Arts Council England Response to the Sieghart Review of Ebook Lending in Libraries

Arts Council England response to the Sieghart Review of eBook lending in libraries

Summary  Arts Council England strongly supports the development of a comprehensive eBook lending offer in public libraries as part of an efficient 21st century public library service  our own research shows that public libraries’ core role is to provide public access to reading, information and knowledge and in order to continue to fulfil this role they need to be able to operate effectively in the digital information and reading environment  Arts Council England strongly supports the implementation of Public Lending Right (PLR) on eBook loans via public libraries, to provide authors with fair compensation for the library lending of their work  we would also like to see public libraries working in active partnership with publishers to promote reading in digital environments and to support the purchase of eBooks and physical books  any agreement or arrangement between libraries and publishers to develop eBook lending in libraries should also include and support small and independent publishers  we recognise that eBooks and digital publishing is a fast changing environment. Any current solution to e-lending will need to acknowledge there may be need for further adaptations and new partnerships in the future

The benefits of eBook lending Arts Council England is undertaking a major research project to stimulate a strategic debate on the future potential of public library services and the value they offer. This research confirms that people expect libraries to continue to fulfil their core purpose of providing access to reading, knowledge and information to everyone. A finding of the research from dialogue with the library sector, partners, stakeholders and users and non-users of library services is that there is a widespread desire for eBook lending to be a core part of the 21st century public library offer, as part of an integrated digital offer from libraries.

It will not be possible for public libraries to continue to fulfil their role in the future without access to commercially produced digital content, including eBooks for public lending. There is substantial evidence that digital reading is fast growing in popularity among the UK population and there is also interesting evidence from the USA about how the market could develop in future (please see Appendix 2 for

1 detailed facts and figures). Some texts are already being published exclusively in eBook format and this trend will surely continue. This may be particularly true for some kinds of literary publishing in the future, particularly as the market becomes more polarised between the conglomerated global publishers and the small independents and self-published authors. Poetry magazines are increasingly turning to digital models and editors interested in new fiction are experimenting with new digitally-based business models such as Unbound.

We see the role of public libraries to provide the public with access to reading, information and knowledge in a range of formats, embracing both niche and mainstream material with rich and diverse content. Public libraries should have due regard to ensuring equality of access to reading and information without regard to ability to pay.

However, while the growth in ownership of digital devices is likely to continue, many members of the public will not have access to these devices or to digital texts. Libraries play a vital role in supporting the community to make the most of the new opportunities available to access knowledge, reading and information. Some library services already loan eBook readers and tablet computers to readers who do not own this technology. Other libraries are exploring how to deliver this service. Every library service that offers eBook lending supports readers to access these services. They often provide ‘eBook surgeries’ on their premises to answer questions and invite manufacturers of eReaders to display and demonstrate their products to library members. Library members can find out about and assess the new technologies in a neutral and non-commercial environment.

Library services recognise that their role in providing access to assisted digital services will only grow as the government pursues its policy of offering ‘digital by default’ services. eBook lending can be beneficial to publishers, booksellers, authors and government. It offers the opportunity for the public to develop new skills in a friendly unintimidating environment, and helps them to better navigate digital environments.

Current demand for e-lending

2 A recent survey by the Society of Chief Librarians of library services in England reveals that of the 111 responding authorities (out of 151), 84 currently provide some form of eBook or eAudio service.

Among those responding to the survey, there have been nearly half a million eBook downloads from public library eBook lending services in the period October 2011 – October 2012. This represents approximately three loans per eBook purchased and approximately 3.5 loans per audiobook purchased.

The statistics available on current demand for eBook lending may not, however, reflect the true picture because libraries are generally unable to keep up with demand due to the lack of titles available via the current eBook lending platforms. Several library services have anecdotally expressed their concern that readers of eBooks are leaving the service once they have read all the titles that are of interest to them. If library services were able to offer a full range of eBooks, it is likely that usage would also rise.

Arts Council England expects eBook lending to continue and develop in tandem with lending of physical books for the foreseeable future rather than acting as a direct substitution for physical book lending.

How eBook loans are currently delivered by libraries eBook licenses are purchased by libraries via content aggregators (ie wholesalers who also offer the user platform or webpage via which content is accessed). Please see Appendix 1 for more detail on the current eBook lending models in England.

Some trade publishers have lobbied strongly for in-building library loans of eBooks only, eg via terminals. This is because they feel that a simple easy-to-use online loaning system would offer no incentive to people to buy instead. As mentioned above, anecdotal evidence from public library services suggests that one of the major benefits of eBook loans is that it allows the public to access the library catalogue without having to visit the building. In the UK, there is currently significant ‘friction’ in online library loans, including password and library care authentication, waiting lists for popular titles and the fact that the most popular devices for reading eBooks (Kindles and iPads) either don’t permit access or have easier ways of accessing commercial content (iBook store).

There are a number of technological and creative developments that may influence eBook lending in the future. Anecdotal evidence from libraries of the usage of online access models for library lending suggest that they are significantly less

3 frequently used than downloadable eBooks. However, in future broadband speeds and municipal wifi are likely to make online access to long-form content more convenient and this could potentially become a more attractive option for the public.

Remuneration models and ways of working We are concerned that Public Lending Rights (PLR) are not currently paid on eBook loans. This is a source of considerable concern for authors and it undermines the positive relationship that public libraries and authors have developed. PLR is of great importance for the majority of authors; not only as their legal right, but as a vital source of income. According to research funded by Department for Culture, Media and Sport (DCMS), a typical professional author saw their income drop by £3,000 per year between 2000 and 2008. In 2008, nearly 80 per cent of UK authors needed a second job to survive.1 Arts Council is also aware that author advances have dropped significantly since 2008. PLR is a vital and – significantly – reliable source of income for writers. In February 2012, PLR made payments totalling £6.5 million to 23,718 authors. This year’s rate per loan is 6.05 pence, down from last year’s figure of 6.25 pence.2 This rate should not be further reduced and should be awarded at the same level to eBooks.

While there is legislation on the Statute Books to make PLR payable on some categories of eBooks, it does not go far enough or provide the flexibility to accommodate potential new models for eBook delivery. The requirement that the eBook be downloaded in the library building, for example, does not reflect current eBook lending provision and would not apply if the eBook were unable to be downloaded because of being a web-based artefact. Any current solution to e- lending and digital PLR will need to acknowledge there may be need for further adaptations and new partnerships in the future.

It will be important to ensure that all authors benefit from a new PLR settlement that is fit to adapt to future developments. The growing number of self-published authors must be considered. According to figures from Amazon, there has been a 400 per cent increase in authors using Kindle Direct Publishing between 2011 and 2012.

1 Staying Ahead: the economic performance of the UK’s creative industries’ Commissioned by DCMS from The Work Foundation. Available at http://www.theworkfoundation.com/assets/docs/publications/176_stayingahead.pdf 2 Available at http://www.publishers.org.uk/index.php?option=com_content&view=article&id=2155:childrens-writers-ride- high-in-plrs-most-borrowed-authors-lis&catid=80:general-news&Itemid=1617 4 The current models for eBook lending do not provide the library service with an active partnership role with publishers or authors. We feel that this is essential in order to ensure that all partners are able to contribute to and benefit from eBook lending. We provide a number of case studies in Appendix 3 to outline possible ways of working.

Borrowing and buying are not mutually exclusive. As research from the Pew Internet and American Life project demonstrates, many readers who regularly borrow eBooks from libraries also buy books.3 PLR gives authors an idea of their ‘unseen’ readership. It can also be used to demonstrate readership to a publisher.4 Library users are a potential source of income to writers through the PLR, and a potential source of income through purchases.

The future of eLending No one can accurately foresee exactly how the reading, writing and publishing landscape will develop in the next five, 10 or 20 years. The history of digital technologies demonstrates that new ‘disruptive’ technologies can appear at any time and completely change the way people use and interact with certain media and content. eLending in itself is not a disruptive phenomenon. It is a logical extension of existing library services that the public is demanding and which can support publishers’ and authors’ relationship with the public and the public’s ability to access their work in digital formats.

Publishers and library services will need to be prepared to deal with whatever the next five, 10 or 20 years bring in order to continue to meet public expectations. This may include ‘immersive’ literary experiences, multi-media experiences, user- generated or –collaborated literary works, interactive screenless technologies (ie lacking a physical screen but allowing the user to manipulate digital ‘objects’ as if they were three dimensional) and new nano-technologies such as silicone e-paper (a scroll of ‘paper’ that acts like a tablet screen). All of the above either exist or are in development already.

In the future eBooks will provide enhanced content –images, music, web interactivity etc (particularly non-fiction books) and will increasingly move away from being ‘downloadable’ commodities, into being web-based resources. This poses significant challenges to public libraries as the notion of ‘eBook lending’ may become outdated, or only a small part of an increasingly complex mix. There is likely to be a continuum from the physical book to highly interactive, user

3 http://libraries.pewinternet.org/2012/06/22/libraries-patrons-and-e-books/ 4 PLR, Writers Talk 5 generated verbal/visual narratives without any specific start or end point and libraries will need to be fluent in all these media and be in a position to provide access and support people to make the most of it as it develops.

One consequence of libraries offering eBook lending to the public is that they will need to continue to respond to changes in the way that people create and consume texts, information and knowledge. However, as mentioned in the previous section, this does not mean that the library building will no longer be an important part of library service delivery. Arts Council research has shown that this trusted community space is often the first port of call for people seeking help in accessing digital technologies and interpreting digital information, looking for somewhere to read, study, or participate in a reading group or other cultural group activity. There is no reason why eBook lending should undermine this crucial function.

6 Appendix 1: Current models of ebook lending

Overdrive has been the main aggregator offering eBooks to libraries and negotiating licensing terms and conditions with publishers since 2003. However, recent developments in the USA, with Overdrive partnering with Amazon to offer library loans to Kindles has led many publishers to withdraw their co- operation with Overdrive and cancel licensing agreements in the UK.

There has been a fragmentation of the market since 2009. Until then Overdrive had enjoyed a near monopoly. This has been welcomed by libraries looking for more choice, but can make the user experience confusing as users must search multiple platforms looking for content. Other aggregators of eBooks include ebrary, Public Library Online and WF Howes. There are pilots currently being tested for Askews. Libraries in the UK are not currently able to loan books via Amazon or to Amazon Kindles or via the iBook store on iPads. iPads can however read standard eBook formats.

Bibliotheca is considering entering the UK market with an offer that should allow public libraries to become owners of content (under specific conditions – ie not- for-profit loaning of items, and one item-per-user-per-loan period). This would give greater flexibility for libraries to manage their stock collections and would also provide a separation between content and platform that has not hitherto been available to libraries.

There are two models for providing eBook lending via libraries at present:  online access – unlimited public access with a library card but only while customer is online (Public Library Online model)  downloads – one user at any given time per copy purchased, downloads to a fixed or mobile device, expiring after 28 days eBook loans are free to the public at present. All eBooks are currently offered on fixed term licenses to libraries (generally around three years). Some publishers have indicated their desire to continue to limit the term of library licenses because they are concerned about repeat sales as, unlike physical stock, eBooks do not become worn with use.

7 Appendix 2: Facts and figures about ebook lending

Summary  eBook usage is increasing across all age groups and both sexes in the UK  eBooks are attracting new audiences who previously did not regularly read  research in the US finds that eBook borrowers are in many cases voracious book buyers: 41 per cent of people who regularly borrowed eBooks from libraries had bought the last book they had read5  in the UK, on a scale of one (low) to five (high), library users rate their awareness of their library’s digital reading offer as 1.96  librarians’ roles are certainly changing: with more time being devoted to ‘tech support’ for library users. In the UK more than half of library authorities have staff with a designated responsibility for delivering their work around digital and social media7

Current levels of eBook lending in the UK

A recent survey by the Society of Chief Librarians of library services in England reveals that of the 111 responding authorities (out of 151), 84 currently provide some form of eBook or eAudio service.

Among those responding to the survey, there have been nearly half a million eBook downloads from public library eBook lending services in the period Oct 2011-Oct 2012. This represents approximately three loans per eBook purchased and approx. 3.5 loans per audiobook purchased.

Usage of eBooks in the UK The use of eBooks is increasing across all age groups in the UK. Between August 2010 and March 2012, the percentage of people in the UK that bought eBooks in the previous six months rose from 13 per cent to 24 per cent for 16-24 year olds; 10 per cent to 35 per cent for 25-34 year olds; 5 per cent to 30 per cent for 35-44 year olds; 3 per cent to 26 per cent for 45-54 year olds; and 3 per cent to 20 per

5 Available at http://libraries.pewinternet.org/2012/06/22/libraries-patrons-and-e-books/ 6 Reading Agency, Digital Research available at http://readingagency.org.uk/adults/Libraries%20and%20Digital%20- %20Research%20into%20the%20use%20of%20digital%20media%20in%20libraries%20to%20develop%20audiences%20for %20reading.pdf p4 7 http://readingagency.org.uk/adults/Libraries%20and%20Digital%20-%20Research%20into%20the%20use%20of%20digital %20media%20in%20libraries%20to%20develop%20audiences%20for%20reading.pdf p8 8 cent for people aged 55 and over 8. These trends are likely to continue and libraries must be in a position to meet a growing expectation for digital products from people of all ages. A 2012 online survey of 2,500 people in the UK found that 40 per cent of those surveyed planned to purchase eBooks in the following 12 months, while 29 per cent intended to read more paperback/hardback books.9

New devices and the increased availability of eBooks offer new ways for people to read books. Research published in 2012 found a substantial increase in the use of the Kindle device: 40 per cent of people who read eBooks use a Kindle to do so. The Kindle has surpassed both desktops and laptops (collectively used by 45 per cent of people) as the most popular device to read eBooks on. However, there has also been a significant growth in the use of tablet computers, which more than doubled market share (eBook devices) between February 2011 and March 2012, with 12 per cent of people currently using this format most often to read eBooks.10 In the US, the data measurement company comScore found that ownership of tablets has risen significantly and was correlated to smartphone ownership, with 24 per cent of smartphone owners also using tablets in 2012. In 2011 the figure was 9.7 per cent.11 27 per cent of adults in the UK owned a smartphone in 2012.12

A finding of particular importance, by a 2012 study in the UK by Ofcom, is that since owning a tablet, 17 per cent of respondents claimed to read more books (either eBooks or paperbacks) than before.13 Readers are not simply migrating from physical books to eBooks. Recent research in the UK finds that eBooks are beginning to attract a wider market of readers, including those who rarely bought physical books. 14 Men (35 per cent) are more likely than women (25 per cent) to purchase eBooks. However, women who do purchase eBooks, purchase more than men and download more for free.15

8 Bowker, British Kids Read Their e-Books On a Bigger Screen, says New Study from Bowker. From Bowker Market Research’s Understanding the Digital Consumer project available at http://www.bowker.co.uk/en- UK/aboutus/press_room/2012/pr_05142012.shtml 9 Entertainment Media Research, 2012 Digital Entertainment Survey (2012, available at http://www.wiggin.co.uk/images/wiggin/files/des2012.pdf) 10 Bowker, British Kids Read Their e-Books On a Bigger Screen, says New Study from Bowker. From Bowker Market Research’s Understanding the Digital Consumer project available at http://www.bowker.co.uk/en- UK/aboutus/press_room/2012/pr_05142012.shtml 11Available at http://www.comscore.com/Press_Events/Press_Releases/2012/6/Majority_of_Tablet_Users_Watch_Video_on_their_Devicee 12 Ofcom Communications Market report: UK, 2012 13 Available at http://stakeholders.ofcom.org.uk/market-data-research/market-data/communications-market- reports/cmr12/market-context/uk-1.054 14 Bowker, Global eBook Monitor (Bowker Market Research, London, 2012 available at http://dl.dropbox.com/u/64790939/Bowker%20Market%20Research%20UK/Global%20eBook%20Monitor%20All%20Country %20Comparison%20final%20report%20090412.pdf) p9 9 Income of self-published authors The financial experience of those who self-publish is in some ways similar to that of authors who use publishers, reinforcing the importance of PLR to writers. Despite the successes of self-published authors such as Amanda Hocking and EL James, the average amount earned by self-published authors in 2011 according to a survey of more than one thousand self-published authors, was £6,375 (although this figure is skewed by a minority of highly successful authors): 50 per cent of self- published authors however, earned less than £310, while the top 10 per cent earned approximately 75 per cent of revenue.16 The correlation between ebook lending and ebook buying According to research from the Pew Internet and American Life project, 41 per cent of people who regularly borrowed eBooks from libraries had bought the last book they had read.17 The study concludes that eBook borrowers were in many cases voracious book buyers. Research finds the UK finds that 50-60 per cent of regular eBook buyers in the UK were regular buyers of printed books too.18

What is perhaps most pertinent is a finding from Pew research that only 58 per cent of library patrons knew their public libraries offered e-books for borrowing. Research by the Reading Agency in the UK finds that on a scale of one (low) to five (high), library users rate their awareness of their library’s digital reading offer as 1.919: this in the context of the recent announcement by Amazon that its UK website now sells more eBooks than hardbacks and paperbacks combined. For every 100 print books sold through the website, Amazon sells 114 titles for its Kindle eReader device.

Changing roles of library staff A majority of the librarians in the US who responded to a 2012 survey by Pew Research reported that they are excited about the role that eBooks have played in their institutions and the way that e-books have added to patrons’ lives. They also report that more of their time is devoted to providing ‘tech support’ for patrons—

15 Bowker, British Kids Read Their e-Books On a Bigger Screen, says New Study from Bowker. From Bowker Market Research’s Understanding the Digital Consumer project available at http://www.bowker.co.uk/en- UK/aboutus/press_room/2012/pr_05142012.shtml 16 Dave Cornford and Steven Lewis, Taleist website.

17 Available at http://libraries.pewinternet.org/2012/06/22/libraries-patrons-and-e-books/ 18 Bowker, Global eBook Monitor (Bowker Market Research, London, 2012 available at http://dl.dropbox.com/u/64790939/Bowker%20Market%20Research%20UK/Global%20eBook%20Monitor%20All%20Country %20Comparison%20final%20report%20090412.pdf) p9 19 Reading Agency, Digital Research available at http://readingagency.org.uk/adults/Libraries%20and%20Digital%20- %20Research%20into%20the%20use%20of%20digital%20media%20in%20libraries%20to%20develop%20audiences%20for %20reading.pdf p4 10 both in their hardware needs and mastering software and the web—and away from traditional reference services.20

Librarians’ roles are certainly changing. In the US, many report that much more of their time is devoted to providing ‘tech support’ for library users – both in their hardware needs and mastering software and the web. In the US, many librarians are ‘self-taught’ techies, with staff training varying widely in quality.21 In the UK, research by the Reading Agency finds that more than half of library authorities have staff with a designated responsibility for delivering their work around digital and social media.22

A recent survey of US library users (aged 16 and over) asked about the source of book. The survey found that 64 per cent received book recommendations from family members, friends, or co-workers; 28 per cent received recommendations from online bookstores or other websites; 23 per cent received recommendations from staffers in bookstores they visit in person; and 19 per cent received recommendations from librarians or library websites.23

Research in the UK by the Reading Agency points to the convergence of these sources of recommendations in some library services, who are using their online library catalogues in increasingly sophisticated ways. Some library catalogue facilities include links to related websites (provided by 29.2 per cent of libraries); access to other people’s book reviews (27.4 per cent); space to rate books (26.5 per cent); and recommendations from the library management system (22.1 per cent). One authority in ten (10.6 per cent) offers related reading group guides. Among library authorities that do not offer these facilities, there is an appetite to improve online access to catalogues. Nine in ten (90.9 per cent) of these authorities reported that they are looking at ways to make their catalogues more open. 24 Libraries are responding to a changing landscape. Careful thought must be given to how libraries will adapt to these developments, and there is a need to be clear about what is expected of librarians.

Barriers to provision of digital services

20 Available at http://libraries.pewinternet.org/files/legacy-pdf/PIP_Libraries_and_Ebook_Patrons%206.22.12.pdf P8 21 Available at http://libraries.pewinternet.org/files/legacy-pdf/PIP_Libraries_and_Ebook_Patrons%206.22.12.pdf P8 22 Available at http://readingagency.org.uk/adults/Libraries%20and%20Digital%20-%20Research%20into%20the%20use %20of%20digital%20media%20in%20libraries%20to%20develop%20audiences%20for%20reading.pdf p8 23 Available at http://libraries.pewinternet.org/files/legacy-pdf/PIP_Libraries_and_Ebook_Patrons%206.22.12.pdf p17 24 Available at http://readingagency.org.uk/adults/Libraries%20and%20Digital%20-%20Research%20into%20the%20use %20of%20digital%20media%20in%20libraries%20to%20develop%20audiences%20for%20reading.pdf p6 11 Libraries have particular barriers to overcome if they want to expand their use of the internet and social media. Filters and firewalls are the most common obstacle to libraries’ work, cited by just over half (53.1 per cent and 51.3 per cent respectively) of all library authorities. The blocking of social media websites is an obstacle for 46 per cent of authorities, while broadband width is a problem for one in six authorities. 25 These issues required concerned action across the country.

25 Available at http://readingagency.org.uk/adults/Libraries%20and%20Digital%20-%20Research%20into%20the%20use %20of%20digital%20media%20in%20libraries%20to%20develop%20audiences%20for%20reading.pdf p11 12 Appendix 3: Case studies for new models of eBook lending and publisher/library partnerships

Sweden In Sweden a third party organisation (Publit) is working with publishers and public libraries to develop dual licensing. The idea of dual licensing is to create value on both sides of the fence by using library resources to fund digitization of non- commercially viable backlists, which would yield a file that the publisher has full commercial control over while at the same time giving the library fair lending conditions.

What the library is in fact offering is an advance, money on the table that makes mass digitization feasible for the publisher here and now. It does effect the libraries cash flow, but it's money that will come back to the library, which will happen in two ways. First of all, the library is allowed a number of lendings free of charge. Second of all, the fee per lending is lower than it would otherwise be. Publit are also discussing ways in which the library can have access to the actual eBook files (or ‘shared custody’), which would allow them to work with the type of metadata that is embedded in the file and that is becoming increasingly important, and that the average publisher lack the competence to do.

Douglas County Library services in the US purchase approximately 10 per cent of all the books produced by commercial publishers. For children’s books that figure rises to 40 per cent. With physical books, library services were able to enjoy discounts from publishers. However, four of the ‘big six’ publishers refuse to sell eBooks to libraries at all. Of the two that do, HarperCollins requires libraries to ‘purchase’ the book again after 26 checkouts, while Random House recently raised the price of a new eBook by 300 per cent.

In response to this Douglas County Libraries in the US sought out alternative electronic publishers who were able to offer more favourable terms. The library service now collaborates with 17 publishers to offer eBooks and downloadable videos for users covering topics ranging from Marvel graphic novels and Rick Steves travel videos, to interactive children's books and mainstream fiction. The library service offers more than 8,000 eBooks, and 7,000 downloadable videos.

Bookstart A partnership in which publishers and libraries work together to share data, promote reading, extend taste and support local writers through new models such 13 as subscription based publishing will help keep a richness and diversity of product for the readers and help writers too. Bookstart is one example of a private-public partnership. It offers free books to all children at two key ages before they start school, with the aim of inspiring a love of reading. Bookstart offers free books for children, support and guidance, an opportunity to attend vibrant community events, and an online website with tools to share books, stories and rhymes.