An Ambitious Plan to Sell Electronic BooksPresses Offering Books Through netLibrary

University librarians and press officials see promise and possible pitfalls in the concept

A group of Colorado-based entrepreneurs is promoting an ambitious commercial venture to sell electronic books to university libraries --

a venture that some librarians and university-press officials say is the most promising experiment with e-books yet.

But even some supporters of the venture, known as “netLibrary,” say that it is unclear whether library patrons will embrace the technology. On some campuses, netLibrary may also face criticism because of features -- such as detailed monitoring of how e-books are used -- that are intended to restrict pirating but that may be seen as invading users’ privacy.

From netLibrary, a university library can buy an electronic copy of any book in netLibrary’s computer for the same price as a printed version. At any time of day or night, a user can check out the book by downloading it in a special format that can be read only by proprietary software produced by netLibrary; the stand-alone program -- which is called Knowledge Station and which runs only on machines using the Windows operating system -- must be downloaded before books can be read off line.

Knowledge Station allows a user to highlight or annotate the copy, although not to print it out -- which might be considered a drawback by people who dislike reading long texts on screen. And while that copy of the book is in use, no one else from that university can check it out.

The full texts of all of netLibrary’s e-books are searchable, and the company plans to add supplemental content, such as dictionary definitions of words in the books and multimedia files that depict subjects the books cover. A patron from a university that has purchased e-books from netLibrary can also read those books on line with any World-Wide Web browser (http://www.netlibrary.com), but without being able to take advantage of all the services offered by the proprietary software.

The system was activated on March 29 with about 2,000 books, including scholarly works from publishers such as MIT Press and New York University Press. The company says it has signed agreements with 43 publishers to distribute electronic versions of some of their books. Within a year, it plans to be offering “close to 20,000" titles, says Robert W. Kaufman, netLibrary’s executive vice-president and chief financial officer.

Timothy R. Schiewe, netLibrary’s president and chief operating officer, is even less modest about its goals. He offers a sales pitch that compares netLibrary with such revolutionary advances in information technology as the development of movable type and the creation of the ancient library in Alexandria, Egypt.

While they use less hyperbole, some library officials agree that netLibrary is on the right track. “We’re very upbeat about it,” says Alan Charnes, executive director of the Colorado Alliance of Research Libraries, a group of 11 libraries that has advised netLibrary on the design of its service. “A body of content not now easily accessed electronically will become available.”

“We certainly think it has a tremendous amount of potential,” says Thomas Sanville, executive director of OhioLINK, a consortium of academic libraries in Ohio. Both OhioLINK and the Colorado alliance are among netLibrary’s “charter customers.” Other charter customers include the University of Phoenix, the University of Texas System, and PALINET, a consortium of libraries in Delaware, the District of Columbia, Maryland, New Jersey, New York, Pennsylvania, and West Virginia.

An institution can be a charter customer -- meaning it has offered advice about the project -- without actually buying any books, says Mr. Schiewe. However, some have taken the plunge: Mr. Sanville, for example, says OhioLINK has decided to spend an initial $150,000 to purchase about 3,500 titles.

Others are taking a wait-and-see approach. Sue Phillips, associate director for technical and networked services at the General Libraries of the University of Texas at Austin, says she thinks netLibrary is promising but wants to see a list of the titles that will be available before making any purchases. “We’d like to have a quality list of books that were of the type that we would buy,” she says. Indeed, Mr. Schiewe and Mr. Kaufman acknowledge that the size of netLibrary’s inventory is likely to be one of the most important factors in its eventual success or failure.

After hearing complaints from some librarians, such as Mr. Sanville, that netLibrary does not have sufficient inventory for even initial purchases, the venture capitalists who are backing netLibrary have agreed to accelerate the addition of books to the system, Mr. Schiewe says. As a result, netLibrary is adding 30 to 50 titles every day, he says.

Doing that is costing the company “millions,” he says. Scanning a book so that it can be added to netLibrary can cost as much as $3,000 if the volume has many complex formulas and charts, he adds.

So far, the company has been unable to use electronic files provided by publishers, because a single book often is represented by many files from different stages of the volume’s production, says Mr. Kaufman. One goal for cutting netLibrary’s production costs is developing a way to use electronic files from publishers, he says.

Mr. Schiewe says publishers have embraced netLibrary enthusiastically. “Not one has told us No,” he says.

But there seems to be more wariness among publishers than Mr. Schiewe suggests. MIT Press so far has supplied netLibrary with books only in cognitive science and a few other miscellaneous titles, says Vicki Jennings, the press’s marketing manager. Cognitive science was selected because the press is starting a Web site in the discipline this summer, she says, adding: “It seemed like an attractive tie-in with what we’re already doing on line.”

Mr. Schiewe says that netLibrary’s contract with MIT Press gives it access to all the publisher’s titles, but Ms. Jennings says she does not know when MIT Press might decide to allow netLibrary to post other volumes. Asked how she would decide whether to add more MIT titles to netLibrary, she says: “Customer satisfaction is going to be high on my list. I want to know that librarians are happy with it and that library patrons are happy with it.”

At Columbia University Press, a similar attitude holds. “We’re cautiously optimistic,” says Helena Schwarz, its director of sales and marketing. She says Columbia has provided netLibrary with a cross section of its titles. “It seems like a new revenue stream,” she says, adding that netLibrary “will enable libraries to get some books that they might otherwise not be able to get.”

Indeed, that expectation is one of netLibrary’s major selling points with publishers, says Mr. Schiewe. NetLibrary allows universities to form consortia to make joint purchases of electronic books, which then can be used by patrons of any of the libraries in the group. By combining the purchasing power of its members, the consortium can buy books that members could not afford on their own, so publishers will be selling copies of books they otherwise would not, says Mr. Schiewe. He says netLibrary is concentrating its initial sales efforts on the 10 largest library consortia, which he says collectively spend $600-million on books annually.

OhioLINK’s Mr. Sanville agrees that buying through consortia will be a boon for university libraries. But he warns that it may be difficult to develop procedures for selecting books to purchase. University libraries have little experience in coordinating book purchases, he says.

Another selling point for netLibrary, says Mr. Schiewe, is that it has been set up to insure that the electronic books are used in accord with copyright law. Knowledge Station -- the proprietary software with which a patron reads a downloaded book -- is programmed to block actions that netLibrary officials deem to violate U.S. copyright law. For example, it limits the amount of text that a user can copy or print from a netLibrary book at any one time -- usually to 5,000 characters, or the equivalent of several typewritten pages. A user who tries to exceed that limit gets an error message.

All efforts at copying and printing are recorded, and the program looks for evidence that the user is violating the book’s copyright by repeatedly copying or printing small parts of it. But the program’s on-line help file is vague about what behavior is forbidden, saying only that “the system is sensitive to usage patterns that suggest excessive copying or printing.” Whenever one runs afoul of the undisclosed rules, Knowledge Station issues a warning. According to the help file, “If the illegal copying or printing pattern continues, your account is disabled for a period of time and the event is investigated by netLibrary.”

Even for law-abiding scholars, Knowledge Station is a bit of a nudge. Every time a Knowledge Station user copies text from a netLibrary book to the computer’s internal clipboard -- for example, as a step toward inserting a quotation from the book into a word-processor document -- the program displays a disquisition on copyright law: “ATTENTION! This material is protected by U.S. copyright law. Permission to print, reproduce, or distribute copyrighted material is subject to the terms and condition of fair use as prescribed in U.S. copyright law. Transmission or reproduction of protected items beyond that requires the written and explicit permission of the copyright owners.” The user must click on an “OK” button to continue.

When the user electronically pastes the text into the word-processor document, Knowledge Station automatically adds quotation marks around the text, and even inserts a footnote. Mr. Schiewe says that netLibrary will maintain statistics on the frequency with which users quote from each of its books. That information will be supplied to publishers and university tenure-review committees, he says. The information collected by netLibrary also could be used to identify the source of any pirated copies of its books that might show up on the Internet, he says.

The netLibrary software is not without its bugs. For example, in a test by The Chronicle, netLibrary’s Web site allowed books to be downloaded without warning that a copy of Knowledge Station was needed as well to read the books. Knowledge Station itself behaved erratically, working well on one computer but at first refusing to print on another -- and finally refusing to work at all. Computer-support personnel at netLibrary suggested only that a new copy of Knowledge Station be downloaded and installed.

And although Macintosh computers are common in academe, Knowledge Station is available only in a Windows version. Macintosh users are limited to reading netLibrary’s books on line, which requires only a Web browser. Sandy Mickelson, netLibrary’s senior director for marketing, says it is “investigating several options” for providing a Mac version of the software, but she says the company has set no date for one.

The requirement that Knowledge Station be downloaded and installed on a user’s computer in order to read books off line could be a big impediment for netLibrary, says OhioLINK’s Mr. Sanville. “Conceptually, it seems it could be a problem, but we don’t have any real-world experience yet,” he says.

Other university librarians are worried about what might happen if netLibrary went bust: Because the e-books reside on netLibrary’s computer, the librarians worry, they might lose access to the books that they thought they had purchased. Mr. Schiewe says that the company will archive copies of its e-books on CD-ROMs that will be held in escrow. If the company went out of business, he says, each library would receive disks with the books it had purchased, allowing it to post the books on its own computer system.

The company also hopes that publishers, once they see that netLibrary’s system safeguards their volumes, can be persuaded to try letting libraries use the electronic books in new ways, says Mr. Kaufman. For example, instead of requiring a university library to purchase additional permanent electronic copies of a book, netLibrary eventually might be able to rent out extra copies of a book to handle end-of-semester crunches, he says.

NetLibrary also is planning an experiment, with the publisher Allyn & Bacon, in which access to on-line textbooks would be sold for a semester at a time, says Mr. Schiewe. Access would be priced to compete with used textbooks, he says, but unlike used-book sales, the e-text rentals would provide some return to the publishers, which would share the income with netLibrary. The experiment is expected to be in place by the fall, Mr. Schiewe says, but he will provide no other details.

The netLibrary technology also could be extended beyond commercially available books. Mr. Schiewe says that netLibrary could be used as a platform for books that have been digitized by other electronic-book projects. For example, netLibrary already offers a reading room that contains books converted to electronic format by Project Gutenberg, a 28-year-old independent effort to create machine-readable versions of books. The volumes are available free elsewhere on the Web (http://www.promo.net/pg/).

Mr. Schiewe says that netLibrary also could play host to archives of digital manuscripts, such as the extensive repository of Thomas Jefferson’s papers at the University of Virginia. A university that created such an archive, he says, could use netLibrary to provide free access to its students and faculty members -- and charge researchers from other institutions.

“Our mission is to create the source for published information on the Internet,” says Mr. Kaufman. “The goal is to be the platform for information.”

ABC-CLIO
AMACOM Books
The Brookings Institution
Cambridge University Press
Columbia University Press
Duquesne University Press
E Source
Facts on File
Grove’s Dictionaries Inc.
Harvard Business School Press
Indiana University Press
Johnson Publishing
Joseph Henry Press
Libraries Unlimited
M.E. Sharpe
Macmillan Ltd.
Macmillan Reference Ltd.
The McGraw-Hill Companies
McWhiney Foundation Press
The MIT Press
National Academy Press
New York University Press
O’Reilly & Associates
Ohio University Press
Purdue University Press
Reference Service Press
Rutgers University Press
Scarecrow Press
Southern Illinois University Press
St. Martin’s Press
Teachers College Press
University of Akron Press
University of California Press
University of Nebraska Press
University of North Carolina Press
University of Pittsburgh Press
University of Scranton Press
University of Washington Press
University Press of Colorado
University Press of Mississippi
Utah State University Press
Vanderbilt University Press

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Section: Information Technology
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