The topic of ebooks and libraries has a thousand faces and its implications are variously technical, practical, cultural and philosophical. Because I have only 20 minutes to give this presentation, I will confine my comment to a few general ideas. This morning I will make a few brief comments in two general areas:

1. The Nature of The Changes Occurring With Books

2. The Affect of These Changes on The Viability of Small Public Libraries

 

HOW BOOKS ARE CHANGING

When I read articles by John Updike or Roger Ebert lamenting the loss of the printed book and extolling its aesthetic and emotional virtues, I cannot help but get the image of two pugilists going at it--one strong but young and brash, the other skilled but past his prime and becoming weak. Will the upstart ebook defeat the wise old printed book? I have also read innumerable articles in newspapers and magazines describing ebooks and trumpeting their advantages. They remind me of that famous series of images showing a creature walking from left to right as he is gradually transformed from an ape into a modern human. Is the printed book gradually evolving into an electronic book before our very eyes? While this latter image of evolution may be more realistic than the image of two boxers dueling it out, I believe that both of them are very incomplete analogies of what is happening to books and reading.

Books as physical items are just one part of a very large and complex system involving writing, publishing, distribution and reading. Every aspect of this system has been gradually changing for many years. The ebook as object is just one part of this change. A more apt analogy than the two I just described might be of a city that is constantly growing and evolving. A growing city offers many kinds of environments in which to live and work. The system that produces books is also evolving to offer an increasing number of options for reading. Printed books and ebooks, each with many variations of form, will be produced by our evolving book system and used by readers. The important question is not whether ebooks will replace printed books, but rather, what is happening to our book system as a whole?

Most writers now submit their manuscripts electronically, and publishers now store them electronically. Even if most books are still printed, distributed to retail outlets, and bought and read by readers in their printed form, the electronic copy of the book is becoming its most fundamental form. The fact that increasing numbers of books are now being distributed electronically before being printed, as well as being sold or leased to readers in electronic form as well as in print form, is only the culmination of a long and gradual trend. We are entering an era in which obtaining books in electronic form will be a common alternative to obtaining them in printed form. Certainly there will continue to be many illustrated books whose color illustrations will not transfer well to an ebook display due the limits of electronic display technology--but those limits will be gradually overcome as technology progresses.

CONVERGENCE

If there is one word that expresses the essence of how the digitization of literature is affecting books, that word is convergence. Old categories of literature based on format are breaking down. We have invented a new word--multimedia--to express this blending of categories that amalgamates sound, moving images and text, but this new category does not really indicate the profundity of the convergence beginning to take place.

Two things will converge with respect to books as they begin to be distributed and read digitally. The first is that separate books will tend to converge with each other. Full text searching, like bibliographic searching, will occur by collection, rather than by the individual work. Books will fracture and in many cases will cease to be separate entities. My guess is that ebooks will begin to look more and more like Web sites. Some will consist of just a few ìpages.î Other will consist of many pages. And some will consist of bits and pieces cobbled together from other ìbooksî or Web sites. Designing your own monograph from many disparate information sources will become common. The distinction between an ìebookî that is newly created by an author and an ìebookî that is a recombination of already existing segments found on the Web will also begin to blur as the categories of how books are created also begin to merge and blend with each other. These are long term changes, of course, but the emerging trends are evident today.

The second convergence that will take place is that between books and other formats such as periodical articles and recordings. The distinctions between monographs and serials are breaking down. The title of a journal within which an article is found gains significance only from what it indicates about the source and authoritativeness of the article, but as other ways of indicating this kind of information come into use, the periodical as a unique format will loose much of its reason for existing. In retrospect, I think we will come to see that serials and monographs were often not totally separate entities and that their convergence started long before digitization. The trend toward their convergence, however, will accelerate with the digitization of monographs.

THE VIABILITY OF SMALL PUBLIC LIBRARIES

I could not even begin to mention all the ways libraries are being affected by ebooks, and many of you could, I am sure, speak more knowledgeably than I about many of those changes. This morning I will limit my remarks about their effects to one aspect of ebooks--the economics of producing ebooks and selling access to them, and how the economics of ebook distribution can affect the viability of small public libraries.

Letís first briefly review the affect that the digitization of journal articles has had on public libraries. Access to online journal articles has substantially increased the ability of small libraries to provide fast access to periodical literature. I work for a library consortium in East Central Illinois--the Lincoln Trail Libraries System. It is a multitype library organization with over 120 member libraries. 38 of our public libraries have less than 5000 people living in their service area. 46 libraries have less than 10,000 people. As you can imagine, the budget of these libraries does not allow them to purchase huge quantities of materials. Thanks in large part to a contract that the Illinois State Library has with OCLC for access to a set of databases through FirstSearch, each one of these libraries can now offer their patrons free online access to over 2000 journal titles. A typical small public library might subscribe to 30 or 40 print journal titles. Illinois is just one of many states around the country that have provided full text access to journal articles on a statewide level. The primary beneficiaries of these statewide contracts are patrons of small and medium sized libraries who would not otherwise have had access to the range of periodical literature provided by these services.

What makes statewide and consortial contracts so appealing to both libraries and information providers is that the cost of providing access to libraries depends more on how many patrons access the information than it does on the number of libraries that purchase a subscription. All electronic information, not just periodicals, have this same cost characteristic. While it may cost quite a few dollars to print and distribute another 36 volume encyclopedia to another library customer, it probably costs only pennies, if that, to provide another library customer with Internet access to a Web site that contains the same information as the 36 volume encyclopedia. In fact, the marginal cost for accessing an online ebook is in direct relation to how many people will access it simultaneously, not on how many people have the right to access it. The fact that ebooks are being leased rather than sold also fosters low per-user costs, because leases generate income year after year, whereas sales of printed books generate income only once.

To sum up, both printed books and ebooks have large initials costs to be recouped, but printed books are sold only once and each physical copy has significant marginal costs. Ebooks on the other hand, can generate revenue year after year and the marginal cost of access is very low. Couple this with the fact that ebooks have the potential to be sold by the collection rather than by the piece, and you have the ingredients of a sea change in the economics of the book.

From the publisher or aggregator point of view, a per-user pricing model takes advantage of the unique aspects of ebook costs and revenue opportunities. From a library point of view, such a pricing model makes it possible for the smallest rural library to offer huge quantities of literature to its patrons for the same per-user cost that the largest public libraries have been able to offer this literature. Today, it is primarily periodicals that are marketed in this way. In time, large numbers of ebooks will also be marketed in this way. Not only will public libraries survive ebooks, small public libraries could potentially thrive as they never have before.

But it is important to remember that this pricing model, which has the potential to substantially mitigate information access inequality for rural and small town library patrons, can only be implemented if purchasing is done on a cooperative basis, regionally or statewide. That is why the title of this program, ìEbooks: Implementation for Library Systems,î is so appropriate.

Some of you, I am sure, are aware of the deal that the OCLC networks put together with Oxford University Press for the Oxford English Dictionary and the American National Biography. That deal was structured so that every size public library pays exactly the same per-user served, regardless of library size. This strategy is one that gives the smallest libraries the equivalent information access opportunities for the OED and the ANB as the largest libraries.

The OCLC networks also offered a discount price for subscriptions to the Grove Dictionary of Art Online, one of the finest reference works produced in the past few years. But this deal was not structured on a per-user served basis. Very small libraries that purchase access can pay over $1 per person served annually, while large public libraries might pay as little as 8 tenths of 1 cent per person served annually. The minimum cost for a public library, no matter how small, was over $800. No Lincoln Trail public library, not even our largest, was prepared to pay what Grove Press was asking. Because I believe that this type of pricing does not serve the best interests of either the publisher or the library, I called Grove Press and talked to a sales person, who put me in touch with the head of Consortia sales. To my surprise and delight, he agreed with me that Grove was missing an opportunity for revenue, just as Lincoln Trailís public libraries were missing a service opportunity. After talking for a while, we structured a deal which could provide each Lincoln Trail public library the opportunity to purchase access to the Grove Dictionary of Art Online for an average of about one cent per person served. I then turned around and offered the service to our member libraries on a sliding scale based on population served. The smallest libraries were charged a minimum of $15 per year. In two weeks we had reached the minimum in commitments necessary to go ahead with the deal.

I believe this kind of arrangement is an example of how all ebooks can be sold to libraries. And I am not talking here just about big ticket reference books like the Grove Dictionary of Art Online. Letís examine the purchase of netLibrary books, for example--or, as they like to call it, ìleasing in perpetuity.î What more fair and rational way to purchase netLibrary ebooks than to establish a shared cooperative collection development fund to which all participating libraries contribute according to a formula based on a per person served basis, on a materials budget basis, or on some other criterion, or combination of criteria, indicating a libraryís ability to pay? Every participating library would then have access to a shared collection of books and would be charged for that access based on ability to pay..

Or consider the way Questia is planning on marketing access to the collection of 50,000 books it expects to provide online access to next year. The newly formed company plans on selling subscriptions to full text access to all 50,000 titles directly to end users on a per-user basis. Regardless of whether you perceive this as a threat or an opportunity for libraries, the one thing it does indicate loud and clear, is that the per-user served basis of pricing is a very attractive one for information providers. Personally, I donít think Questia will be able to maximize their revenue from individual end-user subscriptions, and will eventually come to the realization that using academic and public libraries as intermediaries will increase their revenues and will get them closer to that ìsweet spotî where both net income and the ratio of income to costs is maximized.

CONCLUSION

I believe that in the long run the economics of most electronic information services favor a rough equality of information access. I also think the present problem of the information halves and halve nots is by its nature a short term problem--at least in North America. And although the problem will occur again and again between the introduction of a new technology and the mass marketing of that technology, it will typically not last very long, since the duration of time between the beginning of a new information service and the lowering of its price to extend market share grows ever shorter. To the extent that libraries are well funded, it will be in the interests of information aggregators to gain their revenue from selling to library consortia rather than directly to individual readers, thereby preserving a rough equality of information access. And only through publically funded libraries acting as intermediaries between publishers or distributors and end users will society preserve free access to information, which is the bulwark of a free and healthy society.

So my final words to you today are: don't shy away from purchasing ebooks, but do so on a consortial basis and strive to implement a per-user served pricing model.