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netLibrary Launches Comprehensive Digital Library
Posted On April 12, 1999
netLibrary, an Internet start-up company in Boulder, Colorado, is hoping to revolutionize electronic publishing and the way people access books and information. Recognizing the need for speed in the Internet business climate, the company quickly gained investor backing, consulted closely with librarians during development, and has already signed up over 40 participating publishers, and has sales deals with five of the largest library consortia. netLibrary officially launched on March 29 (, offering libraries and their patrons "anytime, anywhere access to a comprehensive collection of reference, scholarly, and professional electronic books (eBooks) and information that can be viewed, searched, and checked out via the Internet. All patrons need is a personal computer with an Internet browser (version 3.x)."

netLibrary extends the concept of patrons borrowing from a library to a virtual collection in the digital environment, and can also encompass interlibrary loan. It also provides libraries with a new tool for their collection development strategies. Tim Schiewe, president and CEO of netLibrary, said: "The Internet has created an opportunity to revolutionize the traditional library system. It is netLibrary's mission to integrate the convenience, access, and capabilities of the Web with the familiarity and depth of content patrons find at their local or university library today." The log-on message reads, "Welcome to netLibrary. The World's Largest Collection of eBooks."

netLibrary is converting printed books to a proprietary electronic format—the eBook—that indexes every word in a digital book, storing them on netLibrary servers, and then converting them to HTML as users request them. netLibrary has over 2,000 titles available today and expects to have 8,000 to 10,000 titles by the end of 1999. According to Woody Palasek, executive vice president, field operations, the company is digitizing 30 to 50 books per day. Initially, netLibrary is focusing on reference, scholarly, and professional books to meet the demand for higher-education and distance-learning curricula.

netLibrary has signed agreements with many leading publishers, both academic and commercial, including Cambridge University Press, Harvard Business School Press, Macmillan Reference Ltd. St. Martin's Press, McGraw Hill, MIT Press, and many others. netLibrary negotiates for subsidiary rights to create electronic versions, and charges publishers nothing for building the electronic books and marketing the titles. Publishers receive a negotiated payment per book purchased and are provided with usage data on what titles, chapters, paragraphs, and sentences are being referenced. Frank Urbanowski, director of The MIT Press, said, "This new service will provide us with additional distribution channels and revenue streams through the sale of eBooks."

Users can search for eBooks by author, subject, title, key word, phrase, or idea. An eBook may be checked out, viewed online, or viewed offline by downloading to the user's computer using Knowledge Station software. Knowledge Station, a Windows client viewer, may be downloaded free from netLibrary, and allows users to view and annotate text with highlights, notes, and bookmarks. If a book is already checked out, users can queue for it and be notified when it is available. Like a traditional library, netLibrary's patent-pending technology ensures that only one person can use one eBook copy at a time. If a library or organization has purchased 10 copies of one title, then only 10 people at a time may view that title. netLibrary's collection development department works closely with libraries to obtain titles that are most frequently used by patrons.

Users are allowed to copy or print single pages of information, and are given on-screen copyright warning messages if this is exceeded. A user who ignores warnings will be kicked off the system and restricted from using the service. According to netLibrary, its advanced security technology includes controlled user access, encryption, watermarking, usage limitations, and automatic return of borrowed materials.

The netLibrary service also provides a number of public domain titles free to users. And, from the service's home page, there's a link to an online bookstore for purchasing eBook titles. They may be stored on a personal bookshelf at netLibrary or downloaded. According to Palasek, the average book takes about 3 to 5 minutes to download with a 28.8-baud modem; more complex titles can take 20 to 30 minutes. Large reference books will be segmented into smaller chapters. In addition, logos for and will link users to those sites for purchasing print titles. It will be interesting to see whether the mega-bookseller sites will ever link back to netLibrary for eBook purchases.

Participating libraries benefit by eliminating overhead and infrastructure costs associated with book storage, maintenance, and replacement. Palasek estimated that the cost of handling an eBook was 25 to 50 percent less than the cost of handling a physical book, and purchase costs for eBooks are equal to or lower than those for regular books. Libraries also receive usage reports from netLibrary that help them to better assess, manage, and develop their collections.

In late February, libraries in the University of Colorado library system (including CU/Boulder, Auraria, and CU/Health Sciences) were the first to access the new electronic book system. This was followed by the other libraries in the Colorado Alliance of Research Libraries. Other charter customers for netLibrary include members of the nation's major library consortia, including OhioLINK, PALINET, The University of Phoenix System, and The University of Texas System. This group of consortia represents more than 2 million patrons in the United States. The staff of netLibrary worked closely during the development of the service with many librarians, including Dr. Lynn S. Connaway, a leading library educator. According to Palasek, they will be establishing an advisory board of librarians, educators, and publishers.

Tim Schiewe, a 20-year veteran of the technology and electronic publishing industry, co-founded netLibrary, Inc. in 1998. It grew out of a company called Infomaster that provides banking reference information on the Web (, which was then funded for expansion and became Interactive Knowledge, Inc. The name has now been officially changed to netLibrary, Inc. The company has quickly grown from eight employees in July 1998 to 140 now. It expects to grow to as many as 500 as it adds new customers and expands its services.

Looking to expand beyond libraries, the company plans to make the service available later this year to individuals. A "reasonably priced" membership fee, expected to be well under $100, will allow individual borrowing privileges.

The netLibrary system is currently capable of handling 1 million users per day, and will be scaled to a capacity of 1 million transactions per hour and 10 million users per day. The company maintains multiple Web servers, with emergency back-up power, to ensure maximum uptime. Palasek said they are working on the prototype of a value-added multimedia service that will add links to audio and video.

netLibrary eBooks are currently not compatible with hand-held electronic book readers such as the Rocket eBook and the SoftBook. However, a company representative said they would be "talking with both publishers and manufacturers to become a content provider for developers of portable readers."

While electronic books are certainly not new, netLibrary has the distinction of being first to market with this new distribution concept, and it has brought all the necessary acquisition, circulation, usage, and security technology pieces together. They intend to take full advantage of that distinction and opportunity. We would expect to see the list of participating publishers grow rapidly, and an eager stream of library consortia buy into the electronic access opportunity it represents.

Paula J. Hane is a freelance writer and editor covering the library and information industries. She was formerly Information Today, Inc.’s news bureau chief and editor of NewsBreaks.

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