KKR Adds RBMedia to Overdrive, and a New Wrinkle to Ongoing Digital Library Friction
In a not overly surprising move, KKR, the private equity firm that recently wrapped up a years-long acquisition of the Overdrive digital library platform, has added the library assets of RBMedia, another of its properties, to the platform. While this, of course, makes perfect sense from KKR’s perspective since it marries a huge digital content library with its delivery platform, one does wonder how this could eventually play into the ongoing digital battle with libraries currently being waged by the Big Five.
Overdrive has remained diplomatic in the fight up to this point, due to its position as the middleman in all of this, but has largely taken the side of libraries and argued against punitive pricing models (or channel appropriate pricing models, depending on your viewpoint). Which is what makes the acquisition of the RBMedia assets so interesting. With a huge library of content it essentially owns, the RBMedia materials give Overdrive some leverage to push back on pricing models that can be seen as unfriendly to libraries as it has it’s “own” content to fall back on that can be priced as it sees fit. This in turn gives it the opportunity to grow (an admittedly already large) market share and build even further leverage against publishers.
And where to go from there? Looking at the models set by other digital media companies, you could make the case that Overdrive may be best off developing its own content and acting as both publisher and distributor. But it’s not living with the same onerous licensing fees that say, Netflix, saddled itself with, which drove them to develop original content (and we’re also talking much smaller customer bases, and much smaller financials). But there is the small chance that this does lead to the balkanization currently plaguing TV/digital content, with publishers kicking the tires on their own platforms as a way to circumvent what they see as unfavorable terms. It’s not like the technology doesn’t already exist and could be quickly implemented.
That said, this seems unlikely (thank god—library digital content options are already a bewildering mess on the end-user side). Even with a surge in digital library patronage, the ultimate customer of any publisher library platform would be the librarian, who may be influenced by patron requests but isn’t under the same financial imperative that, say, a brick-and-mortar store is to stock high-demand titles. The true opportunity may be for smaller publishers willing to offer friendly terms through the Overdrive platform. If librarians do push back on Big Five pricing models, that’s more digital shelf-space for the small guys.
