Penguin delivers crushing blow to ebook lending at public libraries

Starting today, Penguin is no longer selling ebooks or audiobooks to libraries through OverDrive.  Penguin is a “Big Six” publisher and represents a huge portion of the ebooks available at public libraries.  The impact of this move will be absolutely devastating on ebook lending at public libraries.

Penguin was one of the two remaining “Big Six” publishers that still offered most of their ebooks to libraries through OverDrive.  Last year, Penguin stopped lending ebooks at libraries for a few days.  They cited “concerns about the security of our digital editions” as the primary reason to stop library lending back then.  When Penguin restored ebook lending at libraries just a few days later, they mentioned that Amazon’s decision to work with them to resolve their security concerns was the reason they were able to restore their ebooks at libraries.

So Penguin has been pretty consistent with their message of security concerns with Amazon.  But that seems a little strange.  Amazon is the largest online retailer on the planet and probably has some of the best security in the world for their transactions.  How is it possible that a book publisher has a problem with Amazon’s security for loaning out their ebooks?  Especially when that same book publisher is perfectly comfortable with Amazon selling those same ebooks?

INFOdocket posted an email sent yesterday from OverDrive to its partners:

Starting tomorrow (February 10, 2012), Penguin will no longer offer additional copies of eBooks and download audiobooks for library purchase. Additionally, Penguin eBooks loaned for reading on Kindle devices will need to be downloaded to a computer then transferred to the device over USB. For library patrons, this means Penguin eBooks will no longer be available for over-the-air delivery to Kindle devices or to Kindle apps.

We are continuing to talk to Penguin about their future plans for eBook and digital audiobook availability for library lending.

The email to OverDrive partners says that libraries can still loan out any ebooks that they already purchased, but they can no longer lend them from their website directly to the Kindle device.  Penguin is requiring that ebooks be downloaded to a computer first and then loaded onto the Kindle via USB.  This requirement gives some credibility to Penguin’s security concerns.

Penguin is perfectly comfortable with library patrons borrowing their ebooks through OverDrive as long as they download them to their PC first and then load them onto their Kindle.  This makes it seem like there might be a security problem with downloading a loaned ebook from Amazon directly to a Kindle device.

Library patrons that want to borrow an ebook currently go the their library’s site hosted by OverDrive.  They find the title they want and then enter their library card info.  They are then directed to where they can login and download the ebook onto their Kindle.  Penguin’s requirement seems to indicate that they have an issue with the final step of downloading the ebook directly to a Kindle.

Of course there are several other possibilities for Penguin’s move.  The book publishers believe that loaning out ebooks at libraries will result in lower sales of those ebooks.  This is why only one of the “Big Six” publishers is fully participating in library lending of their ebooks.

Another possibility is that Penguin does not want to give lending statistics to Amazon.  Since the final step is completed at Amazon, they will gain a lot of valuable user data through library lending.

Penguin might be angry at Amazon because of their Kindle Owners’ Lending Library or their moves into publishing.  Pulling the plug at libraries could be a way for Penguin to strike back.

It’s hard to know for sure why Penguin has decided to stop lending their ebooks out at libraries.  All we know for sure is that library patrons are going to have a much smaller selection of ebooks to choose from.