Blog Post

Penguin Ends E-Book Library Lending And Relationship With OverDrive

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Three months of library drama are coming to a climax this evening as big-six publisher Penguin announced that it is ending its relationship with digital library distributor OverDrive. Starting tomorrow, it will stop offering e-books and digital audiobooks to libraries — at least until it finds a new partner.

With this move, Random House becomes the only big-six publisher to allow unrestricted access to its e-books in libraries — though it will raise prices beginning in March.

As e-book borrowing from libraries skyrockets, publishers fear that borrowing will cut into paid sales of print and digital materials.

Big-six publishers met with the American Library Association to discuss the issue in New York this week (those conversations are referred to in Penguin’s statement, below). The ALA reported on those meetings earlier this week, highlighting a concern that may have led to Penguin’s move this evening:

A key issue that arose in each meeting is the degree to which “friction” may decline in the ebook lending transaction as compared to lending print books. From the publisher viewpoint, this friction provides some measure of security. Borrowing a print book from a library involves a nontrivial amount of personal work that often involves two trips-one to pick up the book and one to return it. The online availability of e-books alters this friction calculation, and publishers are concerned that the ready download-ability of library ebooks could have an adverse effect on sales.

The Penguin news was reported by Library Journal blog The Digital Shift. Library Journal reports that Penguin is negotiating a “continuance agreement” with OverDrive, which will allow libraries that have Penguin e-books in their catalog to continue to have access to those titles.”

In other words, libraries that have already purchased digital materials from Penguin through OverDrive — such as mega-bestseller The Help by Kathryn Stockett — may be allowed to keep lending them out. But libraries won’t be able to order any new Penguin e-books or audiobooks.

In its statement (below), Penguin said it is “continuing to talk about our future plans for eBook and digital audiobook availability for library lending with a number of partners providing these services,” but it hasn’t come to an agreement with any such partner (like OverDrive competitor 3M), meaning for now Penguin e-books in libraries are dunzo.

In November, Penguin pulled all new e-books from libraries, and last month it followed up by pulling all new digital audiobooks from libraries as well.

Penguin provided the following statement:

In these ever changing times, it is vital that we forge relationships with libraries and build a future together. We care about preserving the value of our authors’ work as well as helping libraries continue to serve their communities. Our ongoing partnership with the [American Library Association] is more important than ever, and our recent talks with ALA leadership helped bring everything into focus.

Looking ahead, we are continuing to talk about our future plans for eBook and digital audiobook availability for library lending with a number of partners providing these services. Because of these discussions, as of February 10, 2012, Penguin will no longer offer additional copies of eBooks and audiobooks for purchase via Overdrive.

Physical editions of Penguin’s new and backlist titles will continue to be available in libraries everywhere.

I’ve asked OverDrive for a comment and will update this post if I hear back.

12 Responses to “Penguin Ends E-Book Library Lending And Relationship With OverDrive”

  1. Lee Wells

    Penguin is also the publisher that forced e-book sellers (Amazon and Banes and Noble) to raise prices above the $10 pricepoint that was doing so well. They are a party along with Apple in a price-fixing lawsuit, one in which they are one of a very few that did not settle.
    The problem is that e-books can be a boon for the industry, not a hindrance to sales. If I buy an e-book, it’s because: it’s easier to carry than a paper book, it’s one I like, it’s one I can’t find to borrow from a library, it’s an author I really like, and the price is better than the publisher’s idea of a list price. If I can get them easier and cheaper, I will buy them.
    I believe that libraries must participate in digital media to survive. You won’t find a brick and mortar DVD rental place anymore, and at some point, the e-book patrons will force the publishers to change.
    It’s just that these (shortsighted) guys think in terms of hardbook sales, which have the best margin. But, I would rather sell 1000 widgets with a $1 profit than 50 with a $5 profit….
    The only way to influence the debate is to refuse to buy Penguin’s books….I hate to lose access to some favorite authors, but I don’t see another way.

  2. The real problem here is that publishers don’t understand libraries, ebooks, piracy, the realities of DRM, or even the Internet itself.  They don’t want to accept the changing marketplace and shifting customer needs, because doing so would force them to put some work into changing a business model that no longer works.  Moves like this don’t help anyone.  

  3. “Any library I’ve ever walked into in recent years typically has 3 kinds of patrons (in most cases): The elderly who grew up with libraries, underprivledge families with children, and mentally challenged folks. And the library is mostly empty. As harsh as that sounds, I believe it to be true.” Wow, “eBooks, I don’t know where you live, but that is NOT the state of the libraries in the city I live in (Birmingham, Alabama)!! Here, libraries are well used by all sorts of folks.  I see families, homeschoolers, kids from local schools studying,  people using the internet, people reading, etc. not the dead, sort of dysfunctional picture you’ve painted at all! I have been visiting libraries all my life, as have my children, and I am not elderly, either!
    In response to the article. Penguin’s reasoning makes no sense. We (my kids and I) use a Kindle and a Sony eReader, but we are all still quite willing to read actual books, as well.  So to me, there is little difference between a DTB or an a eBook from Penguin from the library. Except that, given the new circumstances surrounding Penguin’s unwillingness to deal with libraries, I will certainly think twice before buying a Penguin book in the future. And I DO reread. I don’t own a copy of Remarkable Creatures by Tracy Chevalier, but I have read it twice and was considering buying a copy for my Kindle. Now, I am rethinking it. I might look for a used hard copy… 

  4. Publishers complain about piracy, then they pull crap like this. Here’s the deal. People have ereaders. They want ebooks. Big name ebooks cost too much. Publishers won’t let libraries loan their new, in demand books. Readers go online and find a place to download for free. The world has changed. Publishers, as well as movie makers, need to get with the program.

  5. Yes, some books are re-read; however, I would highly doubt most books are. And I would imagine that Penguin has the stats to back that up. The argument that reading an eBook first then purchasing the hardcopy if you like it is absurd and most certainly the minority. Common sense would say so. It’s a flimsy argument.
    Unfortunately, the brick and mortar library with it’s physical books is coming to an end, maybe not tomorrow, but most certainly in the near future. Any library I’ve ever walked into in recent years typically has 3 kinds of patrons (in most cases): The elderly who grew up with libraries, underprivledge families with children, and mentally challenged folks. And the library is mostly empty. As harsh as that sounds, I believe it to be true. Romanticizing the public library as though it is the valued institution it once was will only make the proponents and advocates out there more cynical as more and more libraries close and/or loose funding and public support. eBooks, eReaders, Online Catalogues, mobile apps, are here to stay.  For better or worse.
    For the record, I prefer a hard-copy over digital but our kids don’t.

    • As a librarian, I must disagree with you from what I see everyday.  I work in an affluent community, one in which people presumably have the means to have computers and internet access at home.  We still have a line at the door every morning when we open up, and I hate to break it to you, but it’s not all just elderly, poor, and insane.  There are some people who use our computers and laptops every day, spending hours inside the brick and mortar.  Not everyone a) has the money or b) thinks it’s wise to just consume consume consume without previewing materials (also CDs and DVDs in additions to books) first.  As far as the ebooks go, Amazon for instance has horrendously bad customer service, especially for people who like to actually speak to a human on the phone, and the ereaders they sell come with next to no instructions.  Where do people go for help with their kindles? That would be the brick and mortar library.  It’s not going anywhere, although some people seem so utterly fond of saying that it is going away. 

      That said, every move by publishers like this creates a barrier to access, and elimination of such barriers is a core aspect of library service.  I have a feeling that Penguin’s moves in particular were orchestrated as a response to the tabling of SOPA, but ironically increased barriers to access = increased piracy.

  6. Penguin should reconsider. 
    I have actually checked out the electronic version of books that I own
    so that I can read things I know I like in doctor’s waiting rooms.  I see far too many doctors and they are
    rarely on time.

  7. Reading guest

    BIg fat boo from me.  Ironically enough.  I eagerly watched the Canada Reads debates, and “Prisoner of Tehran” (Penguin) was one of the first e-book library loans that allowed me to read one of the contenders!  I enjoyed the book so much that I put it on my “to buy” list.  Now, I am reconsidering.  

    If they think that library books don’t lead to purchased books, they need to think again – I buy books for the permanence and possibility of re-reads.  The only way I will find out before buying if said book fits that criteria for purchase is to read it first.And I don’t think the publishers have ever borrowed an ebook in their lives.  If there is a waiting list, like PoT had, there was NO “instant download”. I had to wait weeks for the book to arrive.

  8. It’s bloody stupid on their part. If they’re so worried about e-book lending cutting into sales, just do what they did with physical books, then add a requirement that a new e-book copy be purchased after a certain number of “lends”. They already do that with DVDs at my local library system (after a certain number of lend-outs, the DVD is no longer considered usable and has to be replaced).

    Instead, we get all this, at a time when it’s never been easier to pirate books (particularly since books don’t take up a lot of memory). 

    • Katherine

       You library system must have much more money than mine. My local library buys multiple copies for the initial “New book” must read fever and then weed them down as demand goes down. Same for DVDs and CDs. They don’t keep buying new. They patch and repair for years.