On the surface, there couldn’t be a more wholesome story than the meteoric rise of the Libby app. A user-friendly reading app becomes popular during the pandemic, making books cool again for young readers, multiplying e-book circulation and saving public libraries from sudden obsolescence.
But the Libby story is also a parable for how the best-intentioned people can build a beloved technological tool and accidentally create a financial crisis for those who need the tech most. Public librarians depend on Libby, but they also worry that its newfound popularity could seriously strain their budgets.
Before 2017, e-books were still pretty niche, and checking out library e-books was torture. In 2016, just over a quarter of Americans had read an e-book within the previous year, according to a Pew Research Center survey. Not many people even knew their libraries offered digital books. Overdrive — the digital marketplace for publishers and libraries, and the creator of Libby — was (and still is) clunky, slow and unintuitive. Overdrive hit just under 200 million checkouts in 2016; in 2020, that number more than doubled, surpassing 430 million.
Few noticed when the cute, friendly virtual library app launched in 2017. Libraries are never very good at selling themselves, and neither is Overdrive. But the app’s seamless, user-friendly experience was so exceptional that it spoke for itself. Libby became a cult favorite for book lovers and dedicated librarygoers, and almost every public library in the country, already dependent on Overdrive for their growing digital collections, loved that they could make reading online a little bit easier. It was the public library’s best-kept secret.
And then in March 2020, when libraries closed their doors and books sat gathering dust, the Libby app became so much more than a cute reading tool. People turned to digital books and were delighted to discover they were so much simpler than remembered. You could access the web app anywhere on any computer, and everything synced to a phone app as well. You could download library books to Kindle. You never needed a password. You could use more than one library card. Libby downloads increased three times their usual amount beginning in late March. E-book checkout growth and new users on Overdrive both increased more than 50%.
Libby had helped to save libraries.
It had also accelerated a funding crisis. Public library budgets have never been luxe, and book acquisition budgets in particular have always been tight. Though it may seem counterintuitive to readers, e-books cost far more than physical books for libraries, meaning that increased demand for digital editions put libraries in a financial bind.
Because e-books are not regulated under the same laws that govern physical books, publishers can price them however they choose. Rather than emulate the physical model, where libraries pay a fixed cost for a certain number of books, they instead offer digital editions through a license that usually includes a limit on the number of times a book can be checked out, the length of time a library holds an edition, or both. Just like with movies, music and software, book publishers have moved from an ownership model to a subscription model for their digital products (none of the major publishing houses responded to multiple requests for comment for this story). Librarians sometimes pay hundreds of dollars to circulate one copy of an e-book for a two-year period, a number that could theoretically add up to thousands for one book over decades, according to a 2019 American Library Association report to Congress.
The librarians I spoke with celebrate Libby. They love that more people are reading digital books. But they can’t help but quietly curse the technological problem that brought them here.
“It is definitely problematic,” said Michelle Jeske, the city librarian for the Denver Public Library and president of the Public Library Association, a division of the American Library Association. “You’re buying it in print, you’re buying it in e-book, and in audio e-book, CD, and in Spanish. With either a steady or decreasing collection development budget, it’s a serious problem.”
Despite Overdrive’s dominance, the company has escaped criticism for the funding crisis. Overdrive makes good money on the digital book-lending business; it’s the largest marketplace for publishers to sell to public libraries in the U.S., is expanding rapidly in other major publishing powerhouse countries like Germany and China, and offers a popular school reading app called Sora. More than 23,000 new schools and libraries joined Overdrive in 2020 alone.
“It’s important for us to have the same values and standards that the libraries do, protecting privacy and confidentiality, making information accessible in as broad a ways as possible,” said David Burleigh, the communications director for Overdrive. Overdrive also became a Certified B Corporation the same year it launched the Libby app, and it now leverages that status to avoid getting mucked up in the financial fight.
The ALA lobbying arm has been pushing Congress to consider regulating digital media to address this problem, and it’s no secret to anyone who reads Publishers Weekly that tensions between librarians and publishers have spilled over into public animosity. “Publishing is a tough tough world, and it sometimes has felt like librarians and publishers have been pitted against each other. They need to make money, and we need to be able to serve our public. There has got to be some place in the middle,” Jeske said.
Publishers justify the increased cost of e-books because they say the new technology has reduced friction too much, hurting their sales. They have argued that Libby and libraries have made it too easy for people to read books without buying them. Macmillan, one of the big five publishers, placed an eight-week embargo on library sales of new e-book releases in late 2019 for just that reason, though it reversed its position in March 2020 because of the pandemic. “In today’s digital world there is no such friction in the market. As the development of apps and extensions continues, and as libraries extend their reach statewide as well as nationally, it is becoming ever easier to borrow rather than buy,” wrote John Sargent, Macmillan’s then-CEO, in an open letter to librarians justifying the embargo.
And though librarians like Jeske and Eileen Ybarra, the e-book coordinator for the largest digital collection in the country at the LA Public Library, vehemently disagree — they believe it’s still too hard for people to access digital books — they say that in one respect, the publishers are absolutely correct: Overdrive wants to make the e-reading experience as frictionless as possible.
“That’s the idea. It’s to make it as easy as possible for people to read as much as they like,” Burleigh said. “Ease,” “accessibility” and “efficiency” are his keywords: He repeats them over and over again in every conversation about his company’s app.
Overdrive doesn’t believe that frictionless library lending hurts publishers. In fact, Burleigh said, it actually can help.
While Burleigh wouldn’t directly answer questions about Overdrive’s role in reducing the friction — it would be awkward for business if he did, given that Overdrive mostly makes money through a cut of what publishers sell on its platform — he pointed to research that shows that increased library lending actually helps book sales. (Overdrive funds Panorama, the independent group that conducted the research.)
“Libraries are part of the ecosystem. They’re not competing necessarily with booksellers,” Burleigh said, adding that the research shows that when people read more, it creates a channel of discovery for lesser-known books.
. . . .
Burleigh said that Overdrive advocates for a wide range of funding models and the best deals for libraries, but he also hesitated to describe an “ideal” solution for e-book pricing that would satisfy everyone. “It’s a good question. I don’t know that I have the answer. Publishers have different strategies. Libraries have different strategies.”
Link to the rest at Protocol and thanks to DM for the tip.
The OP constitutes PG’s Exhibit 723,467 in support of his proposition that major publishers are run by idiots.
- You hate Amazon because it’s too successful at selling books because it knows how to price books optimally to generate the largest number of sales to optimize profits from those sales.
- Once again, demonstrating the stupidity of groupthink you put all your ebook lending eggs into one basket and give the entire business to Overdrive, mainly because it’s not Amazon.
- PG doesn’t know if Overdrive is run by smart people or not, but it recognizes a great opportunity for a quasi-monopoly-scale profit that a mind-blown ex-hippie drug dealer could see. To whit (or, to wit (PG is old-style on this topic)), that it can deliver organized groups of electrons that it receives from publishers to libraries almost for free.
- There is no technological reason that each major publisher could not put together its own version of Overdrive’s system and deal with libraries directly. (Yes, the publishers would have to hire some outside technology experts to build the system, but graduates from the computer science departments of any number of major and minor universities could handle the job providing that they graduated in the top half of their class. (LexisNexis has been doing the same thing for thousands of years. (PG knows this because he worked there when dinosaurs roamed the earth. (and it was not rocket science then))))
PG is in an uncharacteristically-charitable mood (probably an unannounced side effect of the covid vaccine), so he will lay out a plan for Big Publishing to extricate itself from this self-made car-crash.
- Fly to Seattle (you can share a chartered jet to save money because you love private meetings with no one listening in)
- Enter Bezos Mansion dressed in sackcloth on bended knees
- Beg the Jeffster to please, please, please forgive you of your follies and save you from your stupidity
- Explain that you know the smart folks at Amazon can put together their own version of Overdrive over a long weekend (you might offer to reimburse any overtime expenses Amazon accrues and provide food and Jolt Cola for all concerned)
- Change back into New York business attire on the plane flying back. Imbibe freely because you aren’t going to be fired after all. Glance out the window to view terra incognita.
- A week later, send a joint letter (more Big Publishing “cooperation”) to all libraries in America announcing that they have an alternative to Overdrive that will cost them less and is coming to them from (through gritted teeth) Amazon.
PG feels much better now. For a moment, it was almost like he wasn’t sheltering in place.
PG is familiar with Libby because his local library uses it for ebook lending. Libby works, sort of, and reminds him of the 80’s.
Amazon’s discovery, lending and check-out systems for books are light-years better than Libby (Libby even uses Amazon to deliver ebooks to PG’s Kindle Fire). Amazon may already have the bones of an ebook lending reporting system for publishers in the KDP reporting system.
Making a deal with Amazon could solve Big Publishing’s Overdrive problem and make them more money with one flight to Seattle.
In PG’s limited view, only one potential cloud my be on Big Publishing’s ebook lending horizon – the possibility that each of the major publishers signed an exclusive contract with Overdrive.
There’s only so much PG can do for really stupid people.
One of his rules for practicing law is “Don’t do business with fools.”
One of PG’s observations on the practice of law is “Fools can be so ingenious.”
But, if everything always worked out as expected, life would get boring pretty quickly.
PG is feeling rather wise, which is a sure sign he’s acting stupidly.