by Ian Chant, Matt Enis, and Meredith Schwartz
September 25, 2013
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“Penguin will resume doing business with OverDrive as of this morning,” Penguin spokesperson Erica Glass told LJ on September 25. According to a blog post by Karen Estrovich, collection development manager for OverDrive, 17,000 Penguin ebooks are already “live and available for purchase in OverDrive Marketplace.” Although Estrovich refers to the transaction as a purchase, the books are being offered for a one year term on a one copy/one user lending model. They are currently only available to U.S. libraries (including public, academic, and consortia), but libraries outside the U.S. should be able to access them soon. According to Glass, the agreement does not include K-12 school libraries.
In addition, Glass told LJ, Penguin’s ebook partnership with Baker & Taylor, which “has been running in pilot mode” with the Los Angeles Public Library and Cuyahoga County Public Library since November 2012, has “now expanded to all Axis 360 libraries.”
“Baker & Taylor will make Penguin Group ebooks available for sale to library customers [including individual library systems and consortia] through its comprehensive Title Source 3 and Title Source 360 selection and acquisitions tools by the end of this week,” Jenny Johnson, manager of corporate administration for Baker & Taylor, told LJ. “Purchased ebooks will then be available for patrons to discover, download and read through the Axis 360 digital media platform. Titles will also be incorporated into Baker & Taylor’s FirstLook new title notifications plans, and throughout the full range of collection development programs that Baker & Taylor provides its customers for title selection and fulfillment in physical and digital formats.”
The deal has no impact on Penguin’s ebook distribution with 3M, said Glass, which began four months after the company broke off relations with OverDrive and has already expanded out of the pilot phase. In April of this year, Penguin further liberalized the terms of its ebook policy, lifting the six-month embargo on new Penguin titles.
WHAT ABOUT AMAZON?
Of the OverDrive deal, Estrovich also wrote, “Penguin ebooks are available for Kindle (US) via USB side-loading only.” Library users can check out a Penguin title as they do any other, but will have to connect their device to a computer with a USB cable to download the content. [UPDATE: on September 26, Penguin dropped the side-loading requirement].
Glass declined to comment on the terms of the agreement, but since this requirement is for Kindle ereaders only—Penguin ebooks can be wirelessly downloaded to Nooks and other devices—it seems likely to be driven by concern about Amazon.com’s involvement, or perhaps an effort to discourage libraries from purchasing Penguin titles in Kindle’s proprietary .AZW format.
“Side-loading is inconvenient for readers. The only advantage for publishers is the infamous ‘friction’ factor,” said Jimmy Thomas, executive director for Colorado’s Marmot Library Network. Thomas pointed out that the side-loading requirement will only apply to Kindle’s line of dedicated ereaders. Kindle Fire users can simply download an OverDrive app to access this content.
“Ebooks nowadays should be offered in epub and HTML5 formats. Any user of a smart mobile device (including Kindle Fire, excluding Kindle classic) with wireless connectivity should be able to ‘see book, read book’ (to quote OverDrive),” Thomas wrote in an email to LJ. “‘OverDrive Read’ or something comparably user-friendly seems the best way to balance DRM with maximum convenience for readers.”
Amazon involvement was key to Penguin’s initial decision to call off its OverDrive distribution deal, an anonymous source told infoDOCKET in February 2012. The move followed a November 2011 freeze on ebook sales of new Penguin titles to libraries, around the same time that Kindle launched its own “Lending Library,” and a January 2012 freeze on new audiobooks for libraries. In November 2011, Penguin also began requiring the USB download procedure for Kindles instead of wireless download, pending a review of its library lending terms.
At the time, Glass said in a statement, “Due to new concerns about the security of our digital editions, we find it necessary to delay the availability of our new titles in the digital format while we resolve these concerns with our business partners.” The continuing restriction on wireless downloads may imply that those concerns have not yet been completely resolved with Amazon, despite the renewed business relationship.
OverDrive Director of Marketing David Burleigh declined to speculate or disclose why side-loading remained a requirement for Penguin in this renewed deal.
“Permissions, terms, and usage are really in the publisher’s court,” Burleigh said. “We’re playing the role of facilitator and distributor…which is an important role, but some of these decisions are out of our control.”
When Penguin first broke with OverDrive, Author’s Guild executive director Paul Aiken told LJ: “It’s really hard to overstate the impact of Amazon’s particular deal with OverDrive and the shock wave that sent through the industry. The notion that public libraries, for the first time, would be sending their patrons to a commercial website for borrowing books—and not just any commercial website but the website of the entity that has a tight grip on the online marketplace for books—was bound to get a negative reaction.”
At the time, Penguin’s decision to pull out of OverDrive drew a lot of heated criticism from the library world. Librarians around the country told The Digital Shift that the sudden freeze on Kindle lending through public libraries for Penguin books was inconveniencing patrons (Penguin restored Kindle lending for older titles within days). Then-ALA President-elect Maureen Sullivan called on Penguin to deal with Amazon directly, “and not hold libraries hostage to a conflict of business models.” (Since 3M and Baker & Taylor do not have arrangements with Amazon, OverDrive is the only library ebook distributor for whom this is a factor.)
Regardless, today, librarians are excited by the news, with reactions on Twitter ranging from “Hooray!” to “finally!”, as well as critique of the one year lending model—and the optimistically large purchases of Penguin titles recommended by OverDrive.
ALA President Barbara Stripling
“To me, it means that we’re on a positive trajectory,” American Library Association President Barbara Stripling told LJ. “We are moving forward, and expectations are that we will continue working in partnership with publishers to [resolve] remaining issues and really establish a tight connection with public libraries for access and fair pricing for ebooks.”
Pricing and licensing terms for ebooks remain a complex issue that libraries must continue to address, Stripling said.
“It’s still on the table—investigating multi-year leasing, different pricing structures—and I know we’re going to continue our dialogue with publishers.”
What is encouraging, she added, is that publishers, librarians, and ALA were continuing to collaborate to find the right formula.
Burleigh also credited ALA and the broader advocacy efforts of the library community for helping bring publishers to the table, adding that OverDrive plans to continue its own efforts to educate publishers regarding the positive impact that libraries have on discovery and, ultimately, sales.
“Discovery and engagement is so important to the sales process” for publishers, he said. “Libraries can give [publishers] that in a very unique way—it’s a very desirable market for publishers to be in.”
Officials at Colorado’s Douglas County Libraries (DCL), which has pioneered the library-owned, library-managed ebook movement, were pleased that Penguin ebooks would become more widely available, but expressed frustration regarding the licensing terms.
Rochelle Logan, Associate Director of Support Services, Douglas County Library
“From a collection development standpoint, this is a bittersweet set up,” said DCL Associate Director Rochelle Logan. “The pricing is reasonable (although we would prefer a discount), but having to repurchase books after one year is an additional task for CD librarians and an additional expense. We’ve already been collecting Penguin titles in 3M and they are VERY popular.”
She continued: “According to our staff, ‘It is fairly easy to get reports that show the number of uses per title, number of current holds, etc. on each item, and the price point is reasonable on Penguin titles. The frustration is that good titles/authors that have not circulated very much yet might need to be purchased again.’”
Jamies LaRue, Director, Douglas County Libraries
DCL Director Jamie LaRue was more blunt.
“Welcome to the latest iteration of the ghost collection, haunting but not inhabiting our catalogs,” LaRue said. “While this allows us to provide more titles in a popular format, it also means that rentals cost just as much as full retail, and we lose them in 12 months. That means we assume even more risk for the privilege of promoting new titles.”
NOT ABOUT THE MERGER
The deal does not have any impact on the Random House side of the recently merged Penguin Random House, Random House spokesperson Stuart Applebaum told LJ, though “both sides of Penguin Random House see it as good news. We continue to follow separate paths on terms of sale, policies and practices with libraries.” Random House has had uninterrupted relationships with OverDrive and Baker & Taylor, from which Penguin took a hiatus, as well as with Ingram and 3M.
Applebaum lauded vice president of online sales and marketing Tim McCall at Penguin as the architect of the rapproachment. McCall, he said, “was the primary mover for [Penguin] in the resumptions with B&T and Overdrive. If there’s someone on the Penguin side who deserves credit for moving it forward, it would be he.”
This article was updated on September 26 to include comments from officials at Douglas County Libraries. To see the letter OverDrive sent to library partners and a chronology of Penguin and OverDrive’s previous interactions, visit infoDOCKET.