August 23, 2014

Penguin Group Terminating Its Contract with OverDrive

From

Penguin Group(This story has been updated to include OverDrive’s email to its partners.)

In a stunning development, Penguin Group has extricated itself from its contract with OverDrive, the primary supplier of ebooks to public libraries.

Starting February 10, Penguin, which had recently instituted limitations on library lending for ebooks and audiobooks, will now no longer offer any ebooks or audiobooks through OverDrive.

“Looking ahead, we are continuing to talk about our future plans for ebook and digital audiobook availability for library lending with a number of partners providing these services,” said Erica Glass, in a prepared statement.

Penguin is negotiating a “continuance agreement” with OverDrive, which will allow libraries that have Penguin ebooks in their catalog to continue to have access to those titles.

But since the company does not have a contract with 3M, the still fledgling but growing competitor to OverDrive, the practical effect of the decision will be to shut down public library access to additional Penguin ebook titles (not physical titles) for the immediate future.

OverDrive could not be reached for comment, but an email sent to its partners has been posted at InfoDocket. It reads:

Starting tomorrow (February 10, 2012), Penguin will no longer offer additional copies of eBooks and download audiobooks for library purchase. Additionally, Penguin eBooks loaned for reading on Kindle devices will need to be downloaded to a computer then transferred to the device over USB. For library patrons, this means Penguin eBooks will no longer be available for over-the-air delivery to Kindle devices or to Kindle apps.

We are continuing to talk to Penguin about their future plans for eBook and digital audiobook availability for library lending.

Penguin thus joins Simon & Schuster, Macmillan, and Hachette among the Big Six publishers in search of an ebook library lending model.

In its November decision to not allow library lending of its new titles (via any vendor), Penguin had initially also targeted OverDrive’s relationship with Amazon as a particular concern, which led the company to demand that OverDrive disable the “Get for Kindle” functionality for all Penguin ebooks.

The company backed away from that demand, but the security concerns have likely never been allayed. When borrowing with a Kindle via OverDrive, the transaction essentially is removed from the public library and takes place under the terms that Amazon has worked out with OverDrive.

This “disintermediation” of the public library has also left some publishers feeling a bit left out in the cold, since the supply chain that has grown up around library lending of ebooks has evolved among other third-party commercial entities without much input from the publishers.

Penguin said it is not getting out of the library business, and that it was encouraged by the recent talks it had with the leadership of the American Library Association in New York City.

“In these ever changing times, it is vital that we forge relationships with libraries and build a future together.  We care about preserving the value of our authors’ work as well as helping libraries continue to serve their communities,” Penguin’s statement reads. “Our ongoing partnership with the ALA is more important than ever, and our recent talks with ALA leadership helped bring everything into focus.”

However, one upshot of those talks, as LJ reported, was publishers’ concerns that if library loans become too “frictionless,” in other words, do not involve a physical trip to the library to borrow and return a book, that it will eat into their sales.

The desire to increase this friction may lead the recalcitrant publishers to demand a business model in which they will only make their ebooks available to public libraries if they are used in the library or if a patron is required to bring their device to the library and load the title onto the device in the library, then bring it home.

This would essentially eliminate all the convenience of borrowing ebooks from a home computer or device.

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Michael Kelley About Michael Kelley

Michael Kelley is the former Editor-in-Chief, Library Journal.

Comments

  1. Scott Nicholson says:

    “We must protect our books from readers at all costs.”

  2. Carol Dolin says:

    I understand publisher concerns, but just as physical library books have a limited borrowing period, an eBook expires after one or two weeks under the Overdrive model. I find it hard to believe that people will stop buying books because they can borrow them too easily at the library.

  3. “Looking ahead, we are continuing to talk about our future plans for ebook and digital audiobook availability for library lending with a number of partners providing these services,” said Erica Glass, in a prepared statement.”

    Sounds like different publishers will go with different vendors…right? So maybe they will go through 3M instead of Overdrive. I feel like until Overdrive gets some competitors, libraries will continue to just get dragged through the mud. It will be good to get more players (and publishers) on board. Hoping that it what this means.

    • It’s not really Overdrive that is the problem, it’s the publishers. They won’t sell at all, since now they can stop libraries from benefiting users without profit.

      No one can stop a librarian from walking into Barnes & Noble and buying books for the library. But they can stop libraries from owning ebooks and “preventing sales”

  4. The reason the entertainment industry has had trouble with pirating is because they fought the digital format rather than use it. Has the publishing industry been looking the other way the last 20 years? It’s almost like they want people to steal their books.

  5. While I appreciate that publishers need to protect their bottom line, they are fundamentally misunderstanding the library user. I do not buy books. I do not buy ebooks. I do not buy audiobooks, either on CD or electronically. I get them from my library. My coworkers are not library users. They buy their books and download their ebooks directly from the marketplace. They are not interested in borrowing or downloading from the library because they don’t want to be limited to two or three weeks with the book.

    The idea that ebooks can only be downloaded/accessed/read in a library seems a bit ridiculous. First of all, most smaller libraries don’t have the bandwidth to accommodate such a system. Plus, patrons aren’t limited to reading print books only in the library so why should they be physically limited with ebooks?

    But, honestly, there are so many books out there right now that I want to read, go ahead, publishers, limit access. From where I’m standing that policy is only limiting your audience.

    • Very well put, Amy.
      I work @ the library and I don’t buy books (in any form), however many of our patrons will opt to purchase a book if the holds wait is too long.
      I agree with you: I think publishers are limiting their audience.
      I don’t understand why the public isn’t up in arms and threatening to withhold their purchases to certain publishers who are seemingly cutting off their nose to spite their face.
      The public, the people w/the $ to spend on books are the ones who are being unfairly cheated.
      eBooks just give them another option/venue to get their books.
      eBooks are a win-win situation. Why are they so afraid?

    • Unfortunately Ginny your own argument works against you with any threat to withhold purchases from certain publishers. Those patrons most affected by this had no intention of paying for the title in e-format or print.

  6. Regardless of the various “reasons” for ending the service, the ones most hurt are the patrons. Pretending to do it “for the libraries” is just PR Spin. Amazon is usually the resource of last resort for those I know of seeking to buy hard to come by products; the fear of Amazon is overblown imo.

  7. Blair Hinson says:

    We bring you this report from the desk of the “cut off your nose to spite your face” department…

  8. While I’m troubled by the many difficulties public libraries have lending ebooks, I’ve been focusing instead on the many examples of public libraries reconsidering their mission and becoming creative hubs for their communities. There is a great opportunity there. The 20th century library was a monument to knowledge consumption, the 21st century library has the opportunity to devote half of its resources back to knowledge production. Thank you, internet. So what is this piece of media we call an ebook going to be in 10 years; what properties, affordances and constraints will it
    have? How will people or machines be ‘authoring’ them?

    I’m glad public libraries, the ALA, the Internet Archive, the DPLA, and all of us are thinking about lending models for these files we liken to print books. But I think it’d be interesting at this moment to take a step back and examine what the basic building blocks of new media narratives and nonfictions are now, what they might be in the future, and then consider how a clever group of artists, publishers, retailers, and librarians might flip the current ecosystem on it’s back. Public libraries seem to be an end point for media in our current model, what if they were to work with publishers and retailers to become the starting point? What might that look like? Public libraries have always held ‘access’ as one of our core values, and by that they meant access to media, access to content. Now we offer access to tools, to technology, to connectivity. Is there the makings of a new ecosystem there? I get how much of this can work in a library (I work in a library!), the more complicated pieces of that puzzle are how this might change the way we think of publishing, how this public content creation might lead to a paycheck for the artist, etc etc.

    • This all sounds so reasonable. I’m new to the ramifications and specific processes involved, but am pursuaded this is the likely model for future publication projects that most benefit the first person on the food chain: the writers/artists who conceived them, who are trying to make some kind of living doing what they do best, hoping to find an audience for their work as a *first* resort rather than wearing themselves out with full-time day jobs of no comparable skill or education preparation–but that pay the bills, maybe–and that leave little energy and reserves for their art.

  9. Heavens to Murgatroyd says:

    <<"The desire to increase this friction may lead the recalcitrant publishers to demand a business model in which they will only make their ebooks available to public libraries if they are used in the library or if a patron is required to bring their device to the library…"

    Anyone remember Ranganathan's fourth law of Library Science. "Save the time of the reader." Yeah, so much for that.

    <<“Our ongoing partnership with the ALA is more important than ever, and our recent talks with ALA leadership helped bring everything into focus.”

    So that doesn't sound good for ALA's advocacy on this issue.

  10. “The company backed away from that demand, but the security concerns have likely never been allayed.”

    Amazon uses the same security for both library loans and purchases. If Penguin were truly concerned about security, they’d have pulled all of their content from Amazon. This isn’t about security; it’s about money.

  11. This is ridiculous: “The supply chain that has grown up around library lending of ebooks has evolved among other third-party commercial entities without much input from the publishers.”

    As for-profit entities, publishers live and die by their understanding of markets and by the partnerships they create to distribute their products. They are not powerless players who must wait for an invitation to the party. They’re either in or out on their own volition … and plenty of them HAVE been involved, despite what the quote above suggests.

    In truth, LIBRARIES and LIBRARY USERS have had no input, which is why they’re stuck with the clustf*ck platform that is Overdrive. Libraries (and library systems) should have been proactively developing platforms and resource-sharing models rather than waiting for commercial enterprises to deliver … and then simply paying whatever Overdrive asked when it walked in the door.

    The idea (as the article states) that we should only use ebooks in the library–so as to avoid cutting into publisher sales–is patently ludicrous.

    And that ALA only recently coordinated serious talks around these issues shows what a lumbering last-century beast it is as well.

    I don’t pity the publishers, and I don’t respect the library profession, which failed to be a strong advocate for itself and the public it serves.

  12. “I don’t pity the publishers, and I don’t respect the
    >library profession, which failed to be a strong advocate
    >for itself and the public it serves.

    I am a librarian.

    You are absolutely correct. Unfortunately, the ALA is a weak and flaky organization, and librarians in general have a hard time organizing themselves enough to tackle the real issue.

    Unfortunately, the library world in general is populated by librarians who lack a decent understanding of technology. Many of them think they are technologically capable, but they’re not – they are just passive users of software. Add to that the fact that the ALA is a completely useless oganization, and it becomes almost impossible to update the way data and technology are used on any widespread basis (ex. American public libraries still use MARC records, a format that was created in the 60s!).

    Libraries and publishers are both guilty of dragging their feet when it comes to technology. Publishers don’t seem to have any realistic grasp of electronic commerce and usage, and are floundering under the weight of the old, stodgy ways.

    • James, I couldn’t agree more … I am (was) a librarian, too.

      Your comment is spot-on: “They are just passive users of software.”

      I see a generation of senior peers clinging to administrative models, workplace tools, and performance metrics that are irrelevant to the rest of the world and out of step with present community needs. Moreover, younger professionals who are “digital natives” are too often boxed out or ignored.

      This was best exemplified for me when a director (20+ years my senior) celebrated her first purchase via ebay … more than a decade after my first ebay purchase.

      Total a-ha moment.

      This older generation is complacent about crappy interfaces. It fails to grasp the DIY potential of much technology, including the benefit of open source initiatives. And it’s allowed commercial enterprises to call all the shots.

      I’m drifting away from the Penguin discussion … but my point is that the professionals most capable of navigating these new waters with GPS are waved away by hoary greybeards still squinting thru their sextants.

    • Never touched ebay, but bet you haven’t gotten your fingers soiled on siteslike Piratebay…does that make you a luddite?

  13. cheapirish says:

    Our library requires people borrowing DVDs to bring the DVD player into the library. We load it in the slot for them, they take it home, connect it to their TV, watch it, bring the DVD player back to the library, we unload it and put it back in the case. Both staff and patrons love the convenience and service. I can’t imagine the same model wouldn’t work for eBooks.

    • Dear Cheaprish
      You are not serious about DVDs – are you?

    • Dear Cheapirish
      You are not serious about DVDs – are you?

    • cheapirish says:

      I’ll let you be the judge.

    • LOL, good one, Cheapirish. Clever analogy.

      But seriously, the idea that people will have to physically come into the library to borrow ebooks is so *beyond absurd*, it boggles me. It flies in the very face of the whole concept of a digital library. If the Big 6 publishers actually think this is a plausible model, I don’t see how we are going to be able to work with them.

      I also agree that librarianship as a profession should be out ahead on these issues, not playing catch-up, and I’m frustrated that we’re not. Mayeb this will serve as a wake-up call.

  14. Steve Bridge says:

    I sent the following to ALA a couple of weeks ago:

    >>>I think Maureen Sullivan missed something important to tell Penguin and other publishers. She focused on the loss to library patrons. Instead ALA needs to focus on the loss to publishers. They are harming their own self-interests by not understanding libraries.

    One of the reasons that people have been buying e-readers is that libraries have e-books. More people with e-readers mean that more people not only borrow e-books but more people also get hooked and start BUYING e-books – just as is true for paper books.

    Libraries create readers. Readers borrow books. Readers buy books.

    Non-readers neither borrow nor buy books.

    Harming libraries… even restricting libraries… harms publishers in the long run.

    We need to point out that publishers are setting their own pants on fire.
    >>>

  15. If the publishers want friction why not just delay the release of ebooks to libraries. Then the people who can’t wait to read a new title in digital format will have to purchase it. A variation of the same approach would be to only allow purchase of enough titles to maintain a certain holds ratio, which would be higher than what libraries might maintain for print titles.

    The friction argument does make some sense; it might help if libraries get their imaginations in gear and come up with alternative models with friction. Otherwise we’ll end up with bad ideas like patrons having to bring in their ereaders to download.

  16. It is difficult to become a practicing librarian with a high level of technical skill when the ALA accredited library programs are heavily weighted towards theory classes. I just finished my MLS and over half of the tech related classes listed for the program were not even being offered. I feel a little cheated as I entered the program with the understanding that I could focus on library technology as a specialization, which was definately not the case. I agree that until the library profession actually “walks the walk” rather than merely “talking the talk” with respect to technology we are unlikely to forge the type of relationships with publishers that are required to process ebooks successfully.

  17. proud to be a librarian says:

    Instead of bashing the profession many of you choose to be in and remain in, why aren’t you out there yourselves advocating at the local, state and federal level for increased funding for library budgets. Somebody said that money is the bottom line. Well, the bottom line in libraries is money as well; whether it is for technology, e-media and print and for all the staff to provide all the services a library could fill as a community builder and knowledge provider. Stop complaining about your chosen profession and do something. Get a grip, experienced or new to the game, we all want the same thing.

  18. I wonder if it would cost libraries as much as Overdrive does to adopt a Netflix model: mail books to patrons houses w/a prepaid return package/envelope

    not realistic but… >:)

    • When I was a teenager back in the 1970s, my parents got me a subscription to the Extension Library at the University of Alberta in Edmonton. They sent me book lists where I could mark my preferences, and they would send me a prepaid box of 4 books every 4 weeks. For a kid on the farm with only a small local community library, this was pure heaven! My parents ended up getting me 2 memberships so I could get books every 2 weeks!

  19. I don’t buy books anymore either. I just bought a kindle, and was willing to jump through the hoops to download books because many books I wanted were only coming out in e-book form. The library has stopped buying as much in paper format. If they go back to buying the hard copies of books, I could care less. I am afraid what will happen instead is that libraries will not get as many books, period. I am sorry that publishers don’t value the library patron. I for one, will not be reading as much. Much of what is coming out now is garbage anyway.

  20. Library patrons often fall into 2 categories. Those who ONLY get library books (thus will never spend money in the marketplace) and those who will buy a book (or series) that they have read and enjoyed. I fall into the latter group. I have read the first 2 or 3 of a series and if I love it, I will not only buy the first few, but the others as they come out.

    Making it difficult for patrons to get ebooks by forcing them to go to the library with their device is very unhelpful – not only because of shortened library hours, but also for a large group of handicapped folks who can’t easily get to a library. Ebooks are a HUGE huge help for this group, who generally do not have the funds to buy in the marketplace anyway.

  21. Ebooks have no effect on the books I buy. Stopping them just means that I won’t read what I would have had they been available. It makes me think authors will just be reaching less people. And there are those who have found ebooks to make a huge difference in their lives as they are unable to actually get to their library (eg disabled, unwell). The whole point of having an ereader is convenience, progress. If you have to take your device into the library you just as well not bother having one and borrow the book instead. Then Sony et al can complain when there revenue goes down the drain thanks to companies like Penguin not supplying anything to read on them.

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