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Network Bulletin  No.:   08-39

Date:       October 10, 2008

Subject:    Digital talking books                                     
Index term:  Digital transition update

            
            
In its attempt to keep network libraries informed about the progress in making the transition to the digital
talking-book system, NLS is providing the following information.  Discussed are machine production and
its schedule, cartridge and container availability, and third-party purchase of cartridges and containers.

__Digital players__
In mid-June 2008, the Library of Congress awarded Shinano Kenshi/Plextor of Culver City, California, a
contract to produce the standard and advanced digital talking-book players.  When mass production
commences, Plextor, the electronic equipment division of Shinano Kenshi, will produce twenty thousand
digital players a month at a cost to NLS of $157 per player (including license fees).  NLS will receive the
first two pilot production players in December 2008 and two hundred units will be shipped for quality
review in early January 2009.  The first five thousand players will be distributed in February 2009.  Mass-
production players will arrive at machine-lending agencies in early May.

__Cartridges for digital books__
On August 22, 2008, the Library of Congress awarded Northstar Systems Inc. of Rancho Cucamonga,
California, a contract to manufacture USB flash-memory cartridges, which will be used to record
audiobooks for distribution to the NLS cooperating network for circulation to patrons across the country
and overseas.  

The initial contract funding of more than $6.2 million will enable Northstar to manufacture audio flash
cartridges on which NLS will record both new and existing titles over the next year.  The base contract
covers three years with a unilateral government option for an additional four years. 
            
Northstar is obligated to furnish participating libraries with blank cartridges at prices defined by a formula
in the contract.  Libraries may purchase one thousand or more pieces per order directly from the
manufacturer.  These third-party cartridges will be     a different color than those used by NLS and will not
have the "Property of the U.S. Government" notice.  Details about specific procedures for library and
individual purchases are being determined and will be announced when finalized. 

The cost of flash memory is quite volatile and has dropped precipitously in recent years. In order to benefit
from the long-term drop in memory price and to reduce manufacturer risk, the memory price component of
the cartridge is tied to the three-month average of the memory-market price (as listed on
DRAMexchange.com) prior to scheduled delivery.  The total cost for the cartridge comprises a fixed price
for the cartridge without memory and a market-pegged price, which fluctuates fortnightly, for the memory
component.  

Recently the cost of 512MB memory fell to a price close to smaller capacity memories.  Cartridges with a
capacity of 512MB (which will hold an NLS digital book that exceeds a reading time of 45 hours) represent
the best value to NLS and libraries during the current market climate.

Prices will vary based upon current flash-memory costs. Current memory prices would translate into
cartridge costs for libraries as follows:

Cartridge quantity   Capacity           Cost

1,000 pieces         512MB              $4.83 
5,000 pieces         512MB              $4.77 
1,000 pieces         1GB                $5.75 
5,000 pieces         1GB                $5.69 

Third-party purchasers are advised to check listings on DRAMexhange.com or to        contact the vendor
before ordering cartridges.  
 
NLS is still determining who the third-party vendors will be and will notify the network as soon as
agreements have been finalized.  Libraries that choose to purchase cartridges in quantities of less than one
thousand at a time will be able to purchase those from the identified third-party vendors. 
            
__Mailing Containers__   
LC Industries in Hazlehurst, Mississippi, was awarded the contract to produce the digital talking-book
cartridge mailing containers.  Plans are underway to make mailing containers available for network library
purchase.  The current projected price is $.70 each in lots of 220 plus shipping and handling.  These
containers will be identical to those used by NLS, except that they will be a different color and will not bear
the Library of Congress seal. Vendor contact information will be provided to the network as soon as it is
available.

For more information contact:     
Stephen Prine     
Assistant Chief, Network Division
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