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Libwise: The Fictionwise eBook Library Solution White Paper Version 5.1 January 2003 TABLE OF CONTENTS Introduction ................................................................................................................................................ 2 Libwise Model of eBook Support for Libraries .......................................................................................... 2 Libwise Features and Functions for Library Staff ...................................................................................... 3 Library Administrative Console ............................................................................................................. 3 Patron Experience ................................................................................................................................... 4 Summary .................................................................................................................................................... 4 APPENDIX: LIBWISE PRICING ................................................................................................................. 5 Introduction Fictionwise is one of the top eBook retailers in the world, with a sales volume currently at 16,000 units sold per month and growing at triple digit annual rates. The Fictionwise web site offers eBooks in up to eight different formats for all types of handheld devices and computers, and currently has about 70,000 registered members. Fictionwise was founded in June 2000 and is privately held. Fictionwise has leveraged this extensive knowledge of satisfying the eBook reading public by designing a new product for the library market--Libwise. This white paper presents an overview of Libwise, including a discussion of the features the product offers, and details on how the Fictionwise eBook Library model operates from the point of view of the Library Administrator, the Patron, and the Publisher providing eBooks in the product offering. Libwise Model of eBook Support for Libraries The Libwise model offers libraries a very economical way to build their eBook offerings while at the same time compensating publishers fairly for use of their material. Libwise eBooks can be viewed on all major handheld devices and PCs with the Secure Mobipocket Reader, and support for the Secure Palm Reader will become available in 2Q03. Both of these formats support all major PDAs as well as PC reading, provide strong encryption, and support a time-out model specifically for library usage. The key features of the Libwise lending model are:  Financial Model: The library pays monthly service fees based not on number of patrons or size of the collection, but on expected number of check-outs per month. eBooks are acquired by the library at normal retail price. The service fee provides the library with a customized, branded web site hosted by Fictionwise, all patron support is handled by Fictionwise, and the library receives one or more administrative logins to manage their holdings, generate statistical reports, and perform other operations. Basing this price on anticipated patron usage as opposed to the total number of patrons is much fairer to the library, and allows large libraries to try the service out for a minimal fee. See Appendix A for current pricing of monthly service fees. Handheld Device Support: The Fictionwise model supports all major handheld devices as well as PC reading for every title (with Macintosh support available in 2Q03) using Secure Mobipocket eBook format and Secure Palm Reader eBook format, which both provide a time-out model. An in-library beaming feature using commonly available IR is also supported. This allows a  (2) library to loan eBooks to patrons by beaming the encrypted eBook from a PC with an IR port located within the library. The eBook is encrypted so it is only readable on that patron's device. Using an IR port avoids the need for multiple "cradles" for the many types of handheld devices. Patrons may also download eBooks from the hosted Libwise site directly to their handhelds from their homes, offices, or schools using either cradles or IR ports.  User Borrowing Model: The Fictionwise model supports different forms of "Lending Terms" that may be offered by the publisher. Some Lending Terms enforce a one-patron-at-atime model via a time-out mechanism. Other lending terms may allow simultaneous patron usage but might restrict the eBook to a certain number of total check-outs. The terms are offered in the administrative screen used to acquire material. It is up to each Library to decide what Lending Terms they are willing to accept. It is also possible for a publisher to offer the same title(s) under different lending terms to see which ones are more amenable to selling the title. eBooks are encrypted with a time-out period set by the library administrator; each eBook can have a different time-out period, or the same time-out period can be applied to all the eBooks in a library. When the time-out period expires, the eBook becomes unreadable on the patron’s handheld device. There is no need to "return" the eBook, it becomes available for the next patron as soon as it expires. If an eBook is not available, a patron may choose to waitlist for it. When it becomes available, the eBook automatically moves into the patron's "bookshelf" for download, and an email informs the patron of availability.  Donations System: The Libwise model helps the library self-fund the eBook part of their offerings through automation of patron donations. The library administrator can turn this feature on or off; if enabled, the feature will display a "Buy to Donate" button whenever a patron tries to borrow an eBook that is not available (the patron may also choose to be placed on a waitlist). If the patron buys the eBook, then that patron gets a longer than usual initial check-out period (perhaps four weeks instead of two weeks) and after expiration of the eBook, that copy is automatically donated to the library's collection. The Libwise system tracks such donations and patrons may run a report to find their total donation amount. If the library is a qualified not-for-profit institution, then such donations may be tax deductible to the patron. The patron may also donate cash to the library, which the system tracks. Libwise Features and Functions for Library Staff Library Administrative Console The library may designate one or more administrators to perform the following operations using special logins and screens from any ordinary browser connected to the Internet:  Generate reports on content usage, average waiting times, most popular titles, credits available from purchase fees, number of eBooks and cash donated over time periods, most popular eBooks, suggestions for further acquisitions, etc. Control various parameters, such as check-out time limits, whether donation is allowed, whether offers to purchase are allowed for checked-out eBooks, etc. Check-out time limits may be different for each eBook or controlled by a global default.  (3)  Purchase new content. The system supports easy searches for material by classification, author, length, and other parameters, with easy ability to purchase either single or multiple copies of each title. Patron Experience Patrons use a full-featured interface accessible via any standard web browser:   Graphics are customized for each library. The library administrator also controls many other aspects of the look and wording used on the site. Patrons must login using an ID that the library assigns them, typically their existing library card number. If a library has login validation on their own IPAC, Libwise can be set up to query that login screen remotely to validate each user by library card number/PIN (or password). If the library lacks an existing IPAC validation scheme, Libwise may be configured to validate in-library check-outs using an IP address range, or may be set up to use passcodes configurable by the library staff to validate patrons. Patrons may search based on availability, author, title, keyword, or category of eBook, and may also browse titles by category or author. If a title is not available for check-out, the system will offer to put the patron on a waitlist for the material. When the item becomes available it is automatically moved to the patron’s bookshelf (see below) and an email will be sent to the patron informing them of the availability of the desired title. Each patron has a "bookshelf" that shows all current waitlisted and borrowed titles, and also contains eBooks they have purchased, if any, allowing them to redownload the eBooks in case they ever lose the files. A report is available to the patron showing their total donations over any time period (if the library has enabled donations).    Summary Libwise seeks to draw from and balance other existing eBook library models in a way unlike other current market offerings. Libraries will find that the Libwise model is a cost-effective way to start a comprehensive eBook offering for their patrons with minimal expense that scales as their needs scale, and without the burden of technology support. The monthly access fees are also much lower than fees from other offerings in the market today, in some cases lower than a typical cell phone plan for a single individual. (See Appendix below.) Patrons will appreciate the flexibility of being able to read the eBooks they borrow while off-line from the Internet, or on any popular handheld device such as Palm, PocketPC, Psion, Epoch, and even Nokia Cell phones. Patrons will also find it easy to search and browse for content, with the flexibility to be placed on a waitlist if a particular eBook is checked-out by another patron. We believe this model is a major advance in the industry, offering fair value for all parties involved, and allowing libraries to rapidly deploy eBook materials for their patrons in a convenient and cost-effective way while stimulating volume eBook sales for publishers. (4) APPENDIX: LIBWISE PRICING PLAN NAME Starter Plan Small Library Plan Mid-size Library Plan Large Library Plan Monthly Fee $29.95 49.95 79.95 139.95 Check-outs per Month 250 500 1,500 5,000 Cost per Additional Check-out 12 cents 9 cents 6 cents 4 cents NOTES: The monthly access fee provides the library with:     A hosted, customized web site to deliver eBooks to their patrons All support issues are handled by Fictionwise customer support All encryption services necessary to implement the time-out feature and management of eBooks on loan Access and logins to the library's administrative console, which allows customization of many parameters (such as check-out time periods, waitlists, etc.), administrative reports, as well as screens to purchase additional content. (5)

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