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Originally Posted by rogue_librarian
If they do have different collections it would be necessary to keep track of which books are loaded on what Kindle, store them securely and safely, retrieve the correct one from storage, make sure they work OK upon return... then there's service and maintenance, they need to be charged periodically (give the user a charger?), broken ones need to replaced, new books be added... I don't see why it couldn't work on a small scale, but it'd require somewhat more effort, I think.
And, yes, sometimes libraries do need to acquire lending rights in addition to just obtaining the actual books or media so there's all kind of legal issues I see, too; depending, of course, on your jurisdiction as usual. Does Amazon's license agreement allow for that? I don't think so, for what that's worth.
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It would make sense if Amazon made a "Library Kindle". No 3G or WiFi on it. The librarian would be the only person who could load content onto it. Then you just load it with whatever books the patron wants.
It would be a similar process to the magnetic keys used by hotels. They have a stack of blank keys, and program it with your room number when you check in. A library could keep a stack of blank e-readers, and load the books you want to check out onto them. No need to track what e-reader has what book on it.