Sign posted in the San Rafael Public Library

Fallout continues over Penguin’s decision to terminate its contract with library ebook distributor OverDrive — an action that meant its ebooks would not be available for libraries.

As we noted in our earlier report, Penguin has some legitimate concerns — for example, as Michael Kelly described in in a Library Journal report, there’s the concern …

… that if library loans become too “frictionless,” in other words, do not involve a physical trip to the library to borrow and return a book, that it will eat into their sales.

The desire to increase this friction may lead the recalcitrant publishers to demand a business model in which they will only make their ebooks available to public libraries if they are used in the library or if a patron is required to bring their device to the library and load the title onto the device in the library, then bring it home.

But the timing of the announcement — coming right after Random House had announced a deal with libraries for unrestricted lending, and right after meetings with American Library Association executives — made it seem something adversarial, and deliberately so.

Reaction amongst librarians was swift, and emphatic. Sarah Houghton, Director of California’s San Rafael Public Library, posted a sign in her library (see photo right), which she also made available for anyone to download on Google Docs, identifying not only Penguin but all the major publishers who, as a statement on the library’s website put it, “currently refuse to sell or license eBooks to libraries” — including names and phone numbers of people to contact at each one.

“I think it’s about damn time we, as library professionals, started getting the public riled up about this,” Houghton explains in a post on her personal blog, Librarian in Black. “I am tired of publishers walking away from the library table.”

Well, Penguin would counter that, as it said in its announcement, it actually plans to keep negotiating, but there’s no denying that the optimistic mood in the wake of the Random House announcement has vaporized. As a report by Steve Woods at Technorati puts it, “It feels too much like we’re all beginning to break up way too early in this new relationship …”

At INFOdocket, Gary D. Price offers some insight in this post about another reason Penguin may have done what it did — and it has something to do with you-know-who:

We are told that publisher contracts with OverDrive allow them to store and serve library end users ebooks. That’s it.

OverDrive does NOT have permission to first authorize the lending of an ebook to a library end user and then forward the request for actual distribution and tracking of the title to Amazon.com or ANY other retailer. Similarly, in most situations*, publishers do not permit retailers to lend ebooks directly to end users.

Finally, in November and again yesterday we noted an LJ article (November 23, 2011) that included the following comment from Penguin:

Penguin has subsequently been informed by Amazon that it had not been consulted by Overdrive about the terms of Penguin’s agreement with Overdrive.

You have to wonder what did OverDrive tell publishing partners about how Kindle lending would work?  What didn’t they tell them?

In another INFOdocket post, Price expounds on this, reprinting the email notice Overdrive sent to its partners, and noting that it says Penguin’s move “means Penguin eBooks will no longer be available for over-the-air delivery to Kindle devices or to Kindle apps.”

Says Price,

The end of over-the-air downloads to Kindle devices is interesting. Does it say something about a security issue in Amazon’s wireless download system? Something else? How about trying to make things a bit tougher for library users/OverDrive customers that will slowdown loans OR simply OverDrive and Amazon now following the Penguin’s contract?

In November Penguin said that Amazon.com was never told about the terms of the Penguin/OverDrive contract. Perhaps it said that wireless downloading was not permitted?

Otherwise, perhaps it’s some form of retribution directed at OverDrive  with Amazon.com or maybe we’ve watched to many reruns of The Soprano’s.

Penguin says that it will continue negotiating with the ALA and that it will do so with good will, and there’s every reason to believe them. The bad press isn’t doing Penguin any good, and the company didn’t get to where it is by being stupid — it’s not only good business to sell books to libraries and develop new generations of readers, but most people at Penguin, as in most of publishing, grew up in libraries and see them as true partners to the cause.

Still, given the speculation as to the company’s reasoning for doing what it did, and the quick response of the library community, it’s a safe bet that whatever develops isn’t going to be quite as “frictionless” as Penguin had hoped.