Could an e-book rental marketplace help news publishers find a new source of revenue?

Here’s a question for which I haven’t been able to find a satisfactory answer: Where can I rent e-books?

The first few folks I asked snorted: Rent books? Why would you do that when you can get them for free from the local library?

My local library, like many around the country, offers an e-book program called Overdrive. But Overdrive offers a meager selection of books through my local library – and none of the recent releases I’m interested in reading.

Why not get the physical book from the library, then?

Well, for the same reasons that many others choose to buy an e-book over a physical copy: the convenience of the e-reader and the desire to avoid having to deal with a separate physical copy for each title.

Just because a book’s available for sale doesn’t mean my library has it available for me to borrow, either. Like in many communities around the country, my local library’s slashed its operating hours due to government budget cuts. Libraries are acquiring fewer books. Even a well-stocked, fully-funded library might not have enough copies of a popular new release to accommodate all the local residents who want to read it.

Inventory and distribution issues shouldn’t be problems for e-books. Want a copy of a new release right away? The server whips one up digitally and sends it your way. No waiting for the local branch to receive a copy and shelve it. No waiting lists behind other library patron who got there earlier.

As I see it, an e-book rental program could run in one of two ways: Along an iTunes model, where readers pay to download individual titles that remain “live” on their reader and available to read for a pre-set length of time… or, a Netflix model, where readers pay to download a set number of titles, that they can keep to read indefinitely. When the readers wants another title, they “give back” one of their current titles.

Either way would work for me, but the second model could provide some interesting opportunities for the news business.

Before I get to that, though, let me clarify an important difference between Netflix’s “subscription” model and what many folks think of when they hear the word “subscription.” I call it the difference between a subscription rental model and a subscription sales model.

Old copies of The New Yorker and Cooks Illustrated fill corners throughout my home. But I’ve got only three Netflix DVDs in the house. That’s because the magazines’ subscription terms sell me copies of their issues that I can keep forever. Netflix’s subscription only allows me to keep a DVD until I want another one, when I must return one of my current three. If Netflix had a subscription sales model like the magazines do, well, it’d be the old “record of the month” club instead.

It seems fair to me that, given the content being equal, a subscription rental model should cost less than a subscription sales one. That’s important to keep in mind as magazines move to the iPad and other digital e-readers. If they choose to implement a Netflix-style model where readers can see only the most recent issue, they need to choose a lower price point than their current one, where readers can maintain a personal archive of back issues. (I’d also argue that any electronic subscription should be priced lower than a print one anyway, given that hosting and bandwidth costs a publisher much less than printing and mailing.)

The reason I want to rent an e-book is that I’m sick of stacking and shelving dozens of printed books that I’ve bought and read just once. Nor do I want to clog my iPad with the same books, if I’m never going to read them again.

It’s making me risk-averse in choosing new books to read, which I don’t want to be. Reading should be an act of adventure and discovery. I’m trying to make more use of the library, but the lack of selection and availability of new releases has me looking for a more reliable alternative.

Renting e-books would allow me to sample more works, when I want them, and without the expense or the hassle of buying. I watch many, many more DVD and Blu-Ray movies at home using Netflix’s discs and online streaming than I would if I could watch only by buying discs, for comparison.

I’ve expressed skepticism that the iPad can help news publishers, absent a change in publishers’ attitudes toward their news product. But an e-book rental service could create an additional revenue opportunity for news publishers who would be willing to invest in upgrading the depth and quality of their reporting.

Every year, some top newspaper enterprise reporting projects end up as books. What if some newsrooms flipped the development cycle, and initiated some of their more extensive enterprise reporting projects as e-books, available for sale or for rent?

The book publishing market has shown much more strength over the past years than the newspaper publishing business. Book sales in the United States increased annually from 2003-2007, falling with the recession in 2008 and holding flat last year. E-book growth has been spectacular, as to be expected with emerging technology, showing a compound annual growth rate of 71 percent over the past seven years, according to the Association of American Publishers.

That makes sense to me. Even as my consumption of news online has sated my appetite for the commodity news I can find in a printed newspaper, I still keep buying books and magazines for longer, more detailed narratives. I happily pay for that content in print because I can’t find an alternative that’s better or cheaper (or both) online.

Newspapers might not now find much of a market for e-book versions of in-depth enterprise reports, due to consumer reticence to buy something unfamiliar. But what if there were a rental market which sparked an increase in e-book consumption the way that services such as Netflix and iTunes have allowed consumers like me to watch more and more and more rental video at home and online?

Of course, the news industry still would need to work through the important issue of how much a publisher would earn each time a reader rented one of its works through a subscription service, an issue that remains hot between some Hollywood studios and Netflix, for example.

But I wish that the news industry would quit wasting its time, energy and money pursuing concepts – such as paywalls – that the market has rejected, and instead try a model – such as e-reader rentals – that the market might actually embrace.