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The business of e-books: Garfield Heights’ OverDrive is middleman between libraries and publishers

photo of e-books
Davizro Photography
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Libraries have seen digital material circulation explode since the pandemic, but the cost of e-books is much higher for institutional use than it is for individuals. One company, Garfield Heights-based OverDrive, is the portal to digital for 92,000 libraries and schools.

Libraries across the country continue to complain about the pricing of e-books, which are often more expensive for libraries than individuals.

If you’ve ever wondered how books become e-books, the answer lies in Garfield Heights at OverDrive.

The company created apps such as Libby and Kanopy, which last year saw 662 million digital material check outs nationwide. OverDrive was started by Steve Potash, a Cleveland Heights High School and Ohio State University graduate who eventually received his law degree from Cleveland State University.

“I said, ‘Wouldn't it be cool if I could practice law and produce the kind of documents and pleadings and contracts more efficiently?’” he said. “I started to tinker, and this was in the late ‘70s, early '80s, with the idea of taking law books and digitizing them.”

From floppy diskettes to CD-ROMs and now apps, the company is the portal to e-books, audiobooks and digital magazines for 92,000 libraries and schools.

“They pick the books,” he said. “The libraries pay OverDrive, and at the end of the month OverDrive remits the majority of the revenue back to the authors, the agents and the publishers who are suppliers.”

Book buying binge

Potash said those suppliers also set the costs, which are an issue for many libraries. As e-book usage exploded during the pandemic, librarians found digital content is sometimes priced much higher for institutional use.

“The average cost of an e-book is around $55, whereas the average cost of a print book is somewhere around the $20 mark,” said Kimberly Garrett, deputy director for the Warren Trumbull County Public Library system. “Publishers can impose restrictions on how many items can be borrowed or how many users can access it simultaneously. Unfortunately, access is not necessarily equitable with regards to libraries and digital media publishers.”

Akron-Summit County Public Library Deputy Director Michelle Alleman agrees, adding that printed books are more affordable.

“For buying actual physical materials, we usually get a discount,” she said. “We're paying maybe $16 or $17 for something we're able to purchase multiple copies. In most cases, they'll probably last more than 24 months, so they'll remain in the collection. It makes it trickier for libraries to balance the budget. Even though you have 80% of your circulation made up from physical circulation, we're spending about half of our materials budget on digital items just because it costs more.”

Libraries throughout Northeast Ohio have reported digital use continues to increase while physical circulation has plateaued or even dipped.

Audiobooks are rapidly going digital due to convenience, Alleman said.

“A lot of people would listen to them commuting,” she said. “Cars don't necessarily even come with the CD player anymore. Younger kids and teens, they love the convenience of having the audio books on their phones. I think another thing that comes into play: We're starting to see certain titles that just are not available for purchase as audio in a physical format.”

Floppy disks containing e-book software
OverDrive
From floppy disks to apps, OverDrive has grown over the past four decades under CEO Steve Potash. He credits input from some of the nation's largest libraries, such as the Cleveland system, with helping to shape their software.

Options for the future

Potash said OverDrive does advocate for other pricing options, such as a pay-per-use model.

“If they say, ‘Rather than me buying a dozen of these titles at maybe 30 bucks an e-book, what if… every time someone borrows it, the publisher says, ‘I'm OK with getting paid $2.00?’” he said.

The Medina County District Library is part of CLEVNET. Medina Collections Resource Manager Chris Weaver-Pieh recently started an online group of system librarians to coordinate digital purchases.

“Just so we can compare notes, or not purchase more than is needed,” she said. “It just got started, we haven’t done much, but it’s like if we can communicate with each other, we can make better use of our money, our time, the collection.”

Weaver-Pieh also wondered if it’s time to reconsider the number of items which can be on hold.

“It's starting to be that users are using that as their wish list, or their ‘to read’ list,” she said. “There was an article from Seattle Public Library about how their holds limit was 25, and it was stressing their budget to try and fill those holes… so they reduced the holds limit to 10. The CLEVNET holds limit is 1,000, and I was like, ‘I bet we could lower that a tiny bit.’”

Weaver-Pieh, Alleman and Garrett all point out that OverDrive isn’t the problem.

“Steve Potash is so passionate about education and access to materials,” Weaver-Pieh said. “It's not like they're an evil corporation or anything like that. They're doing their best to make things accessible to libraries. They're huge advocates for libraries.”

Going to the statehouse

Another advocate for libraries is Kyle Courtney, director of copyright and information policy at Harvard Library. He also runs the nonprofit, eBook Study Group, which works with libraries on e-book legislation. They have not yet been successful in the nine states where legislation was introduced: Massachusetts, Connecticut, Rhode Island, New York, Illinois, Hawaii, Iowa, Tennessee and Missouri. In his opinion, this is a matter of consumer protection and guarding the public dollars used to buy library materials.

“This bill would say, ‘The libraries are consumers,’” he said. “‘Just like any other consumer, we spend millions and millions of dollars every year on these collections. We can't have these collections be rentals that are temporary. That doesn't serve the long-term interest of the library mission. Therefore, we would like to adjust the terms so that we are not punished for our mission.’ Libraries buy something and hold onto it for future generations, that's what we're trying to introduce here.”

The Association of American Publishers declined comment on the topic for an NPR story last week. The association prevailed in a suit over e-book legislation in Maryland in 2022.

Courtney said there are not yet plans to introduce a version of his group’s bill in Ohio, home of OverDrive.

Kabir Bhatia is a senior reporter for Ideastream Public Media's arts & culture team.