Late last year, the Penguin Group suspended libraries’ ability to lend the company’s new ebooks and audio downloads, pending evaluation. The evaluation is now complete and the news is not good. Yesterday, the company announced that they have terminated their contract with OverDrive. For the titles that libraries have already purchased, Library Journal reports OverDrive is negotiating a “continuance agreement,” to allow ongoing access.

The Penguin Group imprints include NAL, Berkley, Dutton, Riverhead, Viking, Dial Young Readers, Philomel, Putnam, and Speak.

The LJ story concludes with this chilling scenario;

…publishers [may] 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.

Coming from RH/Knopf in April in print and ebook

Top executives from ALA visited New York publishers this week to present the case for making ebooks available for library lending. When librarians found out that Random House had asked to be included, fears grew that the one house that has stood firm in making their titles available was about to change that policy.

The rumor was completely unfounded, however. RH told both Library Journal and Publishers Weekly that they simply wanted ALA to know that, “Our commitment to libraries, as imperative to our momentum, if not to our existence as publishers, is greater than ever.”

One small hitch, however, a price increase will take effect March 1.

Librarian response has been positive, since this model is preferable to windowing (not making ebooks available until a year or more after release), limiting the number of circulations, or not making ebooks available at all. As a result, publishing news aggregator, Publishers Lunch ”Automat,” commented in its link to the PW story, “It’s Interesting Times When Random House Raising Prices On Library eBooks Is Celebrated As Good News.”

Several libraries immediately placed orders on Random House titles to beat the price increase.

NBC News announced yesterday that it has created a new publishing division, NBC Publishing, to produce ebooks based on information from NBC’s news shows (including The Today Show and Nightline), archives and other divisions (NBC  Sports, Universal Pictures and Telemundo).

The head of the new division, NBC v-p Michael Fabiano, told Publishers Weekly that their first original e-book is coming next month, followed by about 30 titles over the  year. He also noted that NBC has the capability of distributing titles on their own.

He did not address whether titles will be available to libraries via OverDrive, but indications are hopeful. NBC has hired two people from publishing houses, both of which sell titles via OverDrive to libraries; Peter Costanzo from Perseus Book Group has been named as creative director and Brian Perrin, most recently with Rodale, is director of digital development. Also, an earlier enhanced ebook that NBC published with Running Press, From Yesterday to Today: Six Decades of America’s Favorite Morning Show (Dec., 2011), is available to libraries on OverDrive.

Reporting the story, the online movie news site, Deadline points out that ebooks are likely to evolve into a format separate from print books, with this quote from Cheryl Gould, NBC News SVP who is heading up the New York-based part of the new division,

As the tablet and e-reader markets continue to expand exponentially, and as the definition of “what is a ‘book?’” evolves, we see opportunities to bring readers a unique and immersive content experience. This business enables NBC to use video, audio, and current programming in creative new ways.

In a front-page article yesterday, the Washington Post highlights what librarians have been discussing for months; libraries can’t buy enough ebooks to meet demand, both because of “limited budgets” and because of “little cooperation from some publishers.”

Included is a chart that shows availability of best sellers in as ebooks in local libraries. Seven of the 20 titles are not available to libraries, most of the rest show heavy holds.

An eBook-only title appears at No. 8 on the current the NYT eBook Nonfiction list. It is just the second e-only title to hit that list, (after Sarah Burleton’s self-pubbed abuse memoir, Why Me?), according to tracking by Publishers Lunch.

The book, The POLITICO Playbook 2012: The Right Fights Back, by Mike Allen and Evan Thomas, is an instant digital book, the first in a series of four titles about the 2012 election to be published in a joint venture between the political news site, Politco and Random House. It is billed as “the first in-depth look inside the 2012 Republican race to the nomination.”

As with other Random House titles, it is available for library lending via OverDrive, in Kindle, ePub and audio formats. However, relatively few libraries seem to have ordered it, raising the question of how libraries discover and buy e-only titles.

Co-author Mike Allen, the chief White House correspondent for Politico, has promoted the book on several national television shows, including PBS’s Charlie Rose Show and  CBS Face the Nation (bringing a tongue-in-cheek protest from the site FishBowlDC.com that POLITICO’s constant promotion has reached the saturation point).

After OverDrive’s announcement that Penguin had decided to restore access to older titles for library lending via Kindle, Penguin released a statement that this will only be in effect through the end of the year, unless concerns about unnamed security issues are resolved (see last line)

Penguin USA took the decision yesterday [11/22] to withhold the supply of new digital titles from suppliers to US libraries until concerns about the security of the copyright of its authors have been resolved.

In addition, Penguin informed suppliers to libraries that it expected them to abide by existing agreements to offer older digital titles to libraries only if those files were held behind the firewalls of the suppliers.

Following receipt of this information, Overdrive, a supplier of ebooks to US libraries, removed “Get for Kindle” from its offering.

Penguin has subsequently been informed by Amazon that it had not been consulted by Overdrive about the terms of Penguin’s agreement with Overdrive. Amazon has undertaken to work with Penguin and Overdrive between now and the end of the year to address Penguin’s concerns. Penguin will, as a result, restore the supply of these titles until the end of the year in order to return the availability of older titles to all its digital customers.

This just posted on the OverDrive site. Note that new titles will not be available:

November 23: UPDATE Penguin eBook titles for lending to Kindle restored

‘Get for Kindle’ for all Penguin eBooks in your catalog has been restored.  Penguin titles are available for check out by Kindle users and the Kindle format will be available for patrons who are currently on a waiting list for a Penguin title. This does not affect new releases, which remain unavailable.

We apologize for the inconvenience this caused for your library and patrons.

At this time, no further information is available. We hope to share more details in the near future.

Now that Random House is the only publisher of the Big Six that sells ebooks to libraries without restrictions (HarperCollins limits the number of circulations to 26), we thought it was a good idea to check in with them, to see if they are standing firm.

In response to our inquiry, spokesperson Stuart Applebaum replied, ”Random House, Inc. is maintaining our current position regarding digital sales of our books to libraries while actively reviewing our position.”

Now is a good time to show library support for RH titles. Early reactions about galleys can be a critical element in developing buzz. Publishers regularly hear from booksellers (particularly via the IndieNext program), but less so from librarians.

Here’s what you can do:

Get to know which titles RH is working to build buzz for. Read Random Revelations, the RH Library Marketing catalog and the Random Revelations blog. Pay particular attention to the debuts, such a Chris Pavone’s The Expats (Crown, March) or Thomas Mallon’s Watergate (Delacorte, Feb; more about it here; Digital review copies available from Edelweiss), and titles positioned as breakouts, like Defending Jacob, by William Landay (Delacorte, Jan; more about it here; Digital ARC on Edelweiss).

Let RH know what you think of specific titles, via comments on the blog, or by writing directly to the RH Library Marketing staff (library@randomhouse.com). Tell them if reading a galley made you decide to order more copies, what audience you envision for particular titles, which ones you plan to use with reading groups. Give them quotes they can use in promo copy. This information is particularly helpful in the critical time before a book is published, the earlier, the better.

Random House, Inc. is a big company with many imprints and divisions. Get to know the players by studying the list on the RH site, which provides descriptions of each division and imprint, with links to their home pages.

Taking these steps will reinforce the point that libraries are key to building readership for books.

A new theory on why Penguin has pulled the plug on library lending of their ebooks came out in today’s Publishers’ Lunch. Surprisingly, it’s an issue that also concerns libraries.

According to the story, publishers are upset because OverDrive sends library users to Amazon’s site for Kindle downloading, essentially making Amazon the administrator of library lending and thus not “governed by publishers’ contracts with Amazon or OverDrive.”

Libraries, also, have expressed concern about sending users to Amazon. California librarian Sarah Houghton recorded a comment on the subject in October, in which she states, “when you check out a Kindle book from Overdrive, it dumps you out on the Amazon web site, and you conclude the transaction there. The transaction ends with a pitch for you to buy more books.” She also expresses concern about the data that Amazon gleans from library users. This subject was also explored by librarian Bobbi Newman on her blog post, Public Library eBooks on the Amazon Kindle – We Got Screwed.

Like many of you, we have wondered what Penguin means by saying they are re-evaluating lending eBooks via libraries because of “security risks.” We’ve asked Penguin to explain why library lending is more of a threat than selling through bookstores, but have not yet received a response.

In the absence of information, speculation is rife. In a story for Publishers Weekly, Andrew Albanese suggested that another issue might be at work,

OverDrive’s David Burleigh told PW there was no incident he was aware of at OverDrive where the “security” of any titles has been questioned or compromised, fueling speculation that Penguin’s actions may be directed at Amazon, which recently drew the ire of authors, agents, and publishers with the launch of its Amazon Prime lending model.

After Penguin’s announcement yesterday, we hope none of the rest of you are planning to disallow library lending of your ebooks. However, if you are considering such a move, please remember to let libraries know before the policy goes into effect.

Libraries are not only your customers, they are your business partners. They display and promote your books, make important One City and reading group picks, and educate the public on new technologies. Barnes and Noble stores regularly send their customers to local libraries to learn how to use the Nook. All over the country, libraries are offering classes on how to use eReaders (the Darien Library is holding one at the perfect time; the day after Christmas).

When a publisher changes its lending policy, libraries are the first to hear the complaints. Penguin cut off lending over the weekend, leaving library users first confused then angry. Since libraries didn’t receive notification until mid-day Monday, they were left blind-sided. If there’s one thing a librarian hates, it’s not being able to answer a question.

It’s unfortunate that Penguin’s move comes on the heels of Amazon allowing library lending via Kindles. Libraries are now facing increased demand and a reduced pool of titles. Please, publishers, respect the difficult position a change of policy puts them in.

Over the weekend, librarians and library users posted worried tweets that Penguin titles seemed to no longer be available for library lending on the Kindle.

That was confirmed today in a memo from the Penguin Group (which includes, Putnam, Viking, Berkley Trade and, of course, Penguin Press). One small ray of hope; Penguin is not calling this a done deal, but a “delay” in making titles available, while they evaluate “new concerns about the security of our digital editions” so they can “resolve these concerns with our business partners.” (The full statement, sent to EarlyWord by Penguin, is below). The final line of the statement may not be that comforting, “we want to assure you that physical editions of our new titles will continue to be available in libraries everywhere.”

Meanwhile, OverDrive has also issued a statement, which clarifies that “existing Penguin eBook titles in your library’s catalog are still available and additional copies can be added” in other formats. This means, for instance, that library users still have access to digital versions of The Help (but not on the Kindle).

OverDrive Statement

Last week Penguin sent notice to OverDrive that it is reviewing terms for library lending of their eBooks. In the interim, OverDrive was instructed to suspend availability of new Penguin eBook titles from our library catalog and disable “Get for Kindle”  functionality for all Penguin eBooks. We apologize for this abrupt change in terms from this supplier. We are actively working with Penguin on this issue and are hopeful Penguin will agree to restore access to their new titles and Kindle availability as soon as possible.

All existing Penguin eBook titles in your library’s catalog are still available and additional copies can be added.

Penguin Statement:

Penguin has been a long-time supporter of libraries with both physical and digital editions of our books.  We have always placed a high value on the role that libraries can play in connecting our authors with our readers. However, due to new concerns about the security of our digital editions, we find it necessary to delay the availability of our new titles in the digital format while we resolve these concerns with our business partners. Penguin’s aim is to always connect writers and readers, and with that goal in mind, we remain committed to working closely with our business partners and the library community to forge a distribution model that is secure and viable. In the meantime, we want to assure you that physical editions of our new titles will continue to be available in libraries everywhere.

Many libraries are now displaying the image on the left on their Web site home pages.

News sources are spreading the word. The story in today’s print New York Times, points out, “For years the availability of free e-books from libraries was something of an underground secret.”

No more, thanks to Amazon’s ability to get press attention. Libraries are now struggling to keep up with the increased demand.

The OverDrive update is in the midst of a roll out, which will be completed in a few days, so many libraries have to explain to customers that they can’t take the words “now available in over 11,000 libraries” at face value (have any of you posted “coming soon” notices on your sites?). In addition, not all titles are available; as OverDrive says on its blog, the update allows, “most existing eBooks in your library’s collection to be read on all Kindle devices.”

Several stories offer how-tos for users (including the reminder that a library card is required):

PCWorld – Borrowing Kindle E-Books: A Hands-On Guide

CNet – How to get free library books on your Kindle

The Seattle Times – Photo guide: How to check out Kindle library books

Amazon’s press release announcing that “Kindle and Kindle app customers can now borrow Kindle books from more than 11,000 local libraries in the United States,” launched several news stories, raising customer expectations. Many, however, took the word “now” in the press release at face value and expressed frustration on Twitter and Amazon’s Kindle Library Lending customer discussion forum, because they were unable to download Kindle titles from their local libraries.

OverDrive responded to our queries by saying that Seattle Public and King County (WA) Library System began the program on Monday. The roll out to the rest of the libraries on the OverDrive system began today and is expected to be complete within a few days.

You can refer confused customers to OverDrive’s press release.

Amazon is in talks with publishers about creating a “Netflix of books,” according to the Wall Street Journal. The story, based on unnamed publishing executives, has few details beyond that the program would give Amazon Prime customers free access to a limited number of older titles a month and would pay publishers a “substantial fee” for participating.

The story also says that several publishing executives did not warm to the idea, because it could lower the perceived value of books and create conflict with other retailers.

Amazon did not comment for the story.

Those who don’t understand libraries are already predicting such a move will “momentously affect” them.