(l-r) Brian Downing, CEO of Library Ideas; Steve Potash, president and CEO of OverDrive; Rich Freese, president and CEO of Recorded Books; Jeff Jankowski, VP and co-owner of Midwest Tape; George Coe, president and CEO of Baker & Taylor; Matt Tempelis, global business manager for 3M Library Systems; and Rebecca T. Miller editorial director for Library Journal and School Library Journal.

When ebooks or other digital materials are not readily available in libraries, publishers “are missing a key conduit to a market that [they] can’t tap any other way,” Rebecca T. Miller, editorial director for Library Journal and School Library Journal, stated in her opening remarks for the “The Untapped Retail Channel: Public Libraries” panel on Friday, May 30 at the 2014 BookExpo America (BEA) conference in New York. Leaders from top library companies weighed in on this issue during an hour-long discussion held before a gathering of publishers, booksellers, and librarians, aiming to debunk lingering misunderstandings about ways in which libraries affect retail sales of ebooks and digital content, and to inform publishers of new tools that have been developed to market, manage, and even sell digital content through libraries.

Miller, as moderator, was joined on the panel by George Coe, president and CEO of Baker & Taylor; Brian Downing, CEO of Library Ideas; Rich Freese, president and CEO of Recorded Books; Jeff Jankowski, vice president and co-owner of Midwest Tape; Steve Potash, president and CEO of OverDrive; and Matt Tempelis, global business manager for 3M Library Systems.

Citing data from LJ’s Patron Profiles research, published from 2011-2013, and LJ’s annual materials survey, Miller opened the session by explaining that libraries spent more than $1.11 billion on books in all formats in 2013. However, she argued, libraries have a more significant impact on publishers than even that sizeable figure would indicate, because library use results in consumer purchases. Public libraries now outnumber retail bookstores by two to one in the United States, and are fast becoming the only in-person book browsing option for the residents of many communities. Librarians know their communities and can play a key role in marketing books and authors via recommendations and merchandising. And, perhaps most importantly to publishers, regular library users read an average of 29 books per year, compared with 11 books per year for non-library users. They also buy more books and media each year than non-library users, including books and other content that they initially discovered at their library.

Libraries everywhere

“There is a library in every town in North America. Every town,” Jankowski said. “As retailers are shrinking, libraries are still strong and thriving in their communities. [Librarians] are talking with readers all the time… They recommend books, and often they show you how to use the tablets, ereaders, and services” necessary to access ebooks and other digital content as well.

Their relationships with their communities make librarians informed allies who can help publishers market content at the local level, Jankowski said. But libraries need access to content to market it. It is counterproductive to restrict library licenses, or refuse to license content to libraries at all. Libraries offer “a great opportunity to go directly to your readers, especially if you get rid of some of the artificial limitations in the public market.”

Librarians know Jankowski’s company, Midwest Tape, as a long-time distributor of DVDs, CDs, audiobooks, and other media. Last year, Midwest Tape branched out into the field of streaming media with the launch of hoopla, a pay-per-circ platform that enables libraries to offer patrons access to streaming movies, TV shows, audiobooks, music, and soon, ebooks, for $0.99 to $2.99 per checkout.

Library Ideas also offers unlimited, simultaneous use of ebooks, downloadable music, streaming media, and language learning programs via its Freegal Music, Freegal Movies and Television, Rocket Languages, and Freading Ebook platforms.

Libraries are working to adapt as streaming services and ebooks become more popular, Downing said. “They’re always cognizant of the fact that anyone who walks into the library might the following day get a new iPad and might come to the library a lot less after that. So they market ebooks within the library.”

Broader digital literacy efforts also help introduce people to tablets and other devices, expanding a publisher’s potential audience for digital content, he added.

“Many libraries are offering devices to loan,” Downing said. Unfamiliarity with tablets, ereaders, and other devices is an “impediment to people migrating to the digital age. Maybe they haven’t tried out a device, maybe they’re intimidated by it. If they can borrow it from the library for free, they’re more apt to pay for it on their own.”

Friction fiction

Publishers that are reluctant or unwilling to license ebooks and other digital content to libraries have expressed concern about the lack of “friction” in digital transactions. Visiting a library to borrow a print book or DVD takes time. If a library makes it easy for patrons to borrow an ebook or stream a movie at home, the friction argument goes, they will be much less likely to pay for digital content in the future.

With streaming services such as hoopla and Freegal Movies and Television, this is a moot point, since publishers are paid for this content on a per circ or subscription basis. And some publishers seem to have lingering misconceptions regarding long-term and perpetual licenses, noted Freese. The one-ebook/audiobook, one-user lending model regularly results in holds lists for popular content. If readers are eager to check out a new bestseller or read the next book in a popular series, many will opt to make a purchase instead of waiting.

Addressing the publishers in the audience, Freese said, “I would encourage everybody to get a library card and go online to [a library] website and see what kind of friction there is…. When you go in and you try to check out a bestselling title, guess what? It’s probably on hold, and it’s probably on hold with many, many people ahead of you waiting. What do the patrons do? They go buy books.”

Library as retailer

OverDrive, 3M’s Cloud Library, and Baker & Taylor’s Axis 360 platform all offer libraries the option of activating “Buy Now” features for ebooks and other content. This offers a convenience to patrons who encounter such a holds list, while returning a share of net profits from these sales, or credit for future purchases, to the library.

“When a book is not available because it’s circulating and there is a large on-hold [list], we are offering the consumer, the patron, the option to acquire any format that they wish,” Coe explained. “There is a buy button on their online catalog, OPAC as we call it, to allow the library to become a retailer.”

Coe added that simply enabling the option doesn’t lead to immediate sales, but there have been success stories when library systems choose to be proactive with these “buy now” features. “Because you build it, doesn’t mean they come… if it was that easy, we’d all be Amazon. So libraries need to learn how to merchandize and market these services and be a lot more proactive to take advantage of this.”

Aside from libraries brokering sales transactions, publishers should also keep in mind that libraries help patrons discover content, encouraging patrons to try new authors and keeping interest alive in backlist titles, Tempelis said. “Every library patron is also a buyer of content, correct? I think we all agree with that,” he said. “Now, everybody loves the bestsellers. At the same time, [readers] need to be exposed to the long tail, the midlist, the backlist, the genre fiction. Librarians play a key role in doing exactly that. We’ve tried very hard, as I mentioned earlier, to give them that kind of visibility. In our opening-day collection, we made sure that there’s a very strong backlist component to it.”

The 3M Cloud Library offers curated “carts” and “shelves” built around genre fiction, readalikes, and midlist/backlist titles to simplify ebook collection development, Tempelis added.

Noting that OverDrive and other ebook aggregators can enable publishers to work with libraries using a variety of licensing terms, and that major publishers that have begun working with libraries have discovered “that the sky isn’t falling,” Potash called for hesitant publishers to test the market.

“Publishers, if you make your books available under as many models as you can support, you’ll have many more customers, and you’ll have much higher top line revenue,” Potash said. “We support simultaneous access to individual title by collection, one-book/one-user, Harper 26 [loan cap], Macmillan 52 [loan cap], Penguin/Simon [and Schuster] one year [license]. I don’t really care. We’re providing a marketplace. We want publishers to offer the best value, and then the best deals and authors—and the marketplace will work.”