OverDrive is making history for libraries and eBooks
OverDrive Inc., the Garfield Heights-based digital reading platform for libraries and schools, is an important part of this long review of the New Yorker of what the magazine calls “the surprisingly large library e-book business.”
Daniel A. Gross’s play begins as follows:
Steve Potash, the bearded and bespectacled CEO of OverDrive, spent the second week of March 2020 on a business trip to New York City. OverDrive distributes e-books and audiobooks, that is, “digital content”. In New York, Potash met two clients: the New York Public Library and Houghton Mifflin Harcourt. By that time, Potash had already heard what he recently described to me as “heartbreaking stories” from colleagues in China about neighborhoods closed due to the coronavirus. He had an idea that his business could see big changes when, towards the end of the week, on March 13, the NYPL closed its doors and issued a statement: “The responsible thing to do and the best way to serve our people.” customers right now – is to help minimize the spread of COVID-19. The library added, “We will continue to provide access to e-books.”
The sudden switch to eBooks had huge practical and financial implications, not only for OverDrive but for public libraries across the country. Libraries can purchase printed books in bulk from any vendor of their choice, and through a legal principle called the first-sale doctrine, they have the right to lend these books free of charge to any number of readers. . But the doctrine of the first sale does not apply to digital content. For the most part, publishers don’t sell their eBooks or audiobooks to libraries: they sell digital distribution rights to third-party vendors, such as OverDrive, and people like Steve Potash sell lending rights to libraries. These rights often have an expiration date, and they make library e-books “much more expensive, in general, than printed books,” Michelle Jeske, who oversees the Denver Public Library System, told me. Digital content gives publishers more pricing power because it allows them to treat libraries differently from other types of buyers. Last year, the Denver Public Library increased its digital cases by over sixty percent, to 2.3 million, and spent about one-third of its collections budget on digital content, up from twenty percent in the year former..
OverDrive, Gross writes, “began in the mid-1980s as a document scanning business in a suburb of Cleveland. Potash and his wife, Loree, a college librarian, had both gone to law school. at night, and their first clients were law firms that needed help scanning large volumes of documents. ” It eventually helped publishers build online stores and sell e-books directly to consumers through its own marketplace, but evolved into its current model serving libraries and schools.
As Gross writes, “Libraries now pay OverDrive and its peers for a wide range of digital services, from negotiating prices with publishers to managing an increasingly complex digital rights system. During our video call, Potash showed me the OverDrive eBook Marketplace for Librarians, which can sort titles by price, popularity, release date, language, subject, license type, etc. About 50 librarians work for OverDrive, Potash said, and “every week they organize the best ways each community can maximize its taxpayer dollars.”
The big challenge, Gross concludes, is that “high e-book rights prices could become untenable for libraries in the long run, according to several librarians and advocates I’ve spoken to – libraries, vendors and publishers will likely need to negotiate a new way forward. “