E-book distributor’s woes could harm libraries

David Rothman writes “Librarians would do well to keep an eye on OverDrive, a major e-book distributor that has done laudable work in the library area but may be suffering cashflow problems. The company says business is fine and revenue is growing, but so far it won’t tell me if it’s turning a profit, or how far off one could be. If cashflow isn’t suffient and replacement capital isn’t present, OverDrive could fold–not a Good Thing for either the 707 publishers or 103 library clients that OverDrive says it has.

Disturbingly, at least some publishers have experienced problems getting paid by the company. ” In April 2003,” reports Mary Z. Wolf at Hard Shell Word Factory, “I received payment for 1-1/4 years of sales. However, I haven’t received a cent since then. I’ve sent emails, snail mail, voice mail messages, actual voice calls, and even emailed” the head of OverDrive.

Some in e-books wonder if OverDrive might be wining and dining libraries to expand that business while making pubishers serve as bankers.

Also, publishers’ terms at OverDrive have suddenly changed for the worse. No matter how healthy OverDrive is or isn’t, the question arises of whether libraries may suffer similar treatment in the future as they rely more on OverDrive. Will they be wooed, then betrayed?

Late last week, a small Oregon publisher contacted TeleRead to complain that OverDrive wanted to slap storage fees on e-books–a highly unusual practice for a distributor of OverDrive’s kind. What’s more, the new charges discriminate horrendously against tiny publishers that deal with the company’s Content Reserve branch. Some will pay up to 50 time more for storage than large publishers! Imagine, $300 a year for one book. Not the best sign, in terms of diversity of reading matter at libraries.

Fodder for the March 16 library conference organized by the Open eBook Forum, of which OverDrive President and CEO Steve Potash is president?

More at TeleRead.”

David Rothman writes “Librarians would do well to keep an eye on OverDrive, a major e-book distributor that has done laudable work in the library area but may be suffering cashflow problems. The company says business is fine and revenue is growing, but so far it won’t tell me if it’s turning a profit, or how far off one could be. If cashflow isn’t suffient and replacement capital isn’t present, OverDrive could fold–not a Good Thing for either the 707 publishers or 103 library clients that OverDrive says it has.

Disturbingly, at least some publishers have experienced problems getting paid by the company. ” In April 2003,” reports Mary Z. Wolf at Hard Shell Word Factory, “I received payment for 1-1/4 years of sales. However, I haven’t received a cent since then. I’ve sent emails, snail mail, voice mail messages, actual voice calls, and even emailed” the head of OverDrive.

Some in e-books wonder if OverDrive might be wining and dining libraries to expand that business while making pubishers serve as bankers.

Also, publishers’ terms at OverDrive have suddenly changed for the worse. No matter how healthy OverDrive is or isn’t, the question arises of whether libraries may suffer similar treatment in the future as they rely more on OverDrive. Will they be wooed, then betrayed?

Late last week, a small Oregon publisher contacted TeleRead to complain that OverDrive wanted to slap storage fees on e-books–a highly unusual practice for a distributor of OverDrive’s kind. What’s more, the new charges discriminate horrendously against tiny publishers that deal with the company’s Content Reserve branch. Some will pay up to 50 time more for storage than large publishers! Imagine, $300 a year for one book. Not the best sign, in terms of diversity of reading matter at libraries.

Fodder for the March 16 library conference organized by the Open eBook Forum, of which OverDrive President and CEO Steve Potash is president?

More at TeleRead.”