Below is an announcement that will be sent to all netLibrary customers by
the close of business today.  Thank you for posting this information on the
FEDLINK listserve.  Any FEDLINK libraries that have questions about this
announcement are welcome to contact me directly:

Jami Lichtman
Sr. Manager, Channel Partners
[log in to unmask] <mailto:[log in to unmask]>
1-800-413-4557, ext. 8748

Please note: I will be in DC for Computers in Libraries, March 12-15, and
would welcome the opportunity to meet with any FEDLINK libraries who are
interested in adding an eBook collection to their library.



Important News About Your netLibrary Account

February 5, 2002

Dear netLibrary Customer,

As you have undoubtedly heard, the sale of netLibrary to OCLC was completed
on January 25, 2002. We now look forward to working with OCLC to continue to
bring you the finest collection of eBooks as well as a host of excellent
support services to benefit both you and your patrons.

A number of goals will be at the forefront of our efforts for the immediate
future. Among these are: reinstating several services that had been
temporarily put on hold; working to ensure a smooth integration with the
OCLC organization; coordinating efforts with our publisher community to
reinstate the flow of new content; and listening to your feedback through
our own Advisory Council as well as OCLC's committees.

We believe the future for netLibrary as part of the OCLC organization is
indeed bright. eBooks are an excellent fit with the OCLC vision for
expanding global access to the world's information. However, several
important steps are necessary to ensure a strong and stable future for
netLibrary eBooks. The first of these steps required a hard look at our
business model and our ability to sustain the service levels required to
meet library and patron demand. The result of that review is a decision to
raise prices on the portion of eBook fees that covers costs to host, serve,
and maintain your collections; to develop and enhance online collection
development and acquisition tools; as well as to provide support in the form
of help desks, online training and support, and marketing and promotional

The following document will outline the changes to our pricing structure
that will take effect on April 1, 2002. If needed, you may also access this
document by going to the following link where you will find the same

We thank you for your support of netLibrary and your continuing enthusiasm
for eBooks and the opportunities they provide to support patron needs. As
always, we welcome your questions and comments.


Rob Kaufman,

eBook Access Payment Options

On January 25, 2002 OCLC Online Computer Library Center, Inc., acquired the
assets of netLibrary, Inc. As both organizations look toward implementation
of a strong and stable business model, this document will serve to clarify
terms and definitions for eBook access payment options going forward.

All netLibrary eBooks purchased beginning January 25, 2002 will be delivered
based on the terms and conditions of one of the two access options defined
below at current pricing until April 1, 2002 when new pricing takes effect
(see Pricing Schedule below).

The two access options being offered are as follows:

1. Prepaid Ongoing Access. This option is based on prepayment of service
fees that includes provisions for long term access.

2. Annual Service Fee. This option is based on an annual payment of service
fees covering only annual access provisions. The annual payment program will
include an option to convert to the long-term access, should a library
desire to do so at a later date.

The Prepaid Ongoing Access option replaces the Lifetime Service Fee
Prepayment option. The rationale for this change reflects the need to
develop and manage a business model that takes into consideration the
likelihood that technology will continue to evolve in ways that enhance both
netLibrary's ability to provide eBooks as well as the patron's experience
with using eBooks. Such changes cannot be known with certainty today and may
appear in the form of enhancements to existing technology, or the costly
full replacement of existing technology. This document seeks to outline
current thinking about likely scenarios that may result from the need to
adopt new platforms while ensuring libraries are provided with viable
options for long term access to their netLibrary eBook content.

netLibrary Prepaid Ongoing Access Option - Effective January 25, 2002

The former Lifetime Service Fee Prepayment option defined in existing
netLibrary contracts, or any other prepaid "perpetual access model" is no
longer being offered. Replacing it is the netLibrary Prepaid Ongoing Access
option, as described below. Contracts currently in force under the Lifetime
Service Option will now become Prepaid Ongoing Access contracts, with no
additional charges assessed for titles previously purchased and covered by
that contract. Additionally, should a library choose to add new titles
during the period January 25, 2002 through March 31, 2002, access fees for
those purchases will be assessed at current prepaid access pricing i.e., 50%
of the retail cost of the title, payable one time. Effective April 1, 2002,
prepaid access fees will be 55% of the retail cost of the title, payable one

The Prepaid Ongoing Access option will continue to permit libraries to
pre-pay access fees at the time of eBook purchases. This option provides
libraries with ownership of the titles they have selected and continuing
access to those titles via the current electronic bookshelf technology (as
defined in existing contracts) in use by netLibrary, including upgrades and
enhancements that netLibrary may choose to implement. Access via the current
electronic bookshelf technology in use by netLibrary will continue for as
long as the technology in use reflects market adoption as well as the
availability of necessary vendor support for that technology. Should market
adoption and/or vendor support of the current electronic bookshelf
technology change, it may become necessary to adopt a new electronic
bookshelf technology. In that instance, it would become necessary to provide
libraries with options for either continuing access on a declining platform
and/or for migrating some or all of their eBook content to a new platform.
Were a technological change of this magnitude to occur, and depending upon
the degree of costs incurred to address the change, an additional assessment
could be required to ensure forward compatibility of a library's eBook

If the current netLibrary electronic bookshelf technology is superseded by
new technology, the following scenarios are possible:

a) Scenario: Current electronic bookshelf technology is fully superseded by
new technology, rendering current platform fully inadequate for eBooks.

Response: netLibrary and the libraries it serves fully adopt the new
technology for all purchases going forward from that point. At the library's
discretion, some or all of the previously purchased content could be
migrated to the new platform, which could result in associated costs for
doing so. However, to continue access to any previously purchased content,
the library would need to elect to migrate its content to the new platform.
Although such costs cannot be quantified today, planned research on changes
in technology for serving digital content will provide a forum for
cooperative decision making on this issue.

b) Scenario: Current electronic bookshelf technology remains viable, but a
Future technology offering improved functionality is introduced.

Response: netLibrary and the libraries it serves might fully adopt the new
technology for all purchases going forward from that point. Continued access
to prior purchases using current technology could be provided, with the
understanding that no enhancements or upgrades to current technology will be

netLibrary Annual Service Fee Option - Effective January 25, 2002

Under this option, fees for access to titles purchased by a library are
based on a percentage of the total content purchase price and are paid
annually. Fee renews annually, as adjusted for new purchases that may occur.
Access to any titles not renewed at the end of a 12-month period from time
of purchase will not be accessible if renewal is not requested by the
library. Current pricing for the Annual Service Fee Option, 9% of the cost
of the title, remains in effect through March 31, 2002 when increased
pricing of 15% of the cost of the title takes effect on renewal of titles
owned as well as purchases going forward.

If the existing netLibrary electronic bookshelf technology is impacted by
new technology, the potential implications under this purchase option will
be the same as outlined in a) and b) above.

netLibrary eBook Price Schedule - Effective April 1, 2002*

1. Content Fees:

Content Discount Structure:

Based on publisher-specified retail pricing

Purchase Amount -- Discount Applied
$75,000-$199,000: 2%
$200,000-$499,000: 4%
$500,000-$749,000: 6%
$750,000 and above: 8%

Discounts applied to specific purchases will be based on the aggregate eBook
purchases occurring in a rolling twelve-month period.

2. eBook Access Payment Options

a. Prepaid Ongoing Access Option:
55% of the retail price of the content purchased, payable at the time of

b. Annual Service Fee Option:
15% of the retail price of the content purchased, payable at the time of
purchase and annually on the anniversary of the purchase.

c. Conversion from Annual to Prepaid:
Fees due based on prorated recognition of annual fees previously paid.

Content Support Services Includes:

         Hosting, serving, and providing library and patron access to the
eBook content purchased by a library, including the management of additions
and deletions to the library's collection(s) on an on-going basis.
         Use of the netLibrary search functionality, with upgrades that
netLibrary may choose to implement.
         OCLC eBook MARC records for all titles purchased
         Access to Houghton Mifflin American Heritage Dictionary, 4th
edition in all eBooks purchased
         Access to Library Resource Center, including reporting
functionality and the eBook Tool Kit for training, marketing and promotional
         Access to online collection development, acquisition, and
deselection tools
         Librarian and Patron Support

 *Prices subject to change with 60 days advance notice



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