WEBVTT - Steve Potash 0:00:08.720 --> 0:00:14.239 Welcome back to Bob WEFs podcast. My guest today is 0:00:14.280 --> 0:00:21.680 Steve Hotel, President CEO of Overdrive. Steve, what exactly is Overdrive? 0:00:23.600 --> 0:00:23.920 Bob? 0:00:24.000 --> 0:00:28.400 Overdrive is a mission based company that has, over the 0:00:28.480 --> 0:00:31.560 last forty years been one of the pioneers in the 0:00:31.600 --> 0:00:34.680 new format of reading books on the screen, which we 0:00:34.760 --> 0:00:38.559 all know today as an ebook, as well as digital 0:00:38.600 --> 0:00:42.000 audio books that you could listen to anytime, anywhere while 0:00:42.040 --> 0:00:46.760 you're walking or in the car commuting. And as a result, 0:00:46.800 --> 0:00:51.159 the Overdrive business has become the single largest supplier of 0:00:51.360 --> 0:00:57.480 digital books to schools, libraries, universities, and other institutions globally. 0:00:58.320 --> 0:00:59.760 As a result of this work. 0:00:59.560 --> 0:01:03.160 Over the list twenty five to twenty five plus years. 0:01:03.720 --> 0:01:07.080 Okay, just to sort of define what's going on here, 0:01:07.080 --> 0:01:10.520 are clear things up. If I am getting a book 0:01:10.640 --> 0:01:13.480 from Amazon, I'm buying the book. Are you involved in 0:01:13.520 --> 0:01:17.200 that transaction at all? 0:01:17.400 --> 0:01:17.480 No. 0:01:17.959 --> 0:01:21.600 When you are buying an ebook from Amazon, you're purchasing 0:01:21.720 --> 0:01:26.319 an ebook in their Kindle format, either to read on 0:01:26.400 --> 0:01:30.040 an ein Kindle device or to read on a tablet 0:01:30.120 --> 0:01:33.560 or your phone on the Kindle app. So Amazon has 0:01:33.600 --> 0:01:38.400 built their own ecosystem and a proprietary file format, the 0:01:38.520 --> 0:01:42.679 Kindle format. They built their business on some of the 0:01:42.760 --> 0:01:46.640 earlier work that Overdrive did. Because Kindle was introduced by 0:01:46.680 --> 0:01:52.280 Amazon in two thousand and seven. Oversdrive started digitizing books 0:01:52.280 --> 0:01:57.520 on floppy diskets in the nineteen eighties. So I am 0:01:57.600 --> 0:02:01.520 the proud recipient of an honor in this industry. I've 0:02:01.560 --> 0:02:05.000 been part of more digital book failures than any person 0:02:05.440 --> 0:02:10.400 alive because I started too early putting books on floppy diskets, 0:02:11.160 --> 0:02:14.680 and then a decade on CD RAM and by the 0:02:15.240 --> 0:02:18.560 late nineties mid nineties, when this Internet thing showed it 0:02:18.560 --> 0:02:23.160 had some promise, Overdrive was the pioneers that helped create 0:02:23.200 --> 0:02:27.480 the environment for the ebook and the audiobook markets today. 0:02:27.680 --> 0:02:31.160 So we've been into this business much longer than most 0:02:32.160 --> 0:02:35.480 and we participate in many aspects of it. But Amazon 0:02:35.800 --> 0:02:38.280 is a direct to consumer closed system. 0:02:39.240 --> 0:02:43.320 Okay, so what format do you distribute books in? 0:02:45.160 --> 0:02:50.160 We distribute books in most of the popular open industry standards, 0:02:50.760 --> 0:02:53.720 and there is an industry standard that has evolved as 0:02:53.720 --> 0:02:58.399 a result of overdrives participation twenty five years ago, when 0:02:58.440 --> 0:03:02.000 this nascent book end was trying to see about how 0:03:02.040 --> 0:03:06.720 they might grow a digital electronic book future. Today it's 0:03:06.800 --> 0:03:13.639 known as epop EPUB, and that is a global acronym, 0:03:13.880 --> 0:03:16.560 just like your listeners would be familiar with the MP 0:03:16.639 --> 0:03:23.680 three file format. It's an open industry standard that allows 0:03:23.960 --> 0:03:29.160 any content creator to package their written work in a 0:03:29.200 --> 0:03:35.520 digital container and make it broadly available for retail booksellers 0:03:35.560 --> 0:03:38.440 for their own website, and it could be used by 0:03:39.280 --> 0:03:45.480 thousands of devices and reading apps. That is kind of 0:03:45.480 --> 0:03:48.800 the ubiquitous ebook standard today, and that's for books and 0:03:48.920 --> 0:03:52.320 texts and images you read on a screen in the 0:03:52.600 --> 0:03:57.520 audio space. Overdrive has its own proprietary apps, but it 0:03:57.600 --> 0:04:01.680 is all really based upon the original audio files we 0:04:01.840 --> 0:04:06.440 get from the audio publishers and their suppliers, and we 0:04:06.520 --> 0:04:10.480 are leveraging some of the open industry standards and then 0:04:10.520 --> 0:04:15.480 applying as required by the rights holders the controls that 0:04:15.680 --> 0:04:21.240 manage access copyright digital rights management. So we are based 0:04:21.279 --> 0:04:25.600 on open industry standards and then to meet the requirements 0:04:25.600 --> 0:04:31.480 of the rights holders, we utilize copyright protection tools. 0:04:31.920 --> 0:04:35.239 Okay, if I'm a user and I own a computer, 0:04:35.800 --> 0:04:40.000 can I write something and turn it into EPUB format? 0:04:41.080 --> 0:04:41.839 Absolutely. 0:04:42.560 --> 0:04:48.240 EPUB has been an adopted industry wide standard for mobile 0:04:48.320 --> 0:04:54.680 online reading for now, going back twenty plus years. Many 0:04:54.720 --> 0:04:59.679 of the tools like Microsoft Office and Word will allow 0:04:59.720 --> 0:05:02.240 you to take a word document and save it as 0:05:02.240 --> 0:05:07.440 an EPUB. Now EPUB actually in the technical stance is 0:05:07.480 --> 0:05:12.960 a variety of what's called XHTML. So the web standards 0:05:13.000 --> 0:05:17.520 of XML, HTML and many of the open metadata standards 0:05:17.560 --> 0:05:21.120 of the Internet are also utilized in the in the 0:05:21.160 --> 0:05:26.000 ebook world in the epook standard. So there's free tools 0:05:26.400 --> 0:05:29.800 to take your web content. There are many tools to 0:05:29.880 --> 0:05:34.240 convert a PDF into epub, and there are lots of 0:05:34.400 --> 0:05:39.479 service based industries working inside publishing houses or as a 0:05:39.520 --> 0:05:45.560 service bureau to help content creators and publishers transition their 0:05:45.640 --> 0:05:48.719 files into an ebook marketplace. 0:05:49.279 --> 0:05:53.960 Okay, needless to say, publishers own the rights. What is 0:05:54.000 --> 0:05:56.880 the relationship between overdrive and publishers. 0:05:58.240 --> 0:06:03.640 Well, I'm going to just comment on your statement. Publishers 0:06:03.920 --> 0:06:09.360 own the rights to distribute and merchandise and build you know, 0:06:09.520 --> 0:06:10.880 the market, and promote and. 0:06:10.960 --> 0:06:11.680 Sell the books. 0:06:12.320 --> 0:06:14.599 But the ownership of the rights is a little bit 0:06:14.680 --> 0:06:21.040 more diverse. We see that today's world authors sometimes still 0:06:21.360 --> 0:06:26.640 control all of the rights. So our relationship, as you 0:06:26.839 --> 0:06:33.479 appropriately stated, is with publishers, aggregators, or in some limited cases, 0:06:33.880 --> 0:06:38.919 we work directly with the publisher to get permission for 0:06:39.040 --> 0:06:43.760 the digital book file to have overdrives right to sell it, 0:06:43.960 --> 0:06:51.080 market it, and fulfill it worldwide based on the permissions granted. 0:06:51.920 --> 0:06:54.760 And I know your audience is very familiar with the 0:06:54.800 --> 0:06:59.000 complexity of the music space and copyright and mechanical and 0:06:59.040 --> 0:07:04.839 license fee and royalties. There is a similar hierarchy and 0:07:05.200 --> 0:07:10.160 rights structure in publishing, less complicated than music. I'll thankfully say, 0:07:11.280 --> 0:07:16.520 but for every title, Overdrive seeks permission from the rights holder. 0:07:16.600 --> 0:07:19.200 And let's just say it's a publisher like Penguin, Random 0:07:19.240 --> 0:07:22.440 House or Simon and Schuster, that they are giving us 0:07:22.480 --> 0:07:25.800 the rights to the Stephen King novel that we could 0:07:25.840 --> 0:07:31.320 sell in the territories where they have the permissions. So 0:07:31.480 --> 0:07:34.800 for let's say Simon and Schuster us they may give 0:07:34.880 --> 0:07:38.480 us a new Stephen King novel, and those permissions may 0:07:38.520 --> 0:07:42.480 be granted for North America. Because Stephen King and his 0:07:42.600 --> 0:07:47.480 agent may have done a deal for ebook distribution in London, 0:07:47.760 --> 0:07:51.640 or in Germany or in Australia with a different publisher, 0:07:53.160 --> 0:07:56.360 we have to go in every territory to those that 0:07:56.480 --> 0:08:00.760 have the rights to distribute the work in the territory. 0:08:01.800 --> 0:08:04.720 And then similarly, we work with the publisher to get 0:08:04.720 --> 0:08:10.520 the permission on how they want to enable access for 0:08:11.120 --> 0:08:15.320 the institutional buyer and what rights they have with that 0:08:15.480 --> 0:08:19.560 digital file. I know that sounds like it's complex, and 0:08:19.680 --> 0:08:20.720 unfortunately it is. 0:08:21.760 --> 0:08:24.320 But we are best known, BOB. 0:08:24.800 --> 0:08:30.640 For the dramatic adoption of ebook and audiobook usage from 0:08:30.640 --> 0:08:33.840 our nation's public libraries. So I'm going to use that 0:08:33.920 --> 0:08:36.440 as a use case to kind of bring down to 0:08:36.880 --> 0:08:41.800 you more day to day how this impacts your listeners. 0:08:42.440 --> 0:08:45.840 Let's say you hear about a new bestseller that you're 0:08:45.920 --> 0:08:49.720 excited to listen to on your commute to work, and 0:08:49.760 --> 0:08:54.200 you're in love with audiobooks, And yes, we do educate 0:08:54.559 --> 0:08:59.040 millions of listeners that instead of paying for a subscription 0:08:59.840 --> 0:09:04.880 and a credit card and ads, your public library is 0:09:04.920 --> 0:09:12.000 an unbelievable, untapped off in resource for access to lifelong books. 0:09:12.040 --> 0:09:16.320 For free ebooks you can read on your kindle, Audiobooks 0:09:16.360 --> 0:09:18.960 you can listen to on your commute or on your walk, 0:09:19.040 --> 0:09:22.040 or on your tablet. And so if you are a 0:09:22.080 --> 0:09:26.200 patron of a public library, as public library patrons have 0:09:26.280 --> 0:09:28.680 been doing for one hundred and almost two hundred years 0:09:28.679 --> 0:09:32.040 in this country, you walk into a public library if 0:09:32.040 --> 0:09:35.600 there's a popular book, they may have enough units and 0:09:35.679 --> 0:09:39.200 it's available for you to borrow now. And in the 0:09:39.240 --> 0:09:43.440 physical print world, if there's if it's in demand and 0:09:43.520 --> 0:09:46.640 they're all checked out, you would add yourself to a 0:09:46.679 --> 0:09:50.960 wait list or place a hold, and when the book 0:09:51.000 --> 0:09:55.040 becomes available, the library would notify you your books available, 0:09:55.200 --> 0:10:00.240 pick it up. We have created a replication of that 0:10:00.480 --> 0:10:05.640 experience going to your digital virtual branch online searching and 0:10:05.760 --> 0:10:09.080 browsing for a book of interest, and with one click 0:10:09.240 --> 0:10:14.120 you can immediately borrow the book. But for let's say 0:10:14.160 --> 0:10:19.800 this Stephen King new novel, Simon and Schuster as others, 0:10:20.000 --> 0:10:24.840 have created permissions that if a user if an institution 0:10:25.240 --> 0:10:27.520 and bob you're in the Los Angeles area and we 0:10:27.600 --> 0:10:32.280 have a dramatic, fabulous partnership with the Los Angeles Public Library. 0:10:33.080 --> 0:10:35.360 So if a listener is going to Los Angeles Public 0:10:35.400 --> 0:10:38.680 Library excited about the new Stephen King, Simon and Schuster book, 0:10:39.040 --> 0:10:42.800 they may see that the library has of the e 0:10:42.920 --> 0:10:45.360 book or the audiobook, one hundred copies of the e 0:10:45.480 --> 0:10:49.240 book one hundred copies of the audiobook, depending. 0:10:48.800 --> 0:10:50.200 On when they check it in. 0:10:51.040 --> 0:10:54.000 They may see that they're all checked out, and in 0:10:54.080 --> 0:10:56.800 our app called Libby, and the app is free and 0:10:56.840 --> 0:10:58.040 the books are free from. 0:10:57.880 --> 0:11:00.560 Your library Libb Libby. 0:11:01.160 --> 0:11:04.319 They may see they're all checked out and you are 0:11:04.440 --> 0:11:08.280 number fifty two on the wait list. Libby will also 0:11:08.440 --> 0:11:12.439 say you have approximately like a one week wait. So 0:11:12.480 --> 0:11:16.320 we have replicated the experience that in the sense where 0:11:16.320 --> 0:11:20.040 the publisher and the permissions are to only sell the 0:11:20.080 --> 0:11:24.760 library a number of units, they mandate that for every 0:11:24.880 --> 0:11:29.679 unit the library buys, just like physical one person can 0:11:29.760 --> 0:11:33.040 borrow at a time. If that is the model that 0:11:33.120 --> 0:11:37.360 the library acquires the book under the ebook or the audiobook, well, 0:11:37.400 --> 0:11:40.600 then the experience is very similar to the print or 0:11:40.640 --> 0:11:44.760 the physical CD. For the audio, one user at a time. 0:11:45.240 --> 0:11:50.760 If they're all checked out, the patron clicks put me 0:11:50.800 --> 0:11:54.880 on the wait list, Libby will automatically notify them the 0:11:54.920 --> 0:11:55.920 book is available. 0:11:56.040 --> 0:11:56.679 Click here to. 0:11:56.640 --> 0:12:00.720 Start enjoying your read or enjoying your listen. That is 0:12:00.800 --> 0:12:04.559 the model that built the ebook and audiobook lending in 0:12:04.640 --> 0:12:10.480 public library. So that is kind of the baseline of 0:12:10.559 --> 0:12:15.000 the permissions we as publishers. For they set the price. 0:12:15.760 --> 0:12:19.920 We respect the territorial permission of the author and the publisher, 0:12:20.880 --> 0:12:25.679 and for every title we seek to get multiple permissions 0:12:26.520 --> 0:12:30.640 so that our libraries, our schools, our universities, our corporate 0:12:30.760 --> 0:12:37.640 learning centers can actually acquire the digital book with multiple 0:12:37.679 --> 0:12:40.120 ways to make it available. I shared with you the 0:12:40.120 --> 0:12:43.200 most common way, one user at a time. They buy 0:12:43.240 --> 0:12:46.160 ten copies, ten users can read it, then the rest 0:12:46.240 --> 0:12:47.600 have to wait till it's the return. 0:12:48.760 --> 0:12:58.600 Okay. Overdrive only works with institutions, and it only is 0:12:58.720 --> 0:13:02.400 on the public library side, or is there any conventional 0:13:02.440 --> 0:13:03.200 retail at all. 0:13:04.880 --> 0:13:09.120 Overdrive has a thirty year history of being behind the 0:13:09.240 --> 0:13:13.640 scenes with ebook and audiobook fulfillment for a number of 0:13:13.720 --> 0:13:19.760 direct to consumer retail experiences. But we have that side 0:13:19.760 --> 0:13:24.679 of the Overdrive business is much smaller today, and today 0:13:24.800 --> 0:13:28.400 we are focused and ninety x percent of our revenue 0:13:29.080 --> 0:13:32.439 that we are the single largest supplier of digital books, 0:13:32.760 --> 0:13:36.120 books you can read and those are for all ages 0:13:36.200 --> 0:13:42.880 in all categories. Digital magazines and periodicals, manga, graphic novels 0:13:42.880 --> 0:13:49.360 and comics, audiobooks and streaming video and we service every 0:13:49.640 --> 0:13:54.559 type of institution. We're best known for the success Libby 0:13:54.840 --> 0:13:58.840 and Canopy. Canopy is our streaming It's like Netflix for 0:13:59.000 --> 0:14:05.439 Library Canopy with the ka NPY similar to you can 0:14:05.600 --> 0:14:10.640 cut your subscription to Audible or other paid services with 0:14:10.920 --> 0:14:15.640 Libby for ian audio or audiobooks. Similarly for the streaming 0:14:15.760 --> 0:14:21.200 video platform. Canopy has the largest collection of feature films, 0:14:21.240 --> 0:14:27.520 documentary and children and world cinema, more than Netflix. And 0:14:27.560 --> 0:14:31.040 again with the library card, the app is free and 0:14:31.120 --> 0:14:35.240 the content is free. We service public libraries and in 0:14:35.280 --> 0:14:37.960 the US where in every zip code in North America, 0:14:38.240 --> 0:14:44.360 US and Canada. We serve about sixty percent of the 0:14:44.400 --> 0:14:48.160 schools in the United States, so that's pre K through 0:14:48.240 --> 0:14:55.280 high school. Overdrive is globally supplying ebooks, audiobooks, streaming video, magazines, 0:14:55.360 --> 0:15:02.400 and content to universities, colleges. We are in thousands of 0:15:02.760 --> 0:15:09.200 corporate knowledge centers. We supply the US military, professional associations 0:15:09.240 --> 0:15:15.760 and the like. So we supply almost every form of library, public, academic, school, 0:15:15.960 --> 0:15:22.560 corporate knowledge center, government, military, prison libraries. That is where 0:15:22.600 --> 0:15:27.880 we are best known worldwide, and today we are available 0:15:27.880 --> 0:15:35.360 in over ninety thousand institutions. So pretty much anywhere humans exist, 0:15:36.280 --> 0:15:42.440 they are using our Libby oursa, our Canopy apps or 0:15:42.560 --> 0:15:47.880 platforms on set tops or browsers to benefit from content 0:15:48.040 --> 0:15:53.480 lifelong free content courtesy of their local library, university, or school. 0:15:54.360 --> 0:15:59.640 Okay, just to do some backfill here. Independent retailers are 0:15:59.680 --> 0:16:05.400 now selling digital books. Who is doing the fulfillment on that? 0:16:05.400 --> 0:16:10.400 That is today being dramatically supported by bookshop dot org, 0:16:10.840 --> 0:16:15.840 our good friends out of Brooklyn. In that past, Overdrive 0:16:15.960 --> 0:16:19.000 had a role in it. And like I said, if 0:16:19.040 --> 0:16:21.560 this was if we were doing this interview twenty years ago, 0:16:21.680 --> 0:16:25.320 I would be listing a big litany of publishers that 0:16:25.360 --> 0:16:29.840 we are powering direct to consumer ebook, audiobook or retail bookstores. 0:16:31.440 --> 0:16:33.920 When I said, I've been part of more ebook failures. 0:16:33.960 --> 0:16:37.200 Bob is an entrepreneur born and raised in Cleveland, Ohio. 0:16:37.280 --> 0:16:39.400 I came home to my family said this is it. 0:16:40.000 --> 0:16:43.200 We are now going to be the ebook supplier for borders. 0:16:43.280 --> 0:16:46.000 I just came back from ann Arbor. Well that wasn't it. 0:16:46.800 --> 0:16:50.080 You know, years before I said this is it, we 0:16:50.160 --> 0:16:52.680 are going to be the number one e book supplier 0:16:52.720 --> 0:16:57.800 and one billion cell phones, the biggest mobile cell phone worldwide. 0:16:57.840 --> 0:17:00.800 We just did no Kia. Well that was a few 0:17:00.840 --> 0:17:05.359 months before the iPhone was launched, you know, So you 0:17:05.440 --> 0:17:09.800 know we work today. Retail independent bookstores are very well 0:17:09.840 --> 0:17:13.160 supported by my buddy Andy Hunter at bookshop dot org. 0:17:14.040 --> 0:17:16.879 And Andy is doing a great job letting all the 0:17:16.960 --> 0:17:21.280 independents add a full catalog of Ian audiobooks so they 0:17:21.280 --> 0:17:24.280 can compete with the Amazons and the and some of 0:17:24.320 --> 0:17:25.360 the other big boxes. 0:17:33.359 --> 0:17:38.520 Okay, do you have any competitors in this sphere? Is 0:17:38.560 --> 0:17:43.679 there somebody else who's licensing written words audio books and 0:17:43.920 --> 0:17:45.959 providing them to institutions. 0:17:46.640 --> 0:17:51.080 Yes, we do, and in the in the markets we 0:17:51.160 --> 0:17:56.000 serve because we are global. Business started here from Cleveland, Ohio. 0:17:56.760 --> 0:18:02.520 I'm delighted to say that we created the category and 0:18:02.560 --> 0:18:06.280 we were the ones that pioneered early ebooks. And then 0:18:06.400 --> 0:18:11.159 about twenty five years ago launched the first public library 0:18:11.200 --> 0:18:16.800 popular digital book service. And that was years before Kindle 0:18:17.080 --> 0:18:22.280 or iPads and you know the current ebook environment. And 0:18:22.800 --> 0:18:27.879 we've over the years, we've had the traditional booksellers, the 0:18:27.960 --> 0:18:33.439 schools and libraries tried to develop a digital business because 0:18:33.480 --> 0:18:36.399 they had all of the embedded relationships with the authors 0:18:36.480 --> 0:18:39.120 in the supply chain. They knew all the publishers, they 0:18:39.160 --> 0:18:43.600 had the relationships with the rights holders. They service the 0:18:43.720 --> 0:18:48.440 library and university, and you know the big school district communities, 0:18:49.240 --> 0:18:51.760 so these would be the Baker and Taylors and the 0:18:51.920 --> 0:18:55.960 Ingram book groups or in the k twelve defilettes. So 0:18:56.720 --> 0:19:03.840 all of those traditional booksellers to schools, libraries, institutions, every 0:19:03.880 --> 0:19:08.320 one of them then developed a digital extension to their 0:19:08.359 --> 0:19:12.160 physical or their print businesses, and many of those are 0:19:12.200 --> 0:19:14.959 still in the market today. So we have competitors with 0:19:15.400 --> 0:19:19.639 Baker and Taylor has a platform called Boundless. There's a 0:19:19.760 --> 0:19:25.520 legacy CD RAM and DVD distributor to libraries, Midwest Tape 0:19:25.520 --> 0:19:30.520 out of Holland, Ohio. They created a competitive platform called Hoopla. 0:19:31.040 --> 0:19:37.760 All of them followed us, but collectively overdrives Libby and Canopy. 0:19:38.040 --> 0:19:41.520 In the North American public library, we are the dominant 0:19:41.920 --> 0:19:45.840 leader in many cases, we are the sole supplier to 0:19:45.920 --> 0:19:50.119 many of these biggest systems in the markets, but we 0:19:50.200 --> 0:19:55.960 do have competition, and in international markets we have competitors 0:19:56.000 --> 0:19:58.840 in Germany and here and there, all over the space. 0:19:58.880 --> 0:20:01.400 And if I look at Universe, it's a different group 0:20:01.440 --> 0:20:05.040 of competitors. If I look at students in the classroom 0:20:05.160 --> 0:20:10.840 from kindergarten through high school, we have educational competitors. But 0:20:10.960 --> 0:20:15.360 for the mainstay of you know, public library, consumer ebook 0:20:15.400 --> 0:20:19.240 and audiobook, it would be the traditional book suppliers to 0:20:19.280 --> 0:20:21.440 the market and the few I mentioned. 0:20:21.160 --> 0:20:23.760 Okay, Let's say I'm a library system you talk about 0:20:23.800 --> 0:20:27.600 the County of Los Angeles, and I have an arrangement 0:20:28.080 --> 0:20:33.080 with Overdrive to provide titles. Would they buy titles from 0:20:33.160 --> 0:20:36.760 anybody else or rent whatever it may be, or is 0:20:36.760 --> 0:20:38.480 it an exclusive relationship? 0:20:40.720 --> 0:20:45.480 In most cases with public libraries, there's no contractual exclusivity, 0:20:46.480 --> 0:20:50.320 but as a de facto business practice, they're only buying 0:20:50.359 --> 0:20:54.760 from us. And that is the majority of the In 0:20:54.800 --> 0:20:59.360 the United States, public library data is very available. So 0:20:59.400 --> 0:21:02.959 we know that out of our nation systems of public 0:21:03.000 --> 0:21:07.760 libraries roun you know, thirteen fourteen thousand public library systems 0:21:07.840 --> 0:21:12.800 in the United States. Out of those systems, Overdrive is 0:21:13.760 --> 0:21:18.800 supplying about eighty five percent of all of the digital 0:21:18.880 --> 0:21:25.920 book inventories that public libraries used last year. So collectively, 0:21:26.080 --> 0:21:29.480 all of our competitors might you know, be sharing about 0:21:29.480 --> 0:21:33.200 fifteen percent of the spend, and we capture the majority 0:21:33.200 --> 0:21:36.920 of it. And it's not by contract or exclusivity. It's 0:21:36.960 --> 0:21:40.960 by delivering the best experience for the patron and the listener. 0:21:41.880 --> 0:21:47.680 It's by having services and features within the experience that 0:21:48.119 --> 0:21:52.080 want people to use our libby app or canopy. And 0:21:52.119 --> 0:21:55.600 we're constantly and we do have some competitive advantages that 0:21:55.680 --> 0:22:01.280 frustrate others. So, for example, in the US, the dominant 0:22:01.400 --> 0:22:07.719 way many of the adult fiction community enjoy books and 0:22:07.760 --> 0:22:12.920 reading are on their kindle. Overdrives the only supplier where 0:22:12.960 --> 0:22:16.359 you can borrow a new bestseller New York Times Bestseller 0:22:16.359 --> 0:22:20.359 from the Los Angeles Public Library in Libby and through 0:22:20.440 --> 0:22:24.879 an arrangement an agreement with Amazon, you can borrow it 0:22:24.880 --> 0:22:28.240 from the library and within a moment open up your 0:22:28.359 --> 0:22:32.480 kindle paperwhite and start reading the book you borrowed for 0:22:32.640 --> 0:22:37.080 free in Libby from the library in kindle, and at 0:22:37.080 --> 0:22:39.359 the end of the fourteen or twenty one days on 0:22:39.400 --> 0:22:42.840 your kindle, the book expires and gets checked back into 0:22:42.880 --> 0:22:46.040 the system, all managed by Overdrive. So Overdrive in twenty 0:22:46.080 --> 0:22:52.040 eleven added a read with Kindle option, and because we're 0:22:52.040 --> 0:22:56.760 the only ones, Amazon entered into that arrangement with This 0:22:56.800 --> 0:23:01.040 is another reason why most libraries who are buying popular 0:23:01.119 --> 0:23:05.840 books will look at Overdrive and Libby as the supplier, 0:23:06.440 --> 0:23:08.520 because if you bought the book from one of the 0:23:08.600 --> 0:23:13.159 other suppliers, you would not have the kindle option. So 0:23:13.240 --> 0:23:17.560 that is just one of many competitive reasons why we've 0:23:17.600 --> 0:23:23.719 been successful in winning the business. Because we deliver value. 0:23:23.840 --> 0:23:28.080 We're accountable as well as public libraries and our schools 0:23:28.119 --> 0:23:32.320 and our universities, and our government agencies, military and prisons 0:23:32.359 --> 0:23:37.959 are mostly nonprofits, and Overdrive has developed into a mission 0:23:38.000 --> 0:23:42.399 based company. We know that if we're going to capture federal, state, 0:23:42.480 --> 0:23:47.119 regional taxpayer money and budgets, we have to earn and 0:23:47.160 --> 0:23:52.800 be held accountable for how those taxpayer federal funds are 0:23:52.840 --> 0:23:58.080 being utilized. And we develop, we deliver proven value, and 0:23:58.480 --> 0:24:02.440 we hold ourselves up to higher standards. And for those reasons, 0:24:02.680 --> 0:24:06.520 we have continued to grow our footprint in those markets 0:24:06.560 --> 0:24:08.880 and frustrate our competitors. 0:24:09.440 --> 0:24:14.440 Okay, very occasionally on the libby app in Los Angeles, 0:24:14.560 --> 0:24:18.600 I will borrow a book that is not readable on 0:24:18.640 --> 0:24:23.520 the kindle. Is that because the publisher made a restriction 0:24:23.800 --> 0:24:25.959 or they got that book from a third party? 0:24:27.520 --> 0:24:33.080 Well, typically it is when we ingust and our size 0:24:33.119 --> 0:24:37.720 of our catalog and businesses constantly. 0:24:38.640 --> 0:24:39.320 Expanding. 0:24:40.040 --> 0:24:43.520 But in a typical month we will add about one 0:24:43.640 --> 0:24:50.400 hundred thousand new digital books that are mostly brand new books, 0:24:51.080 --> 0:24:53.720 and with one hundred thousand books coming in in all 0:24:53.840 --> 0:24:59.560 languages for all audiences. I'm talking about Japanese manga Arabic 0:24:59.680 --> 0:25:04.600 audio books read alongs where the children and the babies 0:25:04.640 --> 0:25:08.639 can see the words and follow the engagement and the 0:25:08.760 --> 0:25:15.440 hear the words. We add categories of content that are 0:25:15.480 --> 0:25:22.000 not supported by a Kindle device, So often if you 0:25:22.040 --> 0:25:27.560 are picking up a select title, if it doesn't have 0:25:28.320 --> 0:25:34.479 Kindle compatibility, or there is some other inability for the 0:25:34.640 --> 0:25:41.000 Amazon Catalog to do the enablement. But for most of 0:25:41.080 --> 0:25:46.080 the English language popular trade books. Trade books are the 0:25:46.119 --> 0:25:49.199 popular books you see at Amazon, Barts and Noble. We 0:25:49.280 --> 0:25:53.200 have a very high percent Kindle availability in the US, 0:25:53.760 --> 0:25:56.960 so yes, you will see some books and sometimes it 0:25:57.040 --> 0:26:00.159 might only be a gap. We just added it it's 0:26:00.160 --> 0:26:02.800 a hot new book, and you know we're getting in 0:26:02.880 --> 0:26:08.800 sync with the Amazon catalog because we're not actually sending 0:26:08.840 --> 0:26:15.280 the file to the Kindle. We've engineered with Amazon a 0:26:15.400 --> 0:26:20.399 process that allows Kindle to fulfill the title under the 0:26:20.480 --> 0:26:24.560 terms and conditions of the library permissions we have. So 0:26:24.640 --> 0:26:27.560 you will find some occasional books that you can open. 0:26:28.160 --> 0:26:30.880 And this would be for example, I believe our magazines. 0:26:31.000 --> 0:26:35.800 Libby does fantastic on magazines, but I don't believe Kindle 0:26:35.880 --> 0:26:40.360 is supporting our magazines so that you will see pockets 0:26:40.400 --> 0:26:43.200 of inventory you can borrow in Libby in the US 0:26:43.520 --> 0:26:46.080 where there's not an immediate Kindle availability. 0:26:46.680 --> 0:26:51.720 Okay, point blank, let's just use Los Angeles as an example. 0:26:52.440 --> 0:26:58.200 They have the right to buy from your competitors. Those 0:26:58.240 --> 0:27:03.000 books would be at a disadvantage, do they or most 0:27:03.040 --> 0:27:06.080 people that you work with, they're getting all their content 0:27:06.119 --> 0:27:06.439 from you. 0:27:08.240 --> 0:27:13.360 The vast majority are buying the vast majority of their 0:27:13.520 --> 0:27:18.840 digital collection from Overdrive. For the value we deliver, we 0:27:18.920 --> 0:27:19.919 have to earn the right. 0:27:19.760 --> 0:27:22.439 Place, Okay, but the lines are exceptions. 0:27:22.480 --> 0:27:27.040 There's exceptions. So if I don't have a book, you 0:27:27.200 --> 0:27:29.800 need the book, God bless you. You have to get 0:27:29.800 --> 0:27:33.480 the book. Because content is king. Content is and will 0:27:33.520 --> 0:27:37.359 always remain king. And this is why I'll renew a 0:27:37.400 --> 0:27:40.679 subscription I canceled two years ago because I have a 0:27:40.720 --> 0:27:46.040 book or a series or streaming and that I'll go 0:27:46.119 --> 0:27:50.480 through a bad experience or competitors platform. So we do 0:27:50.680 --> 0:27:55.680 have The reality is in dozens of major metro markets, 0:27:55.800 --> 0:27:59.560 or Overdrive maybe supplying ninety five percent of all the 0:27:59.600 --> 0:28:06.040 digital books, they still could have several other competitors. Usually 0:28:06.280 --> 0:28:10.520 when they have multiple competitors, it's because they're buying it 0:28:10.600 --> 0:28:15.400 for a selection of either titles that we don't offer 0:28:15.920 --> 0:28:21.360 for one or various reasons, or some other legacy reasons. 0:28:22.040 --> 0:28:25.879 So yes, but it's very rare that they're going to 0:28:25.920 --> 0:28:29.440 buy the same title, the new Sarah Jay Moss or 0:28:29.520 --> 0:28:34.160 you know Dan Brown, or you know John Grisham. They 0:28:34.200 --> 0:28:37.439 will occasionally buy the John Grisham in my platform and 0:28:37.480 --> 0:28:42.240 one of my competitors, because they do have an audience 0:28:42.280 --> 0:28:46.680 of users and it could be seniors that learn this system, 0:28:46.760 --> 0:28:50.320 and they don't want to learn a new system. You know, 0:28:50.720 --> 0:28:54.400 it's America, and we do not have we do not 0:28:54.640 --> 0:28:59.280 you know, handcuff our buyers with you know, restrictions, and 0:28:59.360 --> 0:29:01.800 you can't buy for my competitor. I want to win 0:29:01.880 --> 0:29:05.840 the business because I offer the best value, the best service, 0:29:05.880 --> 0:29:06.680 and the best selection. 0:29:07.400 --> 0:29:09.400 But in reality that does exist. 0:29:09.440 --> 0:29:12.520 I could show you the homepage of many California libraries. 0:29:13.000 --> 0:29:16.400 You'll see what's the most prominent app and the experience 0:29:16.480 --> 0:29:20.120 they promote in library online. It would be Libby for books, 0:29:20.640 --> 0:29:24.200 Canopy for video. But in many cases I'll go in 0:29:24.240 --> 0:29:27.440 the library and I'll see our competitors banner stands and 0:29:27.720 --> 0:29:32.800 you know, bookmarks and you know merchandising. We're not exclusive 0:29:33.200 --> 0:29:36.840