OverDrive serves as a digital content aggregator and provides the infrastructure for distributing e-books, audiobooks, streaming videos, and periodicals to public and school libraries. OverDrive first negotiates distribution agreements with publishers to obtain the licensing rights to the publisher\u2019s digital titles. The company currently offers over 3.3 million titles on its platform [3]. On the customer side, OverDrive negotiates contracts with libraries to build a customized online library which provides access to a specific collection of digital content, depending on the library\u2019s needs. Libraries pay a subscription fee to access OverDrive\u2019s platform, and then have the option to browse OverDrive\u2019s entire collection and purchase titles based on their collection development goals.<\/p>\n
Depending on its distribution agreement with the publishers, OverDrive can offer different lending options to the libraries [4]:<\/p>\n
- \n
- Simultaneous Use<\/em><\/strong> \u2013 Titles can be borrowed simultaneously by an unlimited number of users. Titles will typically never expire.<\/li>\n
- One Copy \/ One User <\/em><\/strong>\u2013 A digital library can only have one copy of a title, and only one user can borrow it at a specific time. Titles will never expire.<\/li>\n
- Metered Access <\/em><\/strong>\u2013 Similar to one One Copy \/ One User, but titles will expire after a determined period of time (typically 12 months).<\/li>\n
- Cost Per Circ (CPC)<\/em><\/strong> \u2013 Add a publisher\u2019s entire catalog to library\u2019s collection and pay when users borrow titles from that catalog.<\/li>\n<\/ul>\n
E-Books: a Blessing and a Curse<\/u><\/strong><\/p>\n
There is no doubt that the success of e-books has been instrumental to OverDrive\u2019s growth. Digital books now account for 20% of the market [5], and public libraries must provide e-books to stay relevant to patrons. However, there is an inherent tension between publishers and libraries over the right to circulate e-books. Libraries argue that e-books are the same as physical books: they are checked out for a standard loan period and cannot be checked out by more than one user at a time [6]. Publishers, on the other hand, argue that e-books are different because a user doesn\u2019t need to go to the library to pick up a book, and this lack of friction removes a differentiating factor between buying and borrowing books [7]. In addition, print books deteriorate over time, and users value the difference between borrowing a used book from the library and buying a brand new print book [8]. With e-books this differentiation also doesn\u2019t exist.<\/p>\n
Figure 1: North America e-book revenue from 2009 to 2016*, (in million U.S. dollars) [10]<\/u><\/strong><\/p>\n
![\"280249\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/280249-300x145.png\")
<\/a><\/p>\nThe tension between publishers and libraries has been both a blessing and a curse for OverDrive. Because each of the \u201cBig Five\u201d publishers has different lending terms and pricing policies for libraries, both libraries and publishers are dependent on OverDrive\u2019s digital platform to aggregate content and set pricing and circulation restrictions. On the other hand though, OverDrive runs the risk that the tension between publishers and libraries could become so significant that either party could withdraw from the platform. For example, in 2012, Penguin, one of the \u201cBig Five\u201d publishers, severed ties with OverDrive and decided to stop offering any of its e-books to libraries [11]. While Penguin returned to OverDrive in 2013, there is still the constant threat that publishers and libraries will stop using OverDrive\u2019s platform.<\/p>\n
Figure 2: Big Five Publishers and Library Lending [12]<\/u><\/strong><\/p>\n
![\"untitled\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Untitled-15-300x166.png\")
<\/a><\/p>\nOverDrive\u2019s Long Term Value Proposition?<\/u><\/strong><\/p>\n
To be successful in the long run, I think that OverDrive needs to resolve the fundamental tension between libraries and publishers. At the moment, OverDrive is playing referee between two very unhappy parties. At an ALA meeting in Boston in January 2016, the overall sentiment was \u201cas it is currently set up, the library e-book market is too burdensome to manage, complex for users to navigate, and library e-book prices are too expensive to sustain [13].\u201d One thing that OverDrive should do is run tests for publishers on select titles to gather data on whether libraries really affect retail sales. At the core of the issue is that libraries and publishers don\u2019t know if libraries increase book sales or cannibalize them, and as a result, cannot price e-books to libraries efficiently. If OverDrive can use their digital platform to obtain library-specific data to show the true impact library e-books have on retail sales, then they may be one step closer to bridging the divide between publishers and libraries.<\/p>\n
Word Count:<\/strong> 797<\/p>\n
Sources:<\/strong><\/p>\n
[1] OverDrive, \u201cHistory,\u201d http:\/\/company.overdrive.com\/company\/who-we-are\/history\/<\/a>, accessed November 17, 2016.<\/p>\n
[2] Ibid.<\/p>\n
[3] Ibid.<\/p>\n
[4] OverDrive, \u201cOverDrive Marketplace User Guide,\u201d http:\/\/company.overdrive.com\/files\/CR-User-Reference-Guide.pdf<\/a>, accessed November 17, 2016.<\/p>\n
[5] Alan S. Inouye, \u201cWhat\u2019s in Store for Ebooks?\u201d American Libraries, January 4, 2016, \u00a0\u00a0https:\/\/americanlibrariesmagazine.org\/2016\/01\/04\/whats-store-ebooks\/<\/a>, accessed November 2016.<\/p>\n
[6] Jeannette A. Woodward, The Transformed Library: E-books, Expertise, and Evolution<\/em> (Chicago: ALA Editions, 2013), PDF e-book, 14, https:\/\/books.google.com\/books?id=PpU8itcHIOoC&pg=PA13&lpg=PA13&dq=overdrive+negotiates+with+penguin&source=bl&ots=jkG9xen6eQ&sig=_tddELh4WD-_gXAfAwe09Ss2fwo&hl=en&sa=X&ved=0ahUKEwjDtOeQ6LDQAhVJ6oMKHQAZCH44FBDoAQggMAE#v=onepage&q=overdrive%20negotiates%20with%20penguin&f=false<\/a>, accessed November 2016.<\/p>\n
[7] Adam Vaccaro, \u201cWhy It\u2019s Difficult For Your Library to Lend Ebooks,\u201d Boston.com, June 27, 2014, https:\/\/www.boston.com\/news\/technology\/2014\/06\/27\/why-its-difficult-for-your-library-to-lend-ebooks<\/a>, accessed November 2016.<\/p>\n
[8] Jeannette A. Woodward, The Transformed Library: E-books, Expertise, and Evolution<\/em> (Chicago: ALA Editions, 2013), PDF e-book, 20, https:\/\/books.google.com\/books?id=PpU8itcHIOoC&pg=PA13&lpg=PA13&dq=overdrive+negotiates+with+penguin&source=bl&ots=jkG9xen6eQ&sig=_tddELh4WD-_gXAfAwe09Ss2fwo&hl=en&sa=X&ved=0ahUKEwjDtOeQ6LDQAhVJ6oMKHQAZCH44FBDoAQggMAE#v=onepage&q=overdrive%20negotiates%20with%20penguin&f=false<\/a>, accessed November 2016.<\/p>\n
[9] \u201cCopyright Infringement \u2013 First Sale Doctrine,\u201d CRM 1500-1999, Criminal Resource Manual 1801-1899, Section 1854, https:\/\/www.justice.gov\/usam\/criminal-resource-manual-1854-copyright-infringement-first-sale-doctrine<\/a>, accessed November 2016.<\/p>\n
[10] \u201cGlobal e-book revenue from 2009 to 2016*, by region (in million U.S. dollars),\u201d Statista, https:\/\/www.statista.com\/statistics\/280249\/global-e-book-revenue-by-region\/<\/a>, accessed November 2016.<\/p>\n
[11] Calvin Reid, \u201cPenguin Severs Ties with OverDrive,\u201d Publishers Weekly, February 9, 2012, http:\/\/www.publishersweekly.com\/pw\/by-topic\/digital\/content-and-e-books\/article\/50579-penguin-severs-ties-with-overdrive.html<\/a>, accessed November 2016.<\/p>\n
[12] American Library Association, \u201cBig Five Publishers and Library Lending,\u201d \u00a0http:\/\/www.ala.org\/transforminglibraries\/sites\/ala.org.transforminglibraries\/files\/content\/BigFiveEbookTerms091314.pdf<\/a>, accessed November 2016.<\/p>\n
- One Copy \/ One User <\/em><\/strong>\u2013 A digital library can only have one copy of a title, and only one user can borrow it at a specific time. Titles will never expire.<\/li>\n
![\"280249\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/280249.png\")
<\/a><\/p>\n