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How does Overdrive make money?
#1  rcentros 01-22-2018, 06:10 PM
I'm trying to figure out how Overdrive makes money. Selling books to the libraries? Charging their services to the libraries by the book loan? And an offshoot question ... does Overdrive pay Amazon to loan the Kindle book versions? Or does Amazon simply offer it as a service to keep people in their ecosystem? And at what point does Overdrive (Kobo) quit offering the service to Amazon (Kindle) books?

Lot of questions, probably not a lot of answers available, but I'm just curious how all this works.
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#2  DNSB 01-22-2018, 06:31 PM
Quote rcentros
I'm trying to figure out how Overdrive makes money. Selling books to the libraries? Charging their services to the libraries by the book loan? And an offshoot question ... does Overdrive pay Amazon to loan the Kindle book versions? Or does Amazon simply offer it as a service to keep people in their ecosystem? And at what point does Overdrive (Kobo) quit offering the service to Amazon (Kindle) books?

Lot of questions, probably not a lot of answers available, but I'm just curious how all this works.
You might want to check out a Forbes article ( You'll Need a PhD To Make Sense Of The Pricing Schemes Publishers Impose On Libraries for some information. If you get confused, don't worry, you are not alone.

As for Kindle books? The last time I talked to a librarian, the cost for Kindle was slightly higher than for epub. One interesting oddment from Amazon's site is that you can borrow Kindle ebooks from 11,000 libraries while the total number of public libraries in the USA is in the 16,500 range.

As to when Rakuten might drop Kindle support? My quick answer would be when they stop being able to make a profit.
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#3  AnemicOak 01-23-2018, 12:08 PM
Quote rcentros
I'm trying to figure out how Overdrive makes money. Selling books to the libraries? Charging their services to the libraries by the book loan?
They make money by selling eBooks & services to libraires & publishers, charging annual costs for maintenance and the like. By acting as a distributor for eBook retailers such as BAM who don't maintain their own DRM & content servers. They also have programs they sell to school & college libraries as well...


Quote
And an offshoot question ... does Overdrive pay Amazon to loan the Kindle book versions? Or does Amazon simply offer it as a service to keep people in their ecosystem? And at what point does Overdrive (Kobo) quit offering the service to Amazon (Kindle) books?
I don't know if Amazon pays OD, if OD pays Amazon or??? AFAIK it costs the library the same if there is a Kindle book or not as the library isn't sold a format other than an "eBook" which then includes whatever format(s) that title is available in be it ePub, PDF, open ePub or Kindle (info from an acquisitions librarian a while back).

Not knowing anything about OD & Amazon's contract with each other it's hard to say if/when things could change. Does OD stop Kindle lending because Rakuten doesn't want a Kobo competitor having a possible advantage in the US? Probably gotta be careful there, more likely Kobo develops/expands their own lending system, plus Kobo has largely gone very passive in the US market which is the only one with Kindle lending.

Does OD use Kindle lending (which is very popular) as leverage to get Amazon to start offering APub eBooks and Brilliance Audio audiobooks (which largely stopped being available around the time OD went DRM free on audio) to libraries???
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#4  rcentros 01-23-2018, 07:35 PM
Okay. Thanks. Now I've got I've got a little better grasp of the concept. Thanks for the explanations. I didn't realize that Overdrive provided their services for small(er) retailers as well. That makes sense.
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#5  nhgbslik 07-17-2019, 09:44 AM
I like to travel, and my Kindle helps me do that. Therefore, I like this service. But all developers want to make money from their ideas and I think this is normal. Sometimes on the Internet you can find mutually useful applications, inc. money making app. When you sell your unused SMS through applications you get money back. And that's fine.
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#6  disconnected 07-17-2019, 09:10 PM
I don't know much of anything about the subject, past or present, but I do remember reading one interesting article, back in 2011, about the contracts between Overdrive and Kansas libraries.

http://newsbreaks.infotoday.com/NewsBreaks/Kansas-Leading-the-Fight-for-Fair-Ebook-Access-in-Libraries-78302.asp
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