that the consumer market for e-books has taken off, are libraries in danger of being marginalized?

On the panel was Brewster Kahle, founder of the Internet Archive as well as the Open Library project, a digitizing program for library e-books that now includes more than 150 libraries and two million, mostly public domain, digitized books available for online lending. Kahle urged librarians not to give up their traditional roles, and not to let the promise of vendor-managed, licensed access turn libraries into agents for a few major corporations. "What libraries do is buy stuff and lend it out," he says, suggesting that libraries "digitize what we have to, and buy what we can."

PW caught up with Kahle to talk about e-books, sure to be a hot topic at the ALA Annual Conference.

Libraries have been at the cutting edge of e-book development, especially in the academic setting, but with trade e-books now surging, where do public libraries stand in this transition?

E-books are no longer a going-to-happen thing—they've happened. And libraries are now trying to figure out how to support their traditional roles with e-books. Already an enormous amount of library book budgets go to, or will soon be going into, e-books. So far, though, there is pretty much Overdrive serving public library e-book needs. Now, Overdrive is quite good. But having one vendor become the gateway to e-books for libraries is probably not the best thing, at least not for libraries. What I want, and what we find libraries want, is to buy e-books. And when I say "buy," I mean like we buy print books. We write a check, and in return we get a copy that we can preserve long-term and lend out to one patron at a time. But so far, we're finding that a lot of publishers get confused when we talk to them about buying e-books. We'll say, "We want to buy your e-books, how much money do you want?" They'll say, "What do you mean ‘buy'?" It seems weird to have to explain what "buy" means, but we've all grown so accustomed to having digital transactions be accompanied by a 20-page license agreement.

Some publishers are nervous about letting digital copies out of their control, even to libraries, and how free library e-books will affect growing e-book sales. How do you ease those concerns?

Let's get some checks being cut. Let's get more authors and publishers making more money. Let's create more people who can stand up and say, "I got rich selling e-books to libraries." The big message I have to deliver is: libraries are interested, readers are interested, and right now, this is the time to kick things into high gear. This should be the library's day. There's been lots of talk, and lots of experimentation in the past, but readers are ready, the technology is ready, so let's get some money flowing. Let's get lots of books being read in lots of different ways. It is important that we not squander the digital opportunity we have right now because we want to wait to see what might happen.

When you say now is the time, do you also get the sense that the clock is ticking? That if libraries can't deliver e-books to the devices of their readers, especially readers growing up reading almost exclusively on screens, the public might lose interest in libraries altogether?

Yes. I think this is a ticking time bomb. I have two kids, and they're not using libraries the way I did growing up. More and more, the only things our children read are the things they find online, and the very best that we have to offer them is not online. If we let this go for five or 10 years, we'll get a generation that is going to be satisfied to learn from whatever Internet resources they can get hold of, and that's not going to be a pretty picture. And it will be our fault. We're the librarians, publishers, and authors. It is our responsibility to put the best we have to offer within reach of our children. And right now, we are failing at that. The challenge before us is to deliver the voices of the 20th century to the next generation and to build digital libraries that aren't just collections of old stuff but also offer access right up to the current day. There's a way to thread this needle, but it requires some experimentation.

What do you make of some major publishers not selling e-books to libraries at all, and HarperCollins's 26-lend limit?

I realize that everybody doesn't have to jump at once. But when it comes to e-books, we have more money sitting off the table right now than passing over into publishers' and authors' hands, and that just doesn't make sense to me. Right now, we have some publishers that aren't willing to sell their products to libraries, and some that are, and, yes, we are buying some e-books, but not nearly as many as we'd like. I understand we probably have to figure out pricing, but let's get the money flowing and figure it out. There's hundreds of millions of dollars to be made selling EPubs to libraries, but so far it is slow going.

Is there a compromise in perhaps selling digital editions of popular books to libraries at higher prices, rather than unwieldy lend limits?

Libraries are used to paying a bit more for library versions, whether it's with a library cover on a book, like in the old days, or an institutional journal subscription, where libraries pay more than the cost of a personal subscription. If e-books have to cost a little bit more, okay. I can't imagine why any publisher would turn down the billions of aggregate purchasing dollars out there. Let's test some models.

What's your impression of the current and developing e-reading services and devices out there?

Well, first, my hat goes off to the Amazon team for basically showing the world that readers are willing to spend money for bits. That wasn't easy. At the Internet Archive, we're not in the everything-online-for-free camp, we're in the let's-make-sure-we-still-have-authors-and-publishers camp. So my hat is off to Amazon for showing that there is money to be made.

But we're really looking forward to books in browsers, on open tablets, sort of like the way it works with Google eBooks. Because while I think the devices out there now are okay, I don't like having central points of control, and neither should publishers. That movie never ends well. I think it is absolutely critical that we continue to develop a distributed system for e-books that is open and standards-based.

Are you concerned that companies like Apple, Amazon, and Google, that create attractive, powerful platforms and tools, will dominate the book world? And why does that matter?

The last time we fought a battle like this was in the 1990s, when the Web was going to be run by AOL. I'm hoping publishers see the value in keeping control over the distribution of their works, because if you hand over distribution and pricing, you're not an independent company, you're a division. I say, let's have Apple, Google, and Amazon, but let's have lots of other tablets and distribution systems at work, too. Let's have publishers be able to actually distribute things directly. That will allow a richer array of publishers to evolve a much richer book environment. I like this approach because we can have many winners. We can have many publishers, many booksellers, many libraries, many authors, and many, many readers, with no central points of control coming between them, just capitalism. Books are simply too important to have either a monopoly or duopoly evolve. Books are how we as a civilization think things through, and I don't want anything more than the rule of law governing that.

What are your thoughts on DRM and the e-book experience?

I have a statistic that's interesting. We looked at the people who were downloading and borrowing e-books from the Internet Archive, and borrowing books through the Open Library site, and, of the people that found an e-book they wanted to borrow, [already] had [their local] library card, logged in, clicked to get the download going, of the people that got that far, less than half of them successfully got the book to launch. This is using Adobe Digital Editions software, which is free and pretty good. That's an awful lot of frustrated readers. I think we have to do security differently. It's one of the things I like about books in browsers. It will always be possible to steal a library book, and the diligent will do it. But the way we're doing security now just makes it difficult for readers.

As we gather for ALA, we're at an interesting point for libraries and e-books. What are the best–worst scenarios?

The latest scenario is that we have universal access to all knowledge, in-print books with payments happening, out-of-print books that are available universally in some form, and that we have a public domain freely available everywhere. That is within our grasp, right now, technically, and monetarily.

My biggest fear is that libraries will become customer service departments for a few large corporations. That publishers will become less and less interesting, and that a shift toward central points of control will undermine the major lesson from the Enlightenment, which is to encourage open, public, intellectual discourse.

See all of the features in our ALA 2011 preview.