School Library Ebook Business Models

Posted Tuesday, June 10, 2014 - 15:29
Creating licensing partnerships that work
School libraries have more market power to influence ebook availability, pricing, and contract terms than public libraries

Much attention has been paid to library lending, the availability of ebook titles that public libraries can purchase, and the business models associated with ebook acquisition. When we consider school libraries and ebooks, we discover a very different situation—greater access to the ebooks that school libraries collect, a greater variety of business models, and a library/publisher relationship that is more congenial.

Public libraries, for the most part, collect trade books—nonfiction and fiction bestsellers and other titles with broad appeal—but the dollars they spend account for only a relatively small portion of the total trade market. Although school libraries still desire and purchase trade books, the bulk of the collections budget is allocated to K–12 educational materials, making school libraries the large majority of buyers for K–12 educational resources. Consequently, school libraries have more market power to influence ebook availability, pricing, and contract terms than public libraries.

In addition, K–12 ebook publishers generally are not huge subsidiaries of international multiconglomerates—as are many trade publishers, such as Random

House or Hachette Book Group—with the resources available to deemphasize the public library market if desired. Rather, they are small, often independent businesses that work closely with their school library customers in order to survive. This is not to say all is dandy in the school library market. Increasing numbers of K–12 publishers have “sell-direct-to-parent” business models that compete for many of the same resources that libraries ordinarily acquire, taking advantage of the growing home-schooling trend. K–12 ebook publishers also sell resources to schoolteachers, bypassing “library central,” where cooperative buying and discounts keep prices down. Still, many of these publishers have been selling resources exclusively to schools and school libraries for years. Thus, a collaborative approach to acquiring digital materials has been less contentious and has resulted in a variety of mutually beneficial business models.

It is much more common, for example, to find resources licensed for unlimited simultaneous access from K–12 publishers. These publishers have also been more active in developing their own platforms, though there are some intermediaries who provide aggregator platforms, such as 3M, and are willing to work with school libraries. This section will review five different business models: unlimited simultaneous access, one-to-one licenses, pay-per-use rentals, subscription services, and online retailer platform models.

Unlimited simultaneous access

The most common business model for ebooks in school libraries, at least in terms of informational texts aligned with classroom instructional needs, is an unlimited simultaneous access license. As you might expect from its name, content is made available for use by an unlimited number of simultaneous readers within a school or school district. This makes it easy for a teacher to use an ebook with a whole class of students in a computer lab, mobile laptop cart, or handheld-device setting. The licenses often include home access to the resources as well.

This type of license tends to be priced per site—usually defined as a school building, though in some cases a single building can contain multiple schools. This pricing structure can lead to inequity for smaller schools with smaller budgets as they end up paying the same price as larger schools while having a lower potential for use. However, some publishers are offering district-level pricing for all schools in a district, thus providing access to materials for all students at a single, reasonable price. When selecting a simultaneous access model, much will depend on the schools’ organizational structure and how their operations are governed. EBSCO is a vendor that offers this model. Some options allow the library to retain copies as long as an account is maintained.

One-to-one licenses

Fiction in school libraries, as in public libraries, is more likely to be licensed on a one-to-one basis so that each ebook is limited to a single reader. Access is typically enforced through digital rights management (DRM) and the checkout process. This model is more likely to be encountered when ebooks are delivered through an aggregator or third-party host, such as OverDrive. At this time in the one-to-one market, intermediaries provide a service (maintenance and the application of DRM) that individual publishers cannot provide because of a lack of resources and expertise. This suggests that a possible reason for the prevalence of the unlimited simultaneous access business model (above) may be dependent on the difficulty and expense of maintaining and applying DRM in the one-to-one model.

To reflect the needs of classrooms, some content is licensed under a modified one-to-x model, where a single book purchase allows three, five, or some other number of concurrent users. The three-user model seems to dominate, though many schools often look for and negotiate seven copies to accommodate five or six students and a teacher in a reading group. In other cases, publishers will list two versions of ebooks with an aggregator: single-user and multiuser. The multiuser version is often sold as an unlimited-access site license for three to five times the cost of the single-user price. This again suggests a more liberal and open approach, recognizing that the cost in time, effort, and money of restricting access can often outweigh the benefits to a publisher as well as efforts to accommodate various needs.

Pay-per-use rentals

An emerging business model is built around a pay-per-use rental of an ebook for a set price per checkout. School libraries establish an account that is then debited a set amount ($1 is common) every time a student reads a book. Students tend to be limited to a set number of simultaneous checkouts and may be restricted to an annual checkout limit to control costs. An example is Brain Hive, where a library joins as a member with no upfront fee. Libraries pay only the $1-per-use amount for the content over a particular period of time (school semester, annually, etc.).

Libraries can buy some of the content permanently, with a pricing structure in part determined by how many uses have already been made. This model has been successful in bringing some titles, particularly nonfiction, from the Big Five trade publishers into school libraries, though access to fiction titles has been limited so far.

Compared with the high prices for ebooks from some trade publishers, this model can provide significant savings. Leaving aside platform costs (if they are charged), an $84 single-user ebook only breaks even versus a $1 rental after almost three-and-a-half years of two-week loans. Pay-per-use can also be a cost-effective way for librarians and students to explore some of the fiction offerings from independent publishers. These models may also offer extras like reading comprehension exams, bookmarking, and note-taking. An additional fee is charged for some of these services.

From a technical standpoint, the primary example of this model currently requires an always-on internet connection to maintain secure access from outside the school. The loan period can be set by the library, though there is no price discount or other benefit to selecting a shorter loan period at this time. Readers are allowed to read up to 25% of a book before a paid checkout is charged.

Subscription services

The smaller, independent publishers that provide resources for school libraries have developed another model for an annual subscription to a large list of ebooks. In this way, ebooks are being treated much more like a subscription database service, a business model with which schools and school libraries are very familiar. The subscriptions usually offer unlimited simultaneous access to a defined set of ebooks for a single year for a flat fee. Each year, a new and different set of ebooks is available through subscription. TumbleBooks, McGraw-Hill Professional, and Storia from Scholastic are examples of this model.

The benefit of this model is that it allows instant delivery of a larger set of books as compared with the slow development of a set of perpetually licensed books. In essence, the library is amortizing its collection development costs but with the associated risk of losing access to a large chunk of content in the case of budget cuts. At the same time, though, the subscription model suggests that the titles are being updated and refreshed annually, so this can be a way to avoid the issue of weeding digital titles.

All the models above are designed to work on desktops, laptops, and notebooks. Some subscribed book collections, also ready-made packages, are aligned to Common Core State Standards or the curriculum, such as Rosen Classroom and Britannica Digital Learning, popular with homeschool users.

Online retailer platform models

School libraries have an option for accessing content from the Big Five publishers that is not currently available to public libraries. The three major online bookseller/

ebook reader platforms have each developed education business models that school libraries can use. The offerings from Amazon, Apple, and Barnes & Noble are very distinct and serve different usage models. Most of the differences can be attributed to the DRM employed by each online retailer. In all cases, ebooks are licensed under a consumer model with one-to-one access and none of the publisher restrictions that public libraries endure.

Amazon

The Amazon education platform, Whispercast, is built around accounts and attached devices. Books are licensed for use by a named account designated by an email address. This is presumably a student or staff email, though generic accounts can be created as well. A serial-number-designated device owned by the school is then attached to an account, thereby granting access to the content on a device. Devices can be moved between accounts to allow different content on a specific device. To replicate a library lending model, however, a school would need to create an account for each book purchased to allow flexible delivery to any device. Even though publishers like Macmillan and Random House offer trade publications suitable for K–12 education, Whispercast is preferred and often used instead because of its efficiency and scope.

Apple

The DRM used by Apple is the most open in terms of trusting the school to appropriately deliver content from up to five authorized computers to school-owned devices. This means that iBooks has the most flexible access of the three models and is the only one that can really replicate print lending in a library.

Barnes & Noble

The Nook education platform provides a high level of support for class sets, reading groups, book clubs, and other situations where a single (or set) of books is going to be read by a defined group of readers. Under this program, Nooks are placed into groups and then content is purchased (one-to-one copies) for each Nook in the group.

Conclusion

Although school libraries face many of the same issues that public libraries do with trade publishers, school librarians have many options, especially relating to K–12 nonfiction publishers. These publishers have opened their business models to create partnerships with their primary customers by offering attractive options that benefit a school’s instructional needs. One reason why nonfiction publishers are more willing to work with the education market is in part because of their mission to support the informational text needs of the classroom; however, what may drive this even more is the nature of nonfiction text. These types of resources need to be updated more frequently through weeding. These same publishers are very aware of the needs of the K–12 audience, and they are leaders in creating new formats that allow students to interact with content. Multimedia and content-creation tools are innovative methods for turning flat text into content-rich experiences—including education applications, scenarios, and rich media. These allow students to interact with text in ways that cannot be done with traditional print or flat digital editions. It is this type of innovation that takes texts to the next level and creates an exciting time for our readers.

CHRISTOPHER HARRIS is director of the School Library System,Genesee Valley (N.Y.) Educational Partnership. RIC HASENYAGER is director of library services, New York City Department of Education. CARRIE RUSSELL is director of ALA’s Program on Public Access to Information.

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