Library lending of trade ebooks: How should it work?

We have here what is sometimes known as a wicked problem.

On the one side, communities would like to be able to pool the resources of their members to acquire digital content that may then be shared and consumed by everyone in that community.

On the other, content creators and publishers would like to maximize their revenue from the content they produce and distribute.

Libraries want to pay the least amount possible but still have the maximum rights to share it among their communities.

Publishers want to make sure every possible reading transaction is monetized, so as a result want to minimize the sharing rights of the people and organizations they sell their content to.

I don't know the answer to this question but I was hoping that the accumulated wisdom of the masses of my readers might have some good ideas and share them in the

What is the most fair library/publisher ebook business model or set of business models for mass market, non-academic books?

Some further reading, both posts by others that have inspired this post and some of my own previous ramblings:

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Over the last week or so a huge issue has sprung up in the library and publishing world, which I touch on in my eBook Users' Bill of Rights post. The publisher HarperCollins has restricting the number of checkouts an ebook version of one of their books can have before the library needs to pay for…
For my own purposes I've been collecting various ebook-related posts for a while now and in particular the whole HarperCollins/library/ebook/Overdrive thing is a valuable source of lots of speculation and information. What I have below no doubt only represents a fairly small percentage of the…
I was really angry riding home on the bus last Friday night. Not angry because the transit system here in Toronto is royally fudged in general or that transit to York University is fudged in particular. No, it wasn't that particular aspect of the public sphere that had me upset. It was the growing…
A while back I posted some semi-coherent ramblings inspired by the HarperCollins/Overdrive mess concerning how libraries were able to license ebook collections for their patrons. I'm not sure my ideas have changed or solidified or evolved or what, but I've certainly come to a slightly different way…

If the first-sale analogue people (Lawson, Jastram, LaRue, ...) have been arguing/working for was established as a digital principle, it would be a coherent baseline. Libraries wouldn't necessarily love the limitations and would look for more innovative deals; publishers would want to offer solutions / licenses that could make them more dough; but there would be a this-is-what's-basically-fair consensus, to guide everybody. Since popular books don't hold the same relationship to libraries that academic journals do (ie, large volumes of people actually buy them for personal consumption), there wouldn't be an out-of-control growth/price-increase spiral like with the serials crisis... because it would still be reasonable for plenty of people *not* to participate in such deals.

So far, I think the Colorado model (LaRue, Lawson, Jastram et al) is the fairest. I think it might even work for independent publishers, those tens of thousands of companies who really care about books and who I regard as a big part of the desirable futures of book publishing.

It may well be that the only way it can work is by assigning the idea of copyright to the dustbin we laid the Feudal system and Slavery in.

What's the point of a book published when you don't want the public to read it?

The only surefire way of ensuring a digital copy is only treated like a scarce and singular uncopyable work would be an imposition of a nanny on every eyeball and in every brain.

Not worth it.

Copyright is an agreement and this isn't an agreement, it's fiat decree.

So lets chuck it away like we did with the other ideas that stopped working.

Or keep with it and accept that it is mostly unenforceable in a digital age as long as nobody is making a business of it, where you have at least a chance (and a reason) to stamp out (in the case of people buying rippoff copies, they'd have spent the ticket prices on the original, hence an actual loss is proven).