In recent news, Penguin Group made the decision to terminate its contract with OverDrive, the primary supplier of ebooks to libraries.
What does this mean? This means that yet another of the big six publishing houses has decided to not allow library lending of its ebook titles. (Others that have done this have included: Simon & Schuster, Macmillan, and Hachette.)
Why? Is it because of fiscal irresponsibility or technical issues with the OverDrive site? How about a more competitive contract with 3M, the only other major provider of e-book library lending software? No and no.
The real problem appears to be that OverDrive works too smoothly. They make it too easy for people to check out ebooks from the library without ever leaving home. Many in the publishing world have long viewed library loans as lost sales. Publishers have mixed feelings about libraries.
On the one hand, libraries are major customers. Seventy percent of children’s books are sold to libraries. ALA is the most important convention a children’s book author can attend. On the other hand… libraries are the dark competition to the publishing world. They provide free copies of publisher’s books to any library user that comes through our doors.
So given that publishers are already suspicious of libraries eating into their profits, I can see them becoming worried about technology that does not even require people to travel to the library to pick it up first.
Let’s look at what OverDrive posted about Penguin’s decision:
Starting tomorrow (February 10, 2012), Penguin will no longer offer additional copies of eBooks and download [of] 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.
Penguin’s choice to make it more difficult for library patrons to download copies that libraries have already purchased for lending is very telling. In effect it is saying, “Okay, we can’t take back the books you already bought from us, but we can make it far less convenient to use them.”
I am both fascinated and appalled by this obstructionism. I borrow books before I purchase them, to make sure that I really want them. Does making a title freely available hamper book sales? Not according to Cory Doctorow, Neil Gaiman, or Phil Foglio. But perhaps the most fascinating recent counter example is provided by the web comic, Order of the Stick. Even though the comic is freely available on the web, his fans have contributed over $600,000.00 to his KickStarter drive to make reprints of his books available.
I think that publishers that withdraw from library ebook lending are making a tremendous mistake. They are letting their fear block them from reaching new audiences.
I am curious what all of you out there think. Are library loans lost revenue for publishers, or a promotional opportunity? What is your opinion of all this?