Freemium (or should libraries charge for services?)
Who doesn’t like to get something for free? Whether we are talking about giveaways at a restaurant opening or free information on the Internet, everyone loves the idea of getting something for free. A marketing strategy and business model that relates to this idea is the concept of “freemium.”
Freemium is a way businesses get users or consumers in the door with free products or services, as a way to market their enhanced, premium-priced services. Free + Premium = Freemium. Just recently in Publishers Weekly (May 18, 2009), Chris Anderson, author of Free: The Future of a Radical Price was interviewed about newspapers (specifically News Corp) charging for online content. In July, his book will be offered for free online from Hyperion. In the book, Anderson looks at how so much of what is already online is available for free. In the interview, he discusses how companies use free content to market their paid content. Other supporters of this business model view it as a way to attract customers and generate buzz. An example from the business world is Adobe launching a free, web-based version of its popular Photoshop software. Adobe then hopes that the free version will entice consumers to purchase the full software package.
How does the freemium model apply to libraries? I’m not entirely certain of the long-term implications but it does seem to me that libraries that are implementing additional fees for services that go beyond the normal scope are taking advantage of this freemium business model (free for some services, pay for value-added services). Libraries are facing tightening budgets and I understand the need to generate revenue other than fines and regular fees. People talk about the public library as being “free” and in a way, it is free because library users pay for those services through their tax dollars.But as Nancy Dowd of The ‘M’ Word – Marketing for Libraries blog stated back in February, why not create a line of premium services for which to charge? The basic services that people have come to expect from the library would remain “free.” But individual libraries could choose to offer services above and beyond, like research services and books by mail, and charge a fee for those premium services.
Lately I’ve been hearing about libraries who are already starting to charge for some of their services, due to budget shortfalls and other funding constraints. But it makes me wonder about what criteria libraries are using to decide which services are the ones that should be paid for by the patrons.
For instance, look at the Dallas Public Library’s Street Smart Express service. Dallas PL is charging for high-demand items, like best-sellers, hot DVDs and audiobooks. The Assistant Director cited 2 main reasons for the fees: To limit wait times and to limit the number of holds on an item. Not all items are part of this special collection and a patron could choose to wait to borrow the item once it is out of the collection. Read more about it here.
Another library charging for services is the East Brunswick Public Library. My sister, who is a frequent library user and avid reader, was dismayed to read in her local paper that the library planned to start charging for every reserve placed. She did the math and realized that the average cost for the reserves she places per year would total over $100.
These are just 2 examples of providing fee services above the regular “free” services or starting to charge for once free services, but I am sure there are more.
So where and how do libraries decide which services warrant a fee? In the examples listed above, Dallas selected a new service that has the potential to speed up the usual library experience. Give the patron what they want NOW. On the other hand, East Brunswick started charging for a service that in most libraries is free. What message are we sending to our patrons if we start charging them for something that they never had to pay for before? And how much damage are we doing to our user base to start charging for these services that have traditionally been free? If my sister is any indication, the potential damage is significant. She even considered getting a card in another library, farther away from her house, less because of the money and more because of how upset it made her. Other patrons may just choose to not use a library at all.
Charging for services that have long been free, especially now as the general public is feeling the economic crunch, could ruin a library’s good will and support base. If your library must start charging, find a way to add some value to that service to make it “premium.” Or follow Dallas Public Library’s example and offer the paid service as an option, not a mandatory fee. It is never easy for librarians to decide to start charging for services. However, I think that its not a bad idea to charge for services that are “premium” to YOUR library users. Which services those are will depend on what services your patrons use and which ones your patrons would like to have that you aren’t already offering. But make sure they are value-added services.