I was given permission from EBL to post this case study on the financial importance of short-term loaning of ebooks. The study references Grand Valley State University in Michigan. It’s posted in it’s entirety below.
The Financial Importance of Short-term Loans: An Example from Grand Valley State University (GVSU) in Michigan
Prepared by David Swords, EBL
Note: The data for this case study come from Ron Berry of NYU in Abu Dhabi (firstname.lastname@example.org) and Doug Way of GVSU in Michigan (email@example.com). The information is used with their permission.
The subject of patron-driven acquisitions is getting considerable attention among academic libraries. A driving reason is that data show roughly 40 percent of the books libraries buy are never used. Mostly overlooked so far, however, is that of the books that are used, nearly 40 percent are checked out fewer than three times. EBL’s patron-driven approach that enables libraries to put records in their catalogue at no cost has proven a sound way to avoid buying books that no one uses. But EBL’s short-term loans address the second problem, books that are used sparingly, in a unique, and for libraries economically powerful, way. The case study described here is an actual instance of how valuable EBL’s patron-driven tools can be.
In four months from September through December 2009, Grand Valley State University (GVSU) had 2,269 transactions with EBL. All but 160 were short-term loans. The 160 were purchases.
Let’s do the numbers:
- Had GVSU bought 2,269 books at an average price of $74 US (which was the average price of the books that attracted transactions): 2269 X $74 = $167,906
- Actually, GVSU bought 160 Books: 160 X $74= $11,840
The remaining 2,109 transactions (2,269 – 160 = 2,109) were short-term loans in which EBL charges 5 to 10 percent of the list price of the book.
- Total cost of short-term loans = $20,382
- Total spent by GVSU: $11,840 + $20,382= $32,322
Savings by GVSU on its transactions with EBL = $167,906 – $32,322 = $135,584
In short, GVSU saved four times what it would have spent to make this material available had it used a traditional approach. Note that
- The preponderance of short-term loans at GVSU were one-time, sometimes two-time checkouts of books. By borrowing rather than buying, the library saved several times the cost of a book whenever a title was used only lightly.
- The short-term loan means the library had an additional $135,000+ dollars with which to give patrons access to other material.
- Paradoxically, by not spending their money buying books, GVSU became a better library, giving patrons access to a much larger collection than they could ever afford to buy.
EBL’s software tracks counter statistics, which are tallies of uses for which no charges apply. That is, for titles a library does not own, patrons have five minutes to browse before a financial transaction, either a short-loan or a purchase, registers. A look at the counter statistics for the four months being examined shows the following:
- 3,878 titles were browsed. At $74 per title, these would have cost $286,972 to purchase. Again GVSU allowed patrons access to a larger number of titles than they could buy and with no cost let the patrons decide which were useful enough to require a checkout.
- If you subtract short-term loans ($20,382) and auto-purchases ($11,840) from the titles browsed, then your achieved savings for four months would be $254,750.
One Last Huge Number
One more number deserves attention. GVSU loaded 50,000 EBL records. In effect, because the records cost nothing, it was possible to expand the universe to which their patrons had access by a factor of 25 over that which initiated a transaction that cost the library money.
- Had the library bought 50,000 titles at $74 each the cost would have been $3,700,000. This matches or exceeds the monograph budget of even the largest universities, but the $3,700,000 would have been only the beginning.
- That is, it would take years to add 50,000 titles to a traditional collection where tools such as approval plans are the machinery. In a situation where titles are being evaluated before committing to a buy, selector salaries and administrative costs are considerable. Put differently, GVSU gave its patrons the universe of titles of a large institution but did it quickly, because free records do not need close evaluation, and did it at a fraction of the cost.
GVSU has found that often when a selector wishes to buy based on a slip from an approval plan access to the book already exists through EBL as an on-demand record in the OPAC. When this happens, they do not buy the book, preferring to see whether a patron will choose to use it. The result is that the library spends less money on its approval material. The approach has proved favorable enough that GVSU now plans to add far more EBL records to its OPAC.