Colannino: NetBooks and its Impact on Libraries

Abstract

The Netflix model allows subscribers to order DVDs online, receive them by mail, and keep them indefinitely and without late fees. If applied to books, this model (call it NetBooks) would offer an alternative to the public library. NetBooks, if successful, would push the public library into further irrelevance. However, such would have no real consequence for the public library which would continue to exist as a tax supported organization largely immune to competition from the private sector.

Introduction

According to Wired Magazine[1] consumers love “the Netflix model… which lets subscribers order DVDs online, receive them by mail, and keep them for as long as they want without late fees.” Wal-Mart and Blockbuster are now launching similar models. The Blockbuster model augments the return-by-mail option with in-store drop off.[2] Our class assignment[3] was to consider “what would happen if companies like Google decide to team up with a physical bookstore like Barnes and Noble to offer such services” for books.

Competition and the Modern Library

With the advent of the internet, Google Books, Netflix, and the Blockbuster model, the modern library is beginning to experience competition as never before. Some say that what lies in the balance is nothing less than the survival of the library as we know it.[4] However, in many cases, the library’s reaction to its deepening decline and lack of relevance has been denial and pretended value. For example, Ragnar Adunson makes the absurd claim that libraries are essential for promoting “cross-cultural communication” and that they are essential to democracy.[5] Bertot[6] insists that libraries deserve extra public funding as a meeting place for disasters; and, not to fund libraries in this way constitutes an unfunded mandate. In other words, according to Bertot, we owe the library a living. Such struthious behaviors do not address the core problem – libraries are becoming increasingly anachronistic and irrelevant; inventing pretended roles for them will not make the problem go away.

Modern bookstores have upgraded their surroundings, imported coffee houses and delis, added live and recorded music, and made their stores gathering places for all generations (students, the elderly, and the public at large). In stark contrast, the public library offers the same sterile setting I remember as a boy.

This is not to say that the public library is useless. An interconnected system of libraries with a combined borrowing prowess allows the author to obtain things he could never find at a bookstore (even an on-line bookseller such as Amazon.com). For example, chances are excellent that I can obtain an out-of-print book through my local library. I can also find something else (more properly, someone else) at a library that I cannot find at a bookstore – a reference librarian. These highly skilled search professionals are without substitute. However, these are niche markets, and in an increasingly consumer society of instant gratification, they may be of declining relevance.

Alternatives

Already, one can read books online. For example, the author’s combustion book is indexed (in its entirety![7]) by Google Book Search.[8] Why go to the library? About the only reason to visit one seems to be in order to obtain a physical copy of a text. However, if a service – let us call it NetBooks – were able to offer book rentals by mail, what advantage would public libraries offer?

Some may argue that books by mail cannot become a reality because books are more costly to ship and much more expensive than DVDs to replace. I tend to agree. Problems with damage and failure-to-return are much greater with a book; some books, such as technical books, are relatively expensive. Moreover, technical books would have a greater tendency to be hoarded by renters or kept for their reference value. Notwithstanding, NetBooks could survive even these objections. For example, a credit card number is good insurance against damaged or unreturned goods. If Avis can rent a car[9] with one, NetBooks should surely be able to lease a book.

Besides, there are other variations on the theme. Books may be burned to CDs or DVDs and there you have it – unlimited books by mail for $19.95, up to three at a time, if we follow the Netflix model exactly. There could be some copyright restrictions to work out, but even now, one can read books online, some for free and some for fee. For example, the University of Pennsylvania offers over 10,000 books for free online reading[10] while NetLibrary[11] offers access to 140,000 books to subscribers.

Problem Reactions

How does the library respond to such competitive pressure? Despite some well-articulated remedies,[12] the likelihood is that libraries will do more of what they have already done:

1. more whining,[*]
2. more self-aggrandizement,[†]
3. more inventing of feigned but pseudo “essential” and uses for libraries,[‡] and
4. more sliding into the dark abyss of greater irrelevance.

Dissatisfaction with libraries is not merely confined to the public. Libraries themselves seem to brood employee dissatisfaction. It is apparently a worldwide phenomenon from the Midwest[13] to the Middle East.[14]

Even now, the public library cannot compete with brick and mortar bookstores such as Barnes & Noble, BookStar, Borders, and the like despite the fact that libraries offer their wares for free. As far as free viewing is concerned, one can read books without charge at any major bookstore and enjoy a mocha frappuccino at the same time. In a public library one cannot even talk above a whisper. As many recognize, the library model has not changed in 200 years and some, like Lew Rockwell, are advocating library de-funding.[15] (Rockwell refers to libraries as “tax-siphoning book warehouses” and notes with approval a ballot issue for the de-funding of public libraries in Steve County, Washington.)

The Irrelevant Library

Who visits a library anymore?[16] Oklahoma libraries averaged 4.64 visits[§] per capita per year[17], and actually, library visits have increased over previous years.[18] These statistics appear favorable until you realize that they mean the average patron visits a library only once every 70 days.[**]

In contrast, library visits are dwarfed by online visits for information. According to Search Engine Watch, online searches total more than 213 million per day in the U.S., alone.[19] At the time of this writing, the U.S. population is 302 million.[20] Thus, on a per capita basis, one has better than a 2 out of 3 chance of querying the internet for information on a given day. If we presume that habits of U.S. and Oklahoma residents are roughly equivalent, Oklahomans are more than 50 times as likely to use the internet rather than a library visit to obtain information.[††]

The Irrelevance of Competitive Pressure for the Public Library

Despite its irrelevance, the public library is about as likely to go out of business as the IRS. The problem is not competition, but immunity to it. So what if no one goes to the library? Unlike private businesses, the public library does not depend on consumer or employee satisfaction to stay alive because it is tax-funded. To quote the famed economist and Nobel laureate Milton Friedman,[21] “there is nothing so permanent as a government organization.”[22]

Corollary Hypotheses for the NetBooks Model

What would happen if companies like Google decide to team up with a physical bookstore like Barnes and Noble to offer Netflix type services for books? Previously, we gave the presumed actuality of this model the moniker NetBooks. Now, for the sake of argument, we presume that NetBooks offers books by mail in direct competition with the library. In the parlance of a hypothesis statement, we have the following.

1. Main Hypothesis: NetBooks now offers books by mail in direct competition with the library.

Let us now explore what corollary hypotheses the NetBooks model demands.

Corollary Hypotheses

2. NetBooks is a for-profit organization and not supported by force of law or government subsidy. (This is the Netflix model applied to books.)

3. NetBooks is successful. (In order for NetBooks to offer competition with the public library, we presume longevity.)

4. NetBooks fills the need for public information in a way that is superior to the public library. (If this were not the case, NetBooks would cease to exist, presuming a for-profit model operating in a free market.)

What effect will this presumed new competition have on the public library? To consider that question, we need merely examine how the library has fared against its many existing “competitors” to date such as the internet, booksellers, etc. Obviously, the library has survived. However – and just as demonstrably – the library is in denial about its decreasing relevance.

The Public Library is in Denial About Its Decreasing Relevance

Denial by the public library is evidenced by a numerous specious claims. To consider one of many, the ALA has recently stated that “public libraries are a good investment.”[23] In support of their claim they cite a Florida study[24] which baldly asserts “For every $6,448 spent on public libraries from public funding sources (federal, state and local) in Florida, one job is created.” The stupidity of the statement is nearly self-evident – taken to its logical and absurd conclusion, we could end world hunger by building libraries. At this point, one’s malarkey detector should be in overload.

We may further demonstrate the statement’s absurdity as follows. The federal minimum wage is $5.15/hr;[25] counting leap years, there are 2087 working hours in a year (365.25 * 5/7 * 8 = 2,087.14) resulting in an annual minimum wage of $10,750 (2,087.14 * 5.15 = 10,750). In other words, if we take the ALA quoted statistic at face value, every dollar spent on Florida public libraries generates $1.66 in wages; this, if we conservatively count a job at its minimum wage equivalent (10,750/6,448 = 1.67). The Florida unemployment rate in May 2007 was 3.4% representing 310,000 persons.[26] So presto change-o, spend 2 billion dollars on libraries and generate 310,000 minimum wage jobs (310,000 * $10,750/ 1.67 = $2 billion) – unemployment solved! This is the equivalent of the perpetual motion machine – extract $2 billion in taxes and generate $3.3 billion in wages. With a total tax burden rate of 60%,[‡‡] we return the $2 billion in the form of taxes and we have taxed our way to prosperity and built our libraries for free.

What the report fails to consider are the number of jobs destroyed for every job created. Management guru Tom Peters[27] roughly estimates that it takes five government employees to do the job of one employee in the private sector.[28] In other words, the public library can only create $6,448 in jobs by destroying $32,240 worth of value.[§§] One can debate Peters’ glib statistic, but regardless of the actual level of waste, government efficiency is certainly worse than that of the private sector. Thus, in no case can government spending produce a net increase in jobs; indeed sound economic models demand the opposite.[29] To believe anything else is self-delusion.

Conclusions

We therefore conclude the following.

1. With the advent of NetBooks, the public library will grow more irrelevant.
2. The public library’s traditional response to its waning relevance is (and by induction will continue to be) denial.
3. In truth, the public library does not compete with other information providing services because it is supported by tax contributions and immune from competitive pressures.

Therefore, if a company such as Google decided to team up with a physical bookstore like Barnes and Noble to offer a Netflix type service for books then the library would become more irrelevant, but this would not affect its survival.

References

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[*] See the Ellish article in the references section of this paper.

[†] Some authors have gone so far as to confuse forced consumption with relevance: see Hiss, Sheila and Boatright, Kay; Keeping the Library Relevant to Community College Students: Library Skills as a Required Course, Community & Junior College Libraries, Volume: 11 Issue: 4, 1 June 2003. Abstract available via web at http://www.haworthpress.com/store/ArticleAbstract.asp?sid=VA1GT08X0CBH8J92T0SFREKFMXTJ27C2&ID=38943, last accessed 20 June, 2007.

[‡] See the Adunson article in the references section of this paper.

[§]Adjusting for reading age does not change the analysis much. Children and adults of reading age constitute 91.5% of the population using Oklahoma population estimates taken from 2006 U.S. census data at the Oklahoma Commerce Department website:

http://staging.okcommerce.gov/test1/dmdocuments/2006_Oklahoma_Population_Estimates_by_Single_Age_Sex_1805071953.pdf This equates to 5.07 visits per reading age capita.

[**] Since there are 365.25 days per year (counting leap years), the probability of a person visiting the library is 4.64/365.25 = 1/72.

[††]We are comparing in-person library visits with all online information seeking. No doubt there are substantial online inquiries which are to and through libraries. However, were libraries to provide only this function, we would not need traditional libraries (brick and mortar). Nor would we need many of those comprising the traditional library staff. Accordingly, this author’s analysis fairly omits any adjustment for online library information seeking.

[‡‡] This is not far-fetched. Consider federal income and social security tax (34%), state income tax (15%), sales tax (9%), import taxes and duties, gasoline tax (~$0.62/gal), sugar and farm subsidies, excise taxes, estate taxes, funeral and other special taxes, …. The total tax burden is truly staggering approaching 2 dollars collected for every three dollars earned.

[§§] This argument, by itself, is not sufficient to demand the elimination of public libraries. All government spending is subject to inefficiency. Such includes public expenditures for essential public services such as national defense, the court system, police, fire, emergency response, etc. The author’s argument is not for abolition of government but for less self-deluded reporting. Government does not and cannot create net jobs because, by force of law, government always transfers capital from the more efficient private sector to the less efficient public sector.

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[1] O’Brien, Jerry, “The Netflix Effect,” Wired Magazine, Issue 10.12, December 2002, also accessible via web at http://www.wired.com/wired/archive/10.12/Netflix.html , last accessed 18 June, 2007.

[2] Blockbuster website: https://www.blockbuster.com/signup/s/howItWorks , last accessed 18 June, 2007.

[3] Class assignment; Short Term Paper, Topic Two Topic 2: Economics of Information and the impact of Blockbuster Model on Libraries, LIS-KM 5033, University of Oklahoma, Summer 2007.

[4] Swanson, Tim; Will the University Survive? The Ludwig Von Mises Institute, accessible via web at http://www.mises.org/story/2013, posted on 25 January, 2006; last accessed 20, June 2007.

[5] Audunson, Ragnar; The public library as a meeting-place in a multicultural and digital context : The necessity of low-intensive meeting-places; Journal of Documentation (J. Doc.), vol. 61, no3, pp. 429-441, 2005. Abstract accessible by web at http://cat.inist.fr/?aModele=afficheN&cpsidt=16800531, last accessed 18 June, 2007.

[6] Ellish, Jill; Library funding for disaster, government services long overdue, Florida State University News, quoting John Bertot, FSU College of Information Professor, accessible by web via http://www.fsu.edu/news/2006/09/25/library.funding/ , last accessed 18 June, 2007.

[7] Colannino, Joseph; Combustion Modeling, A Practical Approach, CRC Press, accessible via web at http://books.google.com/books?id=h-IqbdHvA1QC&pg=PP1&ots=wLs0xMok_6&dq=colannino&sig=cn9xzIF189F_cf4qILunPc8AyHM#PPP1,M1, last accessed 18 June, 2007.

[8] Google Books Beta site, http://books.google.com/bkshp?tab=wp&hl=en&lr, last accessed 18 June, 2007.

[9] Avis car rental with a credit card: http://avis.com/AvisWeb/home/AvisHome, last accessed 18 June, 2007.

[10] University of Pennsylvania online book site: http://onlinebooks.library.upenn.edu/, last accessed 18 June, 2007.

[11] Net Library online book site for subscribers: http://www.netlibrary.com/, last accessed 18 June, 2007.

[12] Dysart, Jane I., Why Libraries Fail and tips for staying alive, published online at http://www.dysartjones.com/presentations/feliciter_51_3_theme_feature_dysart.pdf , last accessed 18-June-2007.

[13] Thorton, Jane K.; Job Satisfaction of Librarians of African Descent Employed in ARL Academic Libraries, available online at the ALA website: http://www.ala.org/ala/acrl/acrlpubs/crljournal/backissues2000b/may00/thornton.pdf , last accessed 18 June, 2007.

[14] Nader Ahmad Abu Sheikhaa and Abdul Razeq M. Younisb , Administrative factors affecting employees absenteeism in academic and public libraries in Jordan, The International Information & Library Review Volume 38, Issue 2, Pages 64-88, June 2006, Elsevier, Paris, available by web as of 24 April, 2006 at http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6WGP-4JT38RW-1&_user=10&_coverDate=06%2F30%2F2006&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=92dd0fa00528065b7774477f99985064, last accessed 18 June, 2007.

[15] Rockwell, Lew; Sell the Public Library, http://www.lewrockwell.com/rockwell/libraries.html, last accessed 18 June, 2007.

[16] The following website (Web Junction) has an excellent summary of searchable nationwide library statistics by state: http://webjunction.org/do/DisplayContent?id=13268, last accessed 20 June 2007.

[17] Ibid Reference 16 using a population weighted average for all reported Oklahoma public libraries.

[18] The State of American Libraries, p 3, American Library Association, April 2007, available on the web at http://www.ala.org/ala/pressreleases2007/march2007/SAL_AnnualReport-FINAL.pdf, last accessed 22 June, 2007.

[19] Search Engine Watch website: http://searchenginewatch.com/showPage.html?page=2156461, last accessed 20 June, 2007.

[20] U.S. Census Bureau popwatch website: http://www.census.gov/main/www/popclock.html, last accessed 20 June 2007.

[21] Autobiography of Milton Friedman, Noble Foundation, available on the web at http://nobelprize.org/nobel_prizes/economics/laureates/1976/friedman-autobio.html

[22] Hoover Institute Interview of Milton Friedman, Hoover Digest, available on the web at http://www.hoover.org/publications/digest/3507421.html, last accessed 22 June, 2007.

[23] Ibid Ref 18, p 6.

[24] Griffiths, José-Marie, et al.; Taxpayer Return on Investment in Florida Public Libraries: Summary Report, September 2004, Prepared for State Library and Archives of Florida, available on the web at http://dlis.dos.state.fl.us/bld/roi/pdfs/ROISummaryReport.pdf, last accessed 22 June, 2007.

[25] Federal Minimum Wage, Department of Labor, available online at http://www.dol.gov/dol/topic/wages/minimumwage.htm, last accessed 22 June, 2007.

[26] Florida labor market website: http://fred.labormarketinfo.com/analyzer/labforcedata.asp?geo=1201000000&tableused=LABFORCE&cat=LAB&session=LABFORCE&subsession=99&rollgeo=04&sgltime=0&time=20070305&adjusted=1&areaname=Florida, last accessed 22 June, 2007.

[27] Tom Peters’ website may be found at http://www.tompeters.com/, last accessed 22 June, 2007.

[28] Tom Peters as quoted by M.W. Hodges, available online at http://mwhodges.home.att.net/state_local.htm#spending, last accessed 22 June, 2007.

[29] Friedman, Milton; Why Government is the Problem, Hoover Institute, February 1993, available online at http://www.hooverpress.org/productdetails.cfm?PC=142 , last accessed 22 June, 2007.