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Picking up where Jane Friedman, book publisher of Open Road Integrated Media, left off yesterday at Digital Book World, when she urged book publishers to broaden the participation of libraries in the distribution of ebooks, LJ’s Josh Hadro moderated a panel today that helped publishers understand why, and how, that must be accomplished.

“Consumers and library patrons are two sides of the same coin,” Hadro said to a roomful of publishers, who included execs and others from the big children’s book publishers, smaller houses, university presses, and distributors. The current one book, one loan ebook model “mirrors the print” buying and lending; “DRM [digital rights management] software [protects publishers] caus[ing] the lend to expire at the end of the loan period,” explained Hadro.

Yet many publishers still don’t sell their latest ebooks to libraries. “Current content is king,” New York Public Library’s Chris Platt said, pointing out his frustration that, “We can’t get Freedom (FSG) as a download for our library. And even though Keith Richards made a public appearance at NYPL, “We couldn’t put his epub [Life (Little, Brown)] in our collection,” said Platt. Then Platt held up The Oracle of Stamboul (HarperCollins), due out in February, another book his patrons won’t be able to borrow as an ebook.

Librarians are left trying to explain to their users both that the publisher has not made the book available through the library and that many ebooks won’t work on their users’ ereaders.

Platt further made the case that “We teach people literacy…we point [them] to your new books….Libraries are connected to many of the people you want to reach, on Twitter, Facebook.” As the price of smartphones drop, he said, libraries will be able “to serve all parts of the community.”

Ruth Liebmann, Random House VP, reinforced Platt’s remarks. “A sale is a sale,” she said, noting that libraries are a revenue stream that publishers like Random want to “protect, even grow.”

Baker & Taylor’s VP for libraries and education, George Coe, told attendees that the “acquisition model will change drastically” with the ebook. “Library budgets can’t change,” he said, but users can become buyers with “buy buttons” on library online catalogs. He cautioned, however, that by using different formats, christian book publishers are “confusing our patrons.”

OverDrive’s CEO Steve Potash also said that the idea of a library purchase “cannibalizing sales couldn’t be farther from the truth…we’re converting library borrowers into point of sale users” in the digital world. As for the one book, one user model, Potash said that OverDrive recently made Liquid Comics ebook graphic novels available via a multiple user subscription model.

For the book publishers and authors perspective, Borders was once a worthy rival to Barnes & Noble. Perhaps even bigger than B&N. The two brick-and-mortar chain bookstores were able to offer better prices than independent bookstores and drove many out of business. But that was before the success of Amazon and other online retailers brought the phrase “brick and mortar” into regular use — and once that happened, everything changed; indeed many UK book publishers watched in horror last year the UK divison of Borders hit the wall.

Barnes & Noble, if buffeted by Amazon’s success, has remained afloat; Borders has been taking on water.

On Dec. 30 Borders announced it would not make payments owed to some publishers, without specifying whom. Hachette confirmed that it was among those who would not be paid by Borders.

Borders has nearly 200 Waldenbooks and Borders Express outlets slated for closure before the month of January is out. Additional Borders stores are also set to close, including Westwood’s.

Borders is also cutting back on staff. On Wednesday, Borders announced that it would close a distribution center in Tennessee, eliminating more than 300 jobs; 15 management positions were eliminated Friday. And the resignation of two top executives — the chief information officer and general counsel — was announced at the beginning of 2011.

Meanwhile, Borders is seeking to restructure its debt like the frantic chess of a brutal endgame. On Thursday, Borders met with publishers and proposed that the payments owed by the bookseller be reclassified as a loan, as part of that refinancing. “But on Friday, publishers remained skeptical of the proposal put forth by Borders,” the New York Times reports. “One publisher said that the proposal was not enough to convince the group that Borders had found a way to revive its business, and that they were less optimistic than ever that publishers could return to doing business with Borders.”

Nevertheless, Borders — which lost money in the first three quarters of 2010 — remains the second-largest bookstore chain by revenue. Its loss would have a significant effect on book publishers across the United States.

Investors, however, seem cheered by the recent news swirling around Borders. Shares rose 12% on Thursday after reports that the bookseller was close to securing financing.