OverDrive status

OverDrive is a digital content distributor that provides an extensive library of ebooks, audiobooks, and other digital media to public libraries, schools, and corporate institutions. Its business model is based on licensing digital content to these organizations for their patrons to borrow for free, with revenue coming from platform fees and the sale of digital content licenses. The company was founded in 1986 by Steve Potash as a digital document conversion company, but it pivoted in the early 2000s to focus on digital media for libraries, recognizing a massive opportunity in the digital lending space. A key part of OverDrive's strategy is its role as a middleman, serving as a vital link between publishers who own the digital content and libraries that want to offer it to their members. This has made OverDrive a dominant player in the market, with a market share estimated to be upwards of 90%. In 2015, the company was acquired by the Japanese e-commerce giant Rakuten, which also owns Kobo, a major e-reader and ebook platform. This was a strategic move that aligned OverDrive with a larger digital content ecosystem. However, in 2020, Rakuten sold OverDrive to the private equity firm KKR, which also owns other related assets like RBmedia, a major audiobook publisher, which consolidated KKR's position in the digital content industry. OverDrive's flagship consumer-facing app is Libby, which was launched in 2017 to provide a more intuitive and user-friendly experience than the older OverDrive app. Libby is a free-to-use application that allows users to access their library's digital collection, borrow books, and read or listen to them on their mobile devices. The app has been a major success, praised for its simple interface and seamless integration with library systems. The revenue model for libraries and schools is complex; they pay an annual platform fee to access the service and then purchase individual licenses for ebooks and audiobooks. These licenses can be perpetual, or they can expire after a certain number of checkouts or a period of time, which can make digital books more expensive for libraries than their physical counterparts.