Owners of ebook readers have been known to complain about restrictions on sharing their electronic books. Until recently, neither the publishers nor the retailers supported or encouraged it. On Dec. 30, 2010, Amazon announced the Kindle Lending Club, following in the footsteps of Barnes & Noble’s LendMe feature for the nook. Enter eBookFling from BookSwim. BookSwim positions itself as “America’s only Netflix-style book rental service.” The eBookFling offering, which was announced on Jan. 25, will serve as a "virtual ebook swap website."
Using the lending features offered through Amazon for the Kindle and Barnes & Noble for the nook, eBookFling facilitates book sharing between consumers. At present, the sharing function is disabled. According to public relations representative Anna DeSouza, “Right now we are building our ‘library’ so when we fully launch eBookFling subscribers will have a bevy of books to choose from.” De Souza projects that actual lending capabilities are “most likely a few weeks off.”
Credits are the currency of this sharing enterprise. Borrowers and lenders earn credits through listing and lending. They can then use these credits as currency for borrowing. Lenders earn one credit for every five books they list and one credit each time they loan a book. Borrowers pay one credit each time they borrow. The download transaction goes through either the Amazon or Barnes & Noble website.
So how does eBookFling owner, BookSwim, make any money off of this enterprise? Well, creditless borrowers can pay $1.99 to borrow a book. BookSwim CEO George Burke, quoted by Portfolio.com, also suggests that encouraging borrowers to ultimately buy the book through either Amazon or Barnes & Noble offers the possibility of revenues through commissions. The borrower gets 14 days with the ebook. After that it disappears and returns to the original owner. Owners can lend a book only once.
Not all books can be shared. Eligibility for sharing will depend upon permissions from the publisher. At this point publishers do not have the option with retailers to set the terms of lending (1 day, 1 month, or five people for instance). They either set lending on or off. Blogger Bobbi L. Newman, Librarian by Day, calculates that she has 125 items on her Kindle and, of those, she paid for 18 titles. "Of those 18 I can lend 1, which is 5%." A blog reader commented that she had 22 books on her nook and eight (36.6%) are lendable.
A quick read of the Amazon comments related to the recent launch of sharing capabilities among Kindle owners indicates that customers don't take kindly to publisher-imposed limitations. Users assert that they should have the same freedoms to share an ebook that they are accustomed to with print books. Analyst John Blossom of Shore Communications Inc. acknowledges that "publishers are very anxious about the lending pf electronic books" in spite of the long history of sharing print copies. Clearly aware of this reluctance on the part of publishers, people at eBookFling attempted to deflect objections with a preemptive explanation in its press release. While publishers may worry that ebook sharing could diminish new book sales by half, they should rest assured that 14 days won’t be enough time for most readers to finish a full-length novel. This statement seems to assume that the borrower might then buy the book in order to finish reading it. Furthermore, the press release states, “[N]ew or self-published authors love when books are shared because it increases exposure for the author.” eBookFling suggests that publishers and authors should view book lending as a marketing tool.
Analyst Blossom might agree. Acknowledging that, while publishers have enabled sharing, “They are not necessarily ready for third parties facilitating markets that match a broader array of potential lenders with book purchasers,” thus putting revenues at risk. Do the possible rewards of sharing outweigh the risks? Blossom would say yes. “Publishers need to get used to the idea that the most valuable asset they have is readers who engage their content and their authors and create social value for them.”
In launching LendMe and the Kindle Lending Club, Barnes & Noble and Amazon might have counted on the ability to manage or oversee these sharing activities. Third-party facilitators add another variable in the equation. EBookFling is not the first enterprise set to capitalize on this development. Booklends for Kindle and nook users is in private beta at this point and is currently collecting contact information of potential users. Brennon Slattery at PC World speculates that “if eBookFling takes off, Amazon and Barnes and Noble could either revoke lending privileges or alter their terms of service in such a way that sites like eBookFling cease to exist.”
In any case, initiatives such as LendMe, the Kindle Book Club, Booklends, and eBookFling create a secondary market for ebooks where there had previously been none. Time will tell whether the publishers, retailers, and readers will find a workable balance between sales and sharing. It may be in everyone’s best interest to try. As Blossom points out, “Viral marketing is smart marketing for online content, and book publishers need more smart marketing if they are to maximize the value of ebooks and related services.”