E-book packages, where publishers sell libraries all their titles at once rather than allowing them to purchase title by title, make money from more than just the obvious way. Not only can providers inflate sales of obscure titles by adding them to packages, they can also inflate prices by charging for the amount of use their e-books are predicted to get. They do this through charging by “concurrent users” (cc users); that is, the number of people who can view an e-book at the same time. For example, a charge of 5 cc users would mean that five readers could access the same ebook at the same time.

This method makes a certain sense for popular titles. After all, when a print book gets popular we have to buy more than one copy to meet the demand. But content providers exploit this charge by setting all the titles in an e-book package at the same cc user level – you must pay for the same number of cc users regardless of how obscure a title may be. So, not only do you not get to choose which e-books to buy, you don’t get to choose what cc user level to limit each title at either.

Unlimited use = New head tax

Knowing cc user limits are unpopular with libraries, many providers now sell packages with “unlimited” cc use. But they use a neat trick to inflate prices here too. The trick is to charge each university by its size (so called “tiered pricing”), so that the larger the university, the higher the price. Again this makes a certain sense for heavily used e-books. But for all the others in the package big universities end up being penalized— paying a premium for e-books that are used much less frequently (if at all). In the print world we would only ever buy one copy of lesser used books, regardless of how big the university. Now we’re charged as if we were going to buy multiple copies of everything.

A much better e-book scenario for academic libraries is the one that public libraries have already seized upon: the downloadable ebook (the Overdrive model). Rather than sitting on a server these e-books are downloaded onto ereaders (and perhaps iPhones and iPods in time)! They come with DRM that limits the amount of time they can be used. Libraries can buy e-books by the copy this way, just like they do for print books (that is, one copy for most, multiple copies for heavily used). And better yet, it’s one price per one copy of an e-book, regardless of the size of the university that buys it. This is building an e-book collection using the same method that libraries used to build the great print collections that have driven scholarship for centuries.

Big packages have their fans

So, what’s with academic libraries? Why aren’t they waking up and demanding that publishers provide them with this model of ebook ownership? One reason may simply be that many library directors don’t realize that the Overdrive scenario is possible and that it works (you don’t have to have an e-reader to download these – a regular pc will do). But surely another reason big packages suit library directors just fine is that they enable them to build big e-book collections quickly, and having a big ebook collection looks great on paper! (Sorry, couldn’t resist.) It helps you the library directory, and your library, look cutting edge.

A hidden bonus from the library director point of view is that they enable reduction of staff complements since packages don’t have to be selected by professionals on a title by title basis— providers simply do away with the selection altogether by selling you everything. And, since you’ve blown your budget on big packages, you don’t have to worry about selecting anything else either.

(The gradual deprofessionalization of academic librarians as a way of reducing staff is already underway—see this).

Should you care about this? Only if you care about universities, because good scholarship requires a wide range of sources of information and these big packages do the opposite by tying down budgets. The more money devoted to these packages the less there is available to buy books (e or otherwise) by smaller publishers. Anyone publishing outside the major publishers gets shut out of the conversation. I’ve actually heard library administrators rationalize this by saying that times have changed and that scholars don’t require the same breadth of information today. Perhaps, I’ve been told, scholars don’t need research libraries any more.

Well, whether they do or not, the continued addiction to package deals for e-books will certainly make sure they never get to use one. The logical end of tying down budgets this way will be a world where all big libraries have the same, homogenous e-book collection, composed of the same limited number of big packages, from the same limited number of big publishers. Not a great scenario if you care about universities. On the plus side though, it’s a pretty efficient way to run a library.

But the access model it eventually adopts could point the way to a very unfriendly future for all e-book consumers, especially those who value genuine ownership of books.

Toward the downside?

In my last post I told how academic libraries have found themselves with large collections of e-books that, since they cannot be viewed on e-readers and smart phones, remain largely unread.

Now used for searching rather than reading, these e-book collections stand to be made redundant by Google’s more familiar interface and brand.

But as some of the astute commenters on the post immediately pointed out, the next generation of tablet/slate devices, should they contain technology that allows the screen to mimic e-paper (a la Pixel Qi), will certainly bring these e-book collections back to life.

If this method of delivering e-books works for scholarly publishers, it can also work for trade publishers and it may come with a significant downside for the consumer.

Downloadable or flowable?

What is important in this is not the tablet technology so much as the way publishers will be providing content for them. Will it be through downloadable e-books of the kind consumers are beginning to buy in such large numbers? Or will it be as “flowable” HTML of the kind academic libraries currently provide (that is, e-books that are streamed from a server that you must be constantly connected to in order to view)?

Downloadable ebooks work on e-readers and smart phones. Flowable e-books work on pc’s and any device that can maintain a constant connection to the web, including and especially the coming tablet pc’s. Downloadable e-books make the reading device key to the reading experience (how well can you search, annotate etc.). For flowable e-books the reading platform performs this function (think Stanza, or in the case of academic libraries, ebrary).

Naturally the next generation of mobile devices won’t be tied to flowable e-books in that you’ll still be able to download e-books on them. But I’m betting trade publishers are going to start to see what the big academic publishers presumably have already—that flowable e-books have a much greater profit potential because they allow for much greater control.

Gatekeepers and DRM

Contrary to popular belief, DRM isn’t just something stuck to downloadable e-books—vendors of reading platforms love it too. In fact, flowable ebooks and DRM were made for each other. As any undergraduate who’s tried to print extensive sections of their library’s e-books will tell you, DRM can be built into the platform to control what the reader does with the content. This technology empowers the platform vendor, potentially allowing them to charge readers for certain basic functions like printing, copying text or even just taking notes. This isn’t to say that this kind of DRM can’t be hacked somehow. But it can be very effective and annoying, and not particularly sophisticated. On more than one occasion I’ve been asked to intervene with a publisher on behalf of a student or class because the DRM has inexplicably blocked them from viewing the text.

More to the point, the platform becomes the gatekeeper. Access to the text is password protected (or in the case of academic libraries, gated by IP address). Since the e-book is not downloaded to your device, access can be shut off at any time. And you can’t file share a flowable ebook. Although you can share passwords, these too can be easily blocked if it’s determined the user has violated the license (by accessing from another IP address, for example).

This kind of DRM would make a database like Google Books a gold mine for publishers who end up selling their e-books as flowable content only, not ePub files to be downloaded to an e-reader. Creative publishers could start charging micropayments for rentals (say 50 cents for a day’s use). A convenient, smooth rental system might even persuade consumers away from the idea of owning e-books altogether. This may seem far-fetched, but academic librarians have been talking about the virtues of what they call “access over ownership” for years. Ironically, though, in an e-book rental scenario, it would be libraries that end up going the way of the music industry, not publishers.

The Other DRM

The DRM welded to downloaded e-book files seems positively benign to me in comparison. OK, perhaps not benign, but it at least seems to level the playing field a little more between reader and content provider. As long as the file is on your device and the DRM doesn’t screw up (a big “if,” I know), it’s yours, not the provider’s. Of course Kindle owners have reason to doubt this, but given the amount of competition for devices consumers can now make a different choice. They can go for a device that allows you to archive your e-book in a place beyond the provider’s reach.

Will the flowable e-book scenario actually happen? As movie fortune tellers always caution, this is just one possible future. As long as consumers demand ownership of the e-books they purchase, including the right to archive, it won’t. But as the next generation of mobile devices emerge, and as Google Books develops, consumers of e-books should beware: access will always leave you vulnerable; ownership has the best potential for giving you security.

As for academic libraries, they may finally get the value out of their e-book collections that they paid for, but the Digital Industrial Complex keeps rolling on. Only a resurgent Open Access movement and a new, more skeptical generation of library administrators will be able to stop it and ensure that libraries, as the immortal Bob and Doug McKenzie might put it, never get hosed like that again.

Bio: Dan D’Agostino is collections development director at a large research library.

Over the past several years, university libraries have collectively built very large and very expensive collections of e-books that nobody reads.  These collections, often including the very best and highest demand academic titles, not only remain unread but may in format already be obsolete. They may never be read.

Instead of focusing on books downloadable to e-readers or smart phones, academic libraries have created enormous databases of e-books that students and faculty members can be read only on computer screens. The result, as shown by studies like the JISC national ebooks observatory project, is that these collections are used almost exclusively for searching for information—scanning rather than reading.

With a vigorous, searchable Google Books on the horizon, could academic libraries suddenly find themselves and their e-book collections completely bypassed by their students and faculty? The New Year finds both academic libraries and the big commercial publishers that serve the academic community in a state of paralysis, on the one hand knowing that their onscreen e-books are not reaching potential readers and on the other unable to embrace the exploding popularity of e-readers and smart phones as platforms for their content.

How did it come to this? In order to explain it’s first necessary to understand that the world of academic publishing and academic libraries, probably the single biggest sector of the current e-book market, is a strange parallel universe in relation to the rest of the e-book world. And in this strange universe, two fundamental laws currently govern all activities.

The First Law of the Scholarly Publishing Universe

The first law governing the scholarly publishing universe is that scholarly publishers are monopolies. If you’re only familiar with trade publishing this may seem counterintuitive. After all the trade publishing industry is full of publishers competing with one another for the consumer’s limited funds. But in the scholarly publishing universe publishers don’t necessarily provide books or journals that compete with those of other publishers.

Instead, they often feed the university the unique information it must have to stay on the cutting edge of research. For example, not all journals are equal. In order to support research at their universities, academic libraries must subscribe to certain high-status journals. Publishers, knowing that this makes them de facto monopolies are able to inflate the subscription prices for these key journals to astronomical levels (the phenomenon often referred to as the Serials Crisis.

The Second Law of the Scholarly Publishing Universe

The second law of the scholarly publishing universe might be called “The Library Director’s Law of Irresistible Attraction.” That law goes something like this: digital versions of high status journals are irresistibly attractive to library directors. These directors know that making them available to their students and faculty keeps everyone happy with the library, in turn securing both the library’s budget and the director’s future.

The two laws working together have meant that the big commercial scholarly publishers like Reed Elsevier and Springer Verlag have been in the unique position of forcing libraries to subscribe to packages containing all their e-journals. In other words, we’ll sell you the few you really need, but only if you take the thousands we publish that you don’t need. Since library directors had to have those few key journals, they agreed to take the whole deal.

Ebooks and the Digital Industrial Complex

Thus a symbiotic relationship was created between academic libraries and the big publishers, what I like to call the Digital Industrial Complex. Given their constant state of insecurity, libraries began buying as many digital resources as possible, regardless of quality or demand (and as we’ll see with e-books, format).

For their part, publishers were only too willing to provide new digital products for academic libraries to buy, again, without any understanding of the actual demand for them (and in a sense, they didn’t need to know whether or not students and faculty wanted these products since they knew that libraries would buy them anyway). And so, having secured, apparently in perpetuity, subscriptions to their entire ejournal lists from academic libraries, publishers began to work on the next frontier, e-books.

A few years ago publishers began offering packages of e-books to academic libraries. Since logic dictated that any library director worth his or her salt must be able to show their university presidents that they already possessed large collections of the Next Big Digital Thing, they were quite happy to buy these ebooks in large packages (those who hesitated risked “luddite status” and perhaps their jobs). Again, not buying the individual titles the university would actually need, but buying everything the publisher offered.

The publishers were offering e-books in the state of the art formats of the day, HTML and PDF. Academic libraries also began investing in very expensive platforms, like ebrary, for mounting these e-books. Publishers, academic libraries, and even the vendors of these platforms were all counting on one thing, that students and faculty would want to read e-books on computer screens—and even if they didn’t, well, that was the only technology available, so readers would simply have to adapt. But then readers had a choice.

Ereaders and Mobile Devices

Just as studies were beginning to show that readers will not read extended pieces of text on computer screens and would use these e-book collections simply for searching, not reading, the Kindle and the iPhone arrived. These devices have shown that dedicated e-readers and smart phones are e-book platforms par excellence; they make e-books work. But unfortunately for academic libraries they don’t work with the huge e-book collections they’ve amassed in HTML and PDF (at least not very well).

The result being that as the ownership of e-readers and mobiles begins to increase across campuses, the library’s e-book collection is in danger of becoming a very expensive white elephant, underused at best and perhaps already obsolete. For their part publishers are not rushing forward to convert these e-books to ePub so that they can be read on e-readers.

As one rep for a major publisher told me in December, their company is split internally over the risks involved in allowing their content to be easily read on e-readers. And so for the time being they have no plans to either retro-convert the ebook collections already held by libraries to Epub, or to start providing Epub for new titles.

In the end though, there may be a couple of ways to bring these ebooks into the 21st century and make them as popular on universities as ejournals have been. And one solution, in an acronym, is DRM…

To be continued…