Lisa Miller
Launched in 2017, the digital reading platform, Libby, offers users the ability to use their local library cards to receive free digital books, magazines, and audiobooks. Users can download their books to read offline and even transfer them to their Kindle app or device. This simple, free interface is currently used by over 22,000 public libraries and thousands of colleges, universities, corporate libraries and learning centers, making an immense amount of literary resources available to the public.[1] Libby has made a significant impact on readership, with libraries having lended over one billion titles through the app as of January 21, 2023.[2] In an increasingly digital world, Libby stands as a potentially pivotal player in further democratizing access to books by providing libraries with a platform for digital content, but at what cost?
OverDrive, a digital content distributor, owns Libby and acts as the middle man in the publisher-to-library transaction.[3] OverDrive buys the digital distribution rights of works directly from publishers, and OverDrive then sells lending rights of that media to libraries.[4] With these subsidiary rights, OverDrive has the authority to set the price, length, and general parameters of the licensing agreement with libraries.
This has resulted in OverDrive, a privately owned for-profit corporation, setting expensive lending agreements for public libraries, directly profiting off tax dollars. Licensing models can vary by title, so libraries predict future demand to buy the most suitable license.[5] Three common factors that impact the deal is reader concurrence (how many readers can read the document simultaneously), the number of times a given digital book may be loaned out, and the duration of the license.[6] By January 2021, the New York Public Library purchased 310 perpetual audiobook licenses of Barack Obama’s memoir, “A Promised Land,” at $95 each, totaling $29,450.[7] They also purchased 639 one- and two-year licenses for the e-book for $22,512.[8] Those digital rights cost as much as 3,000 copies of the consumer e-book (selling for eighteen dollars per copy).[9] But since the New York Public Library cannot purchase a consumer copy, they must go to companies like OverDrive who have bought the digital distribution rights, leading to the “the vast majority of OverDrive’s earnings” to come from these markups.[10]
While there are other similar apps, Libby has a large, growing presence in the digital readership market.[11] OverDrive announced the completion of its acquisition by global private equity and investment firm, KKR, on June 9, 2020.[12] KKR also acquired leading publishing house Simon & Schuster in October 2023.[13] With the increased funding and control over publishers, Libby has the potential to take a larger share of the market.
Several states have attempted to pass legislation that regulates the price of licensing agreements to combat these issues. Maryland enacted a statute in 2022 that required publishers to offer their e-books and audiobooks to Maryland public libraries “on reasonable terms.”[14] That was quickly struck down by U.S. District Court when a judge declared the Act “unconstitutional and unenforceable because it conflicts with and is preempted by the Copyright Act” since it forces publishers to forgo their exclusive right to determine how they distribute their copyrighted works.[15]
Author advocacy groups such as The Authors Guild argue that the problem is due to the lack of funding for libraries, “Public libraries deserve and require more public funding to meet the growing needs of library patrons, including the ability to purchase an adequate number of e-book licenses.”[16] However, the Trump administration’s federal funding freezes could not only hinder the plan to increase access to e-books, but roll back library funding altogether.[17]
Large scale digital readership signals a new era for libraries, but the expensive lending deals, halted legislation, and potential lack of federal funding pose a significant threat for libraries to participate.
[1]Public Libraries Lend One Billion Titles with the Libby Reading App, OverDrive (Jan. 25, 2023), https://company.overdrive.com/2023/01/25/public-libraries-lend-one-billion-titles-with-the-libby-reading-app/. [https://web.archive.org/web/20250206042923/https://company.overdrive.com/2023/01/25/public-libraries-lend-one-billion-titles-with-the-libby-reading-app/].
[2]Id.
[3]See, What is Libby?, Libby Help, https://help.libbyapp.com/en-us/6144.htm#:~:text=Libby%20works%20with%20public%20libraries,developed%20a%20collection%20with%20OverDrive. [https://web.archive.org/web/20250206043807/https://help.libbyapp.com/en-us/6144.htm].
[4]Daniel A. Gross, The Surprisingly Big Business of Library E-Books, The New Yorker (Sept. 2, 2021). https://www.newyorker.com/news/annals-of-communications/an-app-called-libby-and-the-surprisingly-big-business-of-library-e-books. [https://web.archive.org/web/20250206044640/https://www.newyorker.com/news/annals-of-communications/an-app-called-libby-and-the-surprisingly-big-business-of-library-e-books]
[5]Javier Celaya & Maribel Riaza, A Guide to Ebook Licenses Purchase Models for Libraries and Publishers, 3 (trans. Annabelle Prats. https://www.dosdoce.com/wp-content/uploads/2015/11/Guide-to-Ebook-Licensing-Purchase-Models-Bookwire-and-Dosdoce.pdf
[6]Id. at 4.
[7]Supra note 4.
[8]Id.
[9]Id.
[10]Id.
[11]See, e.g., Zlibrary: 20 Alternatives to Borrow Ebooks in 2024, Reedsy, https://reedsy.com/discovery/blog/zlibrary-alternatives. [https://web.archive.org/web/20250206050824/https://reedsy.com/discovery/blog/zlibrary-alternatives]
[12]KKR Completes Acquisition of OverDrive, OverDrive (June 9, 2020), https://company.overdrive.com/2020/06/09/kkr-completes-acquisition-of-overdrive/. [https://web.archive.org/web/20250206051416/https://company.overdrive.com/2020/06/09/kkr-completes-acquisition-of-overdrive/].
[13]Elizabeth A. Harris & Alexandra Alter, KKR Closes Deal to Buy Simon & Schuster, The New York Times (Oct. 30, 2023) https://www.nytimes.com/2023/10/30/books/kkr-simon-schuster-sale.html#:~:text=The%20private%20equity%20firm%20KKR,shift%20in%20the%20publishing%20industry. [https://web.archive.org/web/20250206051523/https://www.nytimes.com/2023/10/30/books/kkr-simon-schuster-sale.html].
[14]Mem. Op., 1, ECF No. 30. https://www.govinfo.gov/content/pkg/USCOURTS-mdd-1_21-cv-03133/pdf/USCOURTS-mdd-1_21-cv-03133-1.pdf.
[15]Id. at 2
[16]Update: The Authors Guild Statement on AAP’s Win in Maryland Ebook Licensing Case, The Authors Guild (June 14, 2022), https://authorsguild.org/news/authors-guild-statement-on-aaps-win-in-maryland-e-book-licensing-case/. [https://web.archive.org/web/20250206052459/https://authorsguild.org/news/authors-guild-statement-on-aaps-win-in-maryland-e-book-licensing-case/] (The Authors Guild CEO Mary Rasenberger stated in response to the Association of American Publishers (AAP) winning an injunction to block Maryland’s e-book licensing law.); See also NPR Podcasts, Why is your Libby hold taking so long? How can you be “in line” to borrow a digital book?, YouTube (Jan. 22, 2025), https://www.youtube.com/watch?v=aC2Y14ipb3U. [https://web.archive.org/web/20250206052550/https://www.youtube.com/watch?v=aC2Y14ipb3U].
[17]Barbara Sprunt, Elena Moore, Deidre Walsh, Asma Khalid, Tamara Keith, White House response adds to confusion on federal funding freeze, NPR (Jan. 29, 2025, 4:45 PM), https://www.npr.org/2025/01/29/g-s1-45313/trump-federal-funding-freeze-reversed. [https://web.archive.org/web/20250206053704/https://www.npr.org/2025/01/29/g-s1-45313/trump-federal-funding-freeze-reversed].