OverDrive buyout proposal makes LibraryJournal.com: ‘Not such a crazy idea,’ says DPLA’s John Palfrey

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Although I’m still gung ho about the Digital Public Library of America, I retain some of the concerns arising in a recent MIT Technology Review article.

For example, how can we  reconcile the DPLA’s various goals and serve academic and public library patrons, whose needs and interests may differ sharply? One strategy would be for public libraries, or a related nonprofit, maybe even the DPLA or a successor, to be able to buy the OverDrive distribution service, which reaches “more than 15,000 libraries, schools, and colleges worldwide.” Talk up the idea well—always easier to do when a service and urgent needs already exist, as is true with OverDrive—and appropriate donors just might materialize.

Now LibraryJournal.com has just published my latest thoughts on the topic, in addition to the past suggestion that OverDrive people stay on in at least advisory roles to help assure continuation of  contracts with major publishers of popular content, plus a transition smooth in other ways. Most of the ongoing revenue could come from OverDrive’s current library customers, except that now libraries would enjoy more direct control over their electronic sides. The reinvented OverDrive could pick up content and technology from the DPLA or others; at least as I myself see it, the related infrastructure could be shared by separate but intertwined public and academic systems building on the nonprofit’s existing work.

To his considerable credit, John Palfrey, chair of the DPLA steering committee, has kept an open mind about the basic concept of the OverDrive purchase (even if he and I disagree on such details as separate systems): “Not such a crazy idea.” And in the LJ piece as well as in commentary on this site, I’ve explained why OverDrive’s owners might sell if the price were right—not merely for patriotic reasons but also for business ones, given all the new competition in the library e-book niches. Fingers crossed. Remember, at least for now, OverDrive is still the leader, and a sellout to libraries or a related nonprofit would bring the organization closer to its uses and increase the chances of this predominance continuing.

As for OverDrive’s international presence, I consider it to be a positive. The new organization could not only distribute American library content but also other countries’ items—both there and in the U.S.—and provide technical assistance to national digital library systems overseas. OverDrive would be serving as both the foundation of a U.S. system and a strengthener of international cultural ties.

The challenge is to retain and grow the participation of large publishers and other content providers. OverDrive has faced a difficult enough task with major houses despite the negotiating prowess of its people. Teamed up and enjoying greater technical capabilities and bargaining power, OverDrive and library systems could fare much better than on their own. Publishers, too, would benefit through reduction of middleman costs and a greater reach—with care taken along the way to pay them fairly for use of their wares. Library-created and -encouraged content, too, including the kind from end users? Absolutely. But let’s not forget the typical public library patron’s strong interest in popular commercial works promoted in the media. If the DPLA and publishers wants to boost interest in reading at a time when a fifth of U.S. high school seniors are said to be functionally illiterate, then an OverDrive purchase could go a long way in providing Americans with the right books to entice them.

Update, 17:55: The LJ piece has drawn a response, and I’ll share my reply below, at least while the comment is awaiting approval.

> I just wanted to point out that with Apple having their own ebook store, and Microsoft’s recent investment in B&N’s nook I doubt either one of those parties would be interested in giving libraries the means to more easily loan ebooks to their patrons.

Thanks, but that actually strengthens my case for OverDrive to sell out; to protect the current library business, OverDrive will need all the allies it can get. As part of the public library system (and ideally an academic one, too, via shared infrastructure), OverDrive would enjoy more support (the opinion and financial kinds) than as a for-profit. Here’s to “the kindness of strangers”! Libraries and OverDrive need each other, especially if Steve Potash and friends want to expand the current cashflow with the help of libraries rather than see the DPLA and others throw a party without them. Furthermore, if Apple and the others made things too messy for libraries, technically or otherwise, there might well be government intervention, given the importance of public libraries as literacy-builders. A fifth of U.S. high school seniors are functionally illiterate, according to one study. Shouldn’t we do more, not less, to entice them to read?

Beyond that, should public and philanthropic policies be set only by commercial interests–especially policies affecting public libraries? Also, can Microsoft and the rest dictate to Warren Buffett and other possible benefactors? Needless to say, Buffett’s pal Bill Gates could make a real difference if he lived up to all the publicity about his being a Carnegie-style friend of libraries and schools. Let’s hope that he could, especially with the library system’s possible contracting opps for MSFT. But if not–well, I’ve named a bunch of other possible benefactors. Ideally more than one billionaire would show an interest. A sure thing? No. But at least the idea is now out there on LJ’s Web site.

As for B&N and other retailers, there are major positives, such as links from library catalogs to purchasing opportunities on the private side, not just from libraries. OverDrive and many others believe that libraries help retail sales. Not everyone has time to finish library books (and there’s also the possibility of using shorter lending periods in many cases to create friction to encourage purchases).

I am not anti-retailer, just the opposite; I want a balance between public and private. If we value a diversity of content and freedom from government control, the solution isn’t one or the other. Let’s go for a mixed model!

> They, like publishers, would be too worried about ebook loaning infringing on their profits.

I’ve already explained–libraries help sales and will be especially important with so many brick-and-mortar stores vanishing. Librarians are marketers in disguise!

> It seems like a small point, but it made me skeptical of all the rest of the persuasive arguments in this post because that small point wasn’t thought about before being put out there.

The post had to be under 1,000 words. I’d love enough space to examine all the angles. But I’m delighted to be able to use the comments area.

> The idea does seem like a quick easy fix for all of the restrictions being placed on the ebook loaning market right now…

It’s hardly a panacea, but, yes, via better technology, more seamless checkout procedures and new business models phased in with close consultation with publishers, libraries could make life a lot easier for borrowers of e-books.

>… but I wish this post had examined any of the barriers to libraries acquiring OverDrive (besides the price point). Like, why would OverDrive want to sell to libraries? I would think that the money they get from software contracts over the next ten years or so far outweighs anything that even Warren Buffet would be willing to dish out for little old us.

Again, I was up against space limits, but I did write: “With competition growing in the ebook business, some powerful business reasons exist for OverDrive to sell itself to libraries if the rewards are sufficient.” A longer draft mentioned such rivals as 3M. OverDrive investors for now are up against Amazon and others with far, far more resources. Here’s a chance for OverDrive to team up with libraries to lock in its position of leadership in the library lending market.

> I would think that the money they get from software contracts over the next ten years or so far outweighs anything that even Warren Buffet would be willing to dish out for little old us.

Who’s “little old us”? You with OverDrive? 😉 Either way, remember that under this proposal, OverDrive’s library side would go from being a mere vendor to part of the library system. With the proposed deal, OverDrive will be on its own and the libraries just might defect to 3M. The reborn OverDrive could tap the expertise of Harvard and others in the academic world and even contract with 3M and rivals; far, far better than competing with them.

> And another small point, from a bookseller, I admit, but can we please stop using “Kindles” as a synonym for “ereader”? There’s at least one other device that is as popular, if not more so, than Amazon’s device. And it’s easier to use with library lending too.

Maybe I’m overlooking something, but I mentioned “Kindles” by device name in only one place–where I wrote: “Kindles and iPads. I’m happy to acknowledge the existence of Nooks, especially the new glowing kind. And Kobo e-readers, Sonys and the others. I think the context made clear what I was driving at. While iPads are not dedicated e-readers, they and other tablets are probably the real future of e-reading, along with, of course, phones.

For now, I hope that “little old us” in Cleveland will be open-minded and consider the dangers of of not selling out if the price is right. Let’s see if I can scare up a decent offer. Beyond that, I’d like to think that librarians and friends at OverDrive would want to do what’s right for the profession and at least consider this as one of the factors. Without an OverDrive sale to libraries or a related nonprofit, they risk being bypassed in time.

David Rothman

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