'Spotify for Libraries': Public Libraries Edge Toward Music Streaming Services

As more people stream and fewer buy, Netflix-like subscriptions look like the reasonable bet for tomorrow’s music marketplace — a way for suppliers to mimic Spotify without going the freemium route. Apple Music, set to begin charging users September 30, is often lauded as the brave initiator of this potential future, but well outside Cupertino, a smaller company has spent the past five years pioneering a similar model in one of the last places you’d expect: The public library.

The service is called Freegal, and in August the Watsonville Public Library opened an account. As long as the branch pays an annual fee, patrons can stream thousands of artists from nearly 30,000 labels, many under Sony Music’s large umbrella. Cardholders can log in from anywhere — they don’t need to be inside the library — and they’re allowed up to three hours of streaming per day and three free downloads per week.

“We wanted to offer patrons a way to access music online, so that they could freely and legally listen,” says Heather Geddes, Principal Librarian of Public Services in Watsonville.

She’s not alone. In the Bay Area, both the Santa Clara County Library District and the San Mateo County Library offer the service. They’re joined by 5,000 others in 20 countries, according to Brian Downing, CEO of Library Ideas LLC (which owns Freegal).

The company’s reach makes sense: Libraries have long offered physical CDs, cassettes and LPs — why not switch to a listening format that, for better or worse, matches the consumption patterns of those kids and their darn iPhones? But not every library supports streaming services. Because the institution’s historic mission has been about providing free, open access to information, the costs and exclusive label contracts that come with companies like Freegal have some librarians opting out.

Sarah Houghton is one of them. In 2011 she published an entry to her popular Librarian in Black blog titled “Just say no to Freegal.” Now the Director of San Rafael Public Library, Houghton says she still stands by that post.

“Since [streaming has] become more prevalent on the consumer market, libraries have wanted to provide those services to our users,” she says. “Unfortunately, very few digital providers will actually license their content to libraries, so the selection is pretty slim.”

Her issues with Freegal are twofold. First, the cost — Houghton says the last quote her library received was about $20,000 annually, which would have been half of its digital operating budget. According to Downing, a library’s annual fee depends on several factors, including population served and number of cardholders, and can range from several hundred to six figures a year. Watsonville’s fee is significantly less than the sum Houghton quotes, running at about $4,000 a year, according to Library Director Carol Heitzig.

But Houghton also takes issue with the company’s business model which, she says, doesn’t mesh with the way libraries have traditionally operated.

“The way public libraries have worked, and been able to be a very good return on investment, is that we buy something once and then multiple people get to use it — whether that’s a book that we loan out ten times or a computer that 20 different people can use throughout the day,” she says. “With services like this, what the library is doing is paying for a piece of content for our patrons to use permanently, so it’s not the same kind of multiplying effect.”

Geddes, however, argues that while issues of lending and ownership aren’t as clear-cut with digital products, services like Freegal are still an important part of the library’s evolving mission. Aside from music streaming, she says, Watsonville offers online classes — publicly subsidized sessions that patrons don’t exactly check out and then give back.

“When you transition to online, from eBooks to music streaming, you just see a variety of products that are a little bit different,” she says. “[Libraries] are feeling them out and trying to offer the services that meet the needs of our communities.”

Freegal isn’t the only company of its kind. Hoopla, offered by San Francisco Public Library, San Jose Public Library and several others throughout the Bay Area, serves 816 libraries across North America. Its pricing structure differs from Freegal’s — libraries only pay for content that patrons borrow, with fees ranging $.99 to $2 a pop for albums, eBooks and DVDs. According to Passion Hemphill, PR representative for the company, many libraries cap the number of borrows each patron is entitled to.

The services are similar in one respect: Both pay artists — though neither Hemphill nor Downing would specify a percentage. According to Hemphill, artists receive mechanical, PRO and label royalties through Hoopla.

“We make agreements with labels, and those agreements are confidential,” Downing says.

A scroll through Hoopla’s website reveals an extensive catalog, including the Weeknd, Lana Del Rey and Rihanna, with content partners ranging from Universal Music and Warner Music to Chicago-based indie label Alligator Records. Freegal, however, doesn’t just have the wider circulation — it also has Sony. Downing wouldn’t confirm that Freegal’s contract with the publishing giant is exclusive, but he did write in an email: “[Y]ou won’t find Sony Music in any other service.” A search for “Beyoncé” in Hoopla’s database, for example, brings up an eBook biography and a smooth jazz tribute to the pop star.

But while Freegal offers everything from “Crazy in Love” to the self-titled Beyoncé, its catalog lacks many artists signed to Universal subsidiaries. Beauty Behind the Madness, the Weeknd’s newest release, is one of the first featured albums on Hoopla’s site. But run a search for “the Weeknd” through Freegal, and you’ll come up empty-handed save for some Juicy J and Travis Scott features.

And that — the fact that artists are siphoned into different services according to their label — frustrates David Dodd, Collections Manager for the Sonoma County Library.

“We no longer have access to a full marketplace of materials,” he says.

The Sonoma County Library doesn’t yet subscribe to a streaming service, though Dodd says it’s considering various vendors. But in some ways, he, too, finds the available models incongruous with the library’s historic goal of free, wide-ranging public access. One reason is that with limited funds, few libraries can purchase all the services they would need to make up a well-rounded digital catalog.

“It feels like publishers are running scared and labels are running scared,” he says. “Of course creatives and publishers have a right to make money off their works, but the public library has long been a model for how to make sure that it’s not just the wealthy who can afford that music and art.”

“Everything is available on the web,” he adds. “But not everything is freely available on the web.”