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With the announcement of the iPad yesterday devoting a substantial portion of the time to a demo of what books and reading will look like, I’m wondering about the business model for books in the iTunes Store, and whether there will be an opening for circulating (particularly public) libraries or not.

When we think about iTunes, we think about a basic fee-for-purchase model. We’ll just leave aside the fact that you never truly “own” a digital file, you’re just buying a particularly-structured license to use it – the popular perception is that 99 cents buys you a song, and that’s that. The assumption is that when they’re added later this year, books will have the same presence, just another tab alongside music, TV Shows and movies.

However, there’s a sleeper feature in the iTunes Music Store that has truly disruptive potential for book publishing, if publishers are innovative enough to embrace it: rental. Right now, you can rent access to a movie in iTunes – the file downloads to your device, you can start watching whenever you want, and you have 24 hours from the first time you hit play to finish before the file becomes unplayable. Imagine the same model, completely mundane for a film industry used to the role of video stores in the landscape, applied to books. If a book costs $13 to “buy” in iTunes (one rumor I’ve seen), what’s the right price point for a rental of, say, two weeks?

“But doesn’t that kill libraries,” one might ask? It definitely expands the market for books beyond those who want to pay full price and have access in perpetuity, but this isn’t necessarily bad for libraries IF there’s a mechanism for institutional funding of user rentals. In other words, imagine an option for an institutional iTunes account, where a given user would add a library card number to their iTunes account and their library would pick up the tab when they “rent” books (or, plausibly, even other media)? This isn’t so far afield from current trends toward licensing print and electronic collections for circulation, and in fact might ultimately be a much cleaner business model for circulating collections: a given library has a fixed budget every year to subsidize access, which can be rationed among users according to any number of schemes.

Of course, this would rely on a clear decoupling of the “preservation” mandate of libraries from the “access” mandate, and some parallel ability to ensure long-term preservation of digital book files beyond the particular life of iTunes or even Apple, but that’s a separate issue. I’d argue there a business here that could ultimately grow the market (even if cannibalizing a percentage of conventional “sales”), an opportunity to be explored which might be good for libraries, good for publishers, and good for books.

Comments 2 Comments so far. Leave a comment below.

Sean Kheraj,

January 29, 2010 at 12:21 am

Josh:

I hadn’t even thought about this possibility. Book rentals would be a very interesting business model and the prospects for libraries are even more intriguing. I wonder if something like this could be usefully applied to university libraries through iTunes U.

Who knows what will happen with textbooks on the iPad?

Josh Greenberg,

June 16, 2010 at 11:49 am

Actually, in hindsight, this argument leads in an unexpected direction, where libraries essentially provide the media equivalent of food stamps.

Trackbacks 2 pings so far.

January 29, 2010 iPad och bokbranschen » Datortekniskt
January 29, 2010 New ways to sell ebooks aren’t easy to implement – The Shatzkin Files

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