Close the Libraries and Buy Everyone an Amazon Subscription. It's partly tongue in cheek, partly serious. Regardless, the math is not that good, but it is something some folks will begin thinking.
I could write nothing about this or I could write I book. I don't have the time to write a book (but Jibo could do it for me):
Looks like Amazon is closer to launching it's book subscription service. For $10/month patrons can have immediate access to over 600k titles. The first thing I looked at was the comments section for the article to see how many people would sign up. Then I looked for titles.
Based on those criteria I would say the service has at least even odds for success. Amazon has big name titles libraries don't have, and there is no wait. Based on those unique added value it is easy to see how many of our patrons would simply pay the $10 a month. Moreover, when one factors in the high cost of driving to the library $10 seems more attractive. I was out in California recently where gas was close to $5/gallon in some places and traffic is so bad it can take an hour to get anywhere. I would be tempted to make this trade off.
I was never a serious enough gamer as a kid to even even think that I wanted to be a "professional" gamer when I grew up, but that was because in the 90s, such an idea was ludicrous- even to my most avid gamer friends. We all knew that there was no way anyone would ever pay you money to do this stuff. Right?! That goofy Fred Savage movie was just Hollywood dreaming. As impossible as Disney fairy tales, and as much of a let down when you finally realized that there was no way you make rocks levitate using the "Force".
But the top 8 game tournaments have now reached over a million dollars in prizes with the biggest pulling almost 3 million dollars. I have known a few professional gamers as students and friends and remember the cognitive dissonance they would experience when I informed them that they were already making more money than most of their professors and certainly almost all my librarians. The inevitable, "Why I am going to college then?" always popped up.
What is amazing is that the pros I knew/know were making anywhere from 40-80k/year, and they are not the ones playing in the million dollar tournaments on the list I linked to, which would indicate that the market is quite healthy for making a living "gaming". For example, I knew talented students who quit jobs to simply power up characters in World of Warcraft or unlock/attain various other items/achievements in other MMOs because after I helped them do the calculations they realized that their per hour income selling characters on ebay was so much higher than any other part-time work (usually around $18/hr).
It is also amazing because it could seem to contradict my belief that digitization of goods and services commodifies them. But that is because gaming companies have figured out ways to counteract the commodification effect. Only truly hardcore gamers can attain these feats in a "reasonable" amount of time, but there are millions more gamers who want those achievements and are willing to pay for them rather than put in the time.
The question is how do libraries create value that has similar demand? I have argued elsewhere that our one book per user model is outmoded in the digital arena, as users instinctively know that every book can be replicated immediately. We do know that a small percentage of our patrons are willing to wait on a digital hold list for an item, but how long will that last and will it transfer to new generations of library users? Unfortunately, the gaming example above seems to indicate that while artificial scarcity can be created in the digital economy all that scarcity does it encourage the base population to spend money to alleviate that scarcity. If gamers are willing to buy a character or achievement rather than wait, it seems logical to assume that those potential library patrons will also buy the book rather than wait for it.
Perhaps this is a bad analogue for libraries, as games have an inherent competition that does not exist with reading. But as I mused through my surprise at how much money game competitions are generating, I couldn't help but make the comparison.
A recent New York Times piece by Tony Horowitz on his bad experience with digital publishing has garnered quite a bit of attention, but the story doesn't end there. Nate Hoffelder of the Digital Reader has a different take. Plus, as I like to note we are still in the developmental stages of a "digital" market. It is impossible to assume that what it is now is what it will be in a few years.
The Author's Guild has lost its lawsuit against Hathi trust. The Second Court of Appeals (mostly) upheld the initial ruling. While the Author's Guild may try to appeal, it would appear to be an extremely foolish move at this point. Ironically, it seems that the Author's Guild is actually helping libraries by pursuing poorly considered lawsuits with too many weaknesses. I am a slow reader when it comes to legal stuff, which is why it has taken me more than a week to post on this, but the gist of the judgement is that the Guild really went too far in their accusations.
In doing so, they may inadvertently create legal precedent for broader and more inclusive digitization. This seems to be the real take away for libraries. Mass digitization is legal- under certain limitations. What is interesting is the the judge's written opinion did not address Fair Use, which may have been an attempt to consciously keep the lid on that particular can of worms.
You can read the judgement here.
Ed Bott has posted a fascinating court document that emerged from the Apple/Samsung trademark battle that just ended. It contains the last directive/plan from Steve Jobs. It is fascinating and full of insight. On a personal level I was deeply pleased that it confirmed my own analogous rendition of Apple's business model as that of the fictitious Alien xenomorphs in the science fiction franchise of the same name. For those of you unfamiliar with the mythology of Alien it revolves around a race of parasitic, xenomorph aliens that simply colonize all species around them by violently implanting other species. The implant kills the host as it is "born" and emerges as a xenomorph with physical characteristics of the original host. They xenomorphs are also a "hive mind" species, which means that they are basically like ants. The millions of drones only exist to serve the queen, which is why I developed the (protected by Fair Use) graphic above, as I have always felt that Apple is exactly like the Alien species. Regardless of the user base, they expect all users to adapt to their model and lock them into their ecosystem, the more mindless the better.
I say this as an Apple user and a fan of both their hardware and tech. But I have always been frustrated by their lack of openness and interoperability. There are good design and functionality excuses, but the document Bott posted really gets to the heart of Jobs vision:
Jobs understood that it was profit driven. He had a vision for long-term profit and sustainability driving his choices to keep Apple as closed and locked down as possible. He knew that innovation and quality alone were not enough to stay competitive. He wanted customers locked into Apple's ecosystem. Further proof that a high level war over control of the information ecosystem is happening all around us.
Speaking of war and information ecology there is another amazing statement in the emails that is sure to go viral:
This one made me smile. In my courses, writing, and speaking I have always presented the legal situation as an all out battle between old dominant species like Hollywood and Publishers and new dominant species like Apple, Google, and Amazon. Botts (rightly in my opinion) identifies this as the main reason Apple was fighting with Samsung. It was less about Samsung's hardware and trademark infringements, and more about Android threatening Apple's extremely lucrative dominance of the mobile iOS market. Android is the biggest threat to Job's long standing game plan of locked in consumers. In essence, Apple's lawsuit(s) against Samsung were actually proxy battles with Google.
What relevance does this have for librarians? Not much, because as a competitive species in the information ecosystem we barely register on the edge of these apex predators. Publishers and Hollywood don't like us, because we may cost them a few million dollars in revenue each year, but even they are more interested in the bigger threats. The problem for us is that no matter who wins we lose, because they all want what Jobs explicitly identified: complete control. It's an old story, monopolize the market and increase profit through control rather than building a better and more desirable widget. But librarians can carve out a nice niche in the ecosystem if we act before the battle is over. Mid-level content producers have been left out in the cold with no market and little support. We just have to develop a workable model. More on this over the next few years.
When I first got my hands on the SDK kit for iOS, I did two things. First, I developed an app that became proof of concept for the Douglas County eBook ownership model. But the other thing I worked on is far less known and successful- although it's long term implications are just as serious for libraries. I worked on developing an app for early literacy that adapted itself to an individual child's lexile (reading ability). Imagine a picture book aimed at 4-7 year olds that was the same story, but with different text that adapted to the child's reading ability. As the child interacted with the book and accurately identified the text, it would use slightly more complex text for the next page and so on until negative feedback indicated the vocabulary and literacy demands had reached an adequately challenging level to keep the child engaged and learning without frustrating him or her.
In my mind, the feasibility of such an app would only increase the already overwhelming social and cultural expectations that books need to go digital. While I think that this rush to digitize is not being approached in a systematic and thoughtful way, I also felt that there was no way to really offset the massive social pressure to go digital, and maybe I could help offset the dangers and losses that would happen by blindly pursuing digitization. Well, this study from Japan has added some scholarly weight to the idea that digitization offers more than print can. The study used a methodology and goal that had a narrow focus: literacy as measured by interpretation and accurate understanding of words and their meaning. The ebook highlighted the script for each word being read aloud, which resulted in an expected boost in literacy. The control subjects having the same book in print format read by their mothers did not experience the same growth.
Well, that is just great, but as the study notes this is the "first experimental evidence for a positive effect of exposure to digital books upon any aspects of child development." All the other evidence to date is negative. Unfortunately, this will not slow down the general direction of publishing, and will probably be used as more evidence of the superiority of digital to print. Anecdotally, I can add that as the parent of a toddler and a preschooler, my wife and I are the only parents among our peers who filter and limit access to technology for our children. Every other family we know uses the "virtual babysitter" in every imaginable situation. Even waiting in line at the market we see parents handing their child a phone to "keep them busy".
There is no way of really knowing what this is doing to children, but we can acknowledge that it means future generations of library patrons will be radically different from current patrons. Friends' and neighbors' children already note how different our house is from theirs, because there is no TV, and because there are books "everywhere". Ironically, our kids are far more literate in a traditional sense than their peers. Unfortunately, I have no idea whether this is good or bad for them, as I have no idea what kind of skills and "literacy" they will need in 20 years. How should the future library be planned and modeled? I have no idea, I just know that we need to stay nimble, aware, and flexible if we want to serve these future patrons. Because the pressure to digitize is extremely powerful, and as we have seen in the past, technological innovation develops a life of its own and begins to move regardless of the original intent. We are still dealing with the unintended and probably unforeseen ecological damage from industrialization and urbanization. We will probably see similar ecological strain and damage in the information ecosystem.
I have been fairly skeptical of the argument that selling ads is replicating and supplying the revenues lost over CD, DVD sales, etc. The famous "lost decade" of music is the best evidence against this optimistic view of digital content sharing and the hard push to make all content available "free".
But this article is fascinating in that in details how revenue streams can be created that are both significant and economically viable. It appears that record companies are making more money off fan made mash-ups and lip syncs than actual music videos. It's not surprising, because if you have ever made video you know how much time, energy, and effort goes into 3:30 of video. By monetizing the ads on those fan videos and collecting the revenue (since they are the copyright holder) record companies are in fact capitalizing on a new market and revenue stream made possible by digitization and the democratization of tech.
The caveat is that the article is comparing the revenue of music videos, which was never a big part of revenue in the first place. So while this is encouraging it really does not give us any reason to believe that the loss of revenue from direct sales is being regained.
This is why we are seeing more and more book subscription services this year. Publishers are trying to circle the wagons and monetize their catalogs using a Netflix model. The problem is that the market is too fragmented and volatile still. Either way it is not good for librarians, as the digital model for books is moving away from our model of "one book, one patron" towards a streaming, subscription model. In this way a number of things are happening that are not good for libraries:
1. We cannot afford to subscribe to entire catalogs.
2. Our model is being rendered both obsolete and outmoded.
3. The Freegal, Hoopla, Zinio et al model is not sustainable once enough content gets digitized.
We still need a better answer than what is on the table.
While the music industry was the first to go digital, and many of the issues facing it are analogous to publishing there are some unique aspects to it. Those unique aspects come to light in the recent ruling of New York District Judge Denise Cote. The case is very intriguing because it is similar to the problem facing libraries and ebooks. Tech has created new business models and opportunities that stretch existing legal arrangements. For Pandora and the music industry, the issue was one if licensing and royalties.
For those of you that don't know, public playing of music generally falls under ASCAP and BMI. This is the regulatory umbrella that allowed radio stations to exist. The problem was that Sony and some others wanted to withdraw their content from Pandora exclusively:
"Pandora filed the complaint after Sony and others tried to partially pull out of ASCAP in order to deny their digital catalogue to Pandora — a move that would have severely depleted Pandora’s music selection. In a December decision, however, another court ruled that Sony and others had to be “all in or all out” when it came to using ASCAP which, along with BMI, operates under a Justice Department consent decree that requires them to issue licenses to all radio providers."
In my limited understanding of our legal system, the above ruling was the right one, as allowing Sony and others to make a exception to the existing system would have disastrous implications elsewhere. How would soundtracks be licensed, and how would those contracts be stable if Sony were allowed to unilaterally withdraw from ASCAL and BMI? Well, more advantageously- for the license holder. Spotify is not covered by ASCAP, because of its uniquely customizable approach. This is where things get complicated really fast. The main thing to note is that Spotify is considered "cannibalistic" because of its customization, hence, Spotify does not use an ASCAP license.
Along comes Judge Cote to solidify the distinction between Pandora and Spotify arguing that Pandora, while utilizing an algorithm instead of a DJ, is still more like traditional radio than Spotify. This makes sense, because Pandora users approximate the traditional radio experience of picking a station of their choosing, but the "station" picks all of the music from that point on. Yes, the station can be personalized with likes and dislikes, but the user still does not have complete control of the content.
So Judge Cote's ruling is probably technically accurate. Whether or not Pandora is "good" or "ethical" remains to be seen, but the ruling seems sound. eBooks are another problem entirely, as there is not ASCAP or BMI whereby libraries and vendors can go and find expected and regulated prices for items. Instead, we have even more insecurity in the market, and the law is even more nebulous. First Sale does not apply to econcent, so we have less predictably than the highly volatile legal environment we are seeing in the music industry. What is clear, is that libraries are more analogous to Spotify than Pandora. Meaning, we develop the collection, but let the users pick what they read and use. If a judge were to make this comparison, we could reasonably expect to see higher costs rather than lower, as we would fall under that cannibalistic description.
Now of course we will, and have, always argued that we do not hurt the book market, but as I have noted numerous times, that was in a market where books were not commodities. In spite of last year's PEW findings that ebook lenders are also buyers, we cannot assume that those old patterns will hold true. Judges and legislators will most likely look at the music industry, and not one PEW survey, where they will see undeniable evidence that digitization has indeed cannibalized profits and extrapolate that ebooks in libraries will most likely do the same. Judges will also look at Netflix, which is even more similar to the library model than Spotify. Because Netflix is video (we have now looked at all 3 major econtent formats), because Netflix does not have third party adds and third party integration is minimal (Facebook etc).
What is interesting is that all three of the content competitors we are looking at have become giants in less than a decade, but we still do a couple of things better than they do: metadata, search, and discovery. They do content, availability and price better. The ultimate wild card will be how legislation will evolve to address the cannibalization and commodification effects of digitization. This will make or break libraries. I was talking to Eli Nieberger this week about the monetization aspect of all this, and found it encouraging that both of us had come to the conclusion that the regionalized approach libraries have always used may actually work better for some content creators than Pandora or Spotify- if we can get enough of our colleagues to accept our model. Currently, I am not prepared to discuss that model, as both of us are still developing it. But we hope to have something done in the next two years.