OverDrive and the Library eBook Convenience Paradox

The OverDrive iPad App, released just last week, is nice. Luckily, it's not TOO nice. Let me explain.

But first- a bit about OverDrive. OverDrive, the leading provider of ebooks in public libraries, has been battling some user experience issues. At last week's Tools of Change conference, librarian Katie Dunneback (@younglibrarian) went through the twenty-one steps a patron needs to take before they can read a library ePub book on their ebook reader. Kirk Biglione joked on Twitter that "it's actually easier to make an ePub file than it is to check one out of the library".

Once the initial configuration process is done, however, it's not so hard to start reading library stuff in the Overdrive App (actual name: "OverDrive Media Console"). I find Overdrive's discovery interface- which is a website and not part of the app- to be a bit mystifying. For my local library, which gets Overdrive books through the "ListenNJ" consortium, the main problem is finding an ebook I want to read that hasn't already been checked out.  The growing popularity of ebooks  is such that most of the ebooks are checked out, and since these use the "Pretend-It's-Print" model, I can't read them when someone else is doing so. Worse, the Overdrive website doesn't let me browse just the books that are available. Do people really exist who want to browse books that are checked out?

The browse interface also mixes up audio books with ebooks. I think most users want one or the other. It lets you sort by "creator" (Do real people know what a "creator" is?) but it doesn't provide a list of creators to browse. Granted, most library websites don't do much better, but isn't that why they still have stacks to wander?

Luckily, Overdrive also distributes public domain books from Project Gutenberg. These have the magical property that a new copy appears on my library's e-bookshelves as soon as one is checked out, like the milk cartons that get restocked from the rear in my grocer's refrigerator. If there were Creative-Commons licensed "unglued ebooks" in the library, they would behave the same way.

Although the public domain ebooks are a real godsend, the Overdrive website handles these clunkily, too. When I first searched for "Moby Dick" I found only a Penguin "enhanced" ebook version that was already checked out. I had to do a separate search in the Project Gutenberg section to discover the public domain Moby Dick that's always available.

The OverDrive iPad app itself delivers a nice reading experience. There's a single app that works on both iPhone and iPad - if you already had the iPhone version, you just need to update it. It's not as slick as some e-bookstore apps, but pretty good for a first version. And the books are quite readable. I borrowed Christie Golden's Omen, a Star Wars novel. The reading experience is on par with the Kindle App; I particularly liked the positional indicators: OverDrive's "7 pages left in chapter" is much more helpful than the Kindle App's "Location 3013-3019 --- 44%". The best part of the process was I was sitting in a ski lodge 259 miles away from my library.

Despite the the website issues, this whole lending thing seems great all around. Library patrons like me get to read books from the library in our preferred environment. We're exposed, without risk, to a variety of books we might not have considered acquiring on our own. And apart from feeling obligated to support our library when the friends group asks for money or raising our voices when the municipal budget gets cut, it doesn't cost us anything.

So what's the problem? Why am I going around showing demand curves and mathematical inequalities, claiming that lending ebooks doesn't create economic value like it's some mathematical proof or something?

In doing that, I'm guilty of some oversimplification. So now I'm going to show you yet another demand curve and recomplexify everything for you.

Remember print books? Let's review the book industry's method of squeezing every last dollar out of a book's demand curve. It's done by segmenting the market. When a hot new book comes out, it's a hard-cover that costs maybe $30. The people who buy the book are those that value it the most and the truly impatient. If the book is successful as a hard cover, then maybe a year later it comes out as a softcover priced at $12.95. A whole new wave of purchasers buy and read the book. The hardcover and softcover markets are segmented because they attract a different audience. Consumers perceive this as fair because the softcover feels like an inferior product, even though the manufacturing cost differences are quite small.

Consumers who don't even want to pay for a softcover are served by libraries and used book stores. Although it doesn't cost anything to borrow a library book, you may have to wait for it to be available, you have to get yourself to the library, and when you're finished with it, you have to take it back. Instead of the cover price, you pay the price of time and inconvenience.

Another form of market segmentation is accomplished by splitting regional rights. A book might be priced lower in India than in the US (and higher in the UK) because consumers in each country have somewhat different expectations as to what a book should cost.

Market segmentation is harder to achieve with ebooks. You can't put a hard cover on an ebook, and price differences are harder to sustain across national boundaries when the commodity is purely digital. A publisher can drop the price of an ebook with time after publication, but this can be hard to do because of supply chain issues, author royalty contracts, and consumer perceptions of value.

The library ebook distribution channel presents another opportunity for market segmentation. Libraries "buy" the ebooks, resulting in revenue for rights holders. Consumers can read the books without paying for them, but they have to be willing to put up with 21 step configurations and account IDs, and face the possibility that a book might not be available right away and may have a long lending queue. At least with ebooks, there's not the inconvenience of going to the library again to return the book at the end of the lending period!

But imagine if the Overdrive website made it as easy to find and borrow a book  as Amazon's makes it to get a Kindle Edition. Imagine that you didn't need an Adobe ID separate from your library card number. What would happen to the inconvenience barrier that allows publishers to still capture the high end of the price curve at full price? It seems clear to me that without the inconvenience barrier, publishers would quickly remove their desirable content from library lending programs to protect their retail sales.

So here's the paradox: libraries can only be successful at ebook lending if they do a bad job of it.

While I don't think it's tenable over the long term for libraries to specialize in inconvenience, I still think it's very important for libraries to be offering ebooks through services such as Overdrive. Even if the lending models of today turn out to be transitional, they help everyone involved become comfortable with library ebooks. Once the library ebook experience becomes embedded in our everyday lives, readers, publishers, authors and librarians will be able to recognize the novel digital distribution models that benefit everyone.