Could a Re-organization be in the Works at OverDrive?

I heard the most interesting rumor at Books in Browsers last week, and while I don't know that anything is going on behind the scenes I thought it was too juicy to share.OverDrive, the dominant player in ebook checkout services, might be about to management team with a new direction.Here's what I know. One of OverDrive's investors is asking questions about OverDrive's competitors and what they're doing.

First, a little background. Last October OverDrive picked up a major new investment from a venture capitalist currently backing the company, Insight Venture Partners. I don't know the terms of the deal, but it's safe to assume that the investors got a chunk of the company in exchange for their money. It's also safe to assume that they may also have greater influence over who's running the company. (Not how it's run, but I'm told it's not unusual for a venture capitalist to be able to force a reshuffling of the management.)

What I learned this past week was that an analyst for that venture capitalist is doing research into the library ebook market and OverDrive's competitors I was told that the analyst's questions didn't focus on any one start-up in this niche, and the questions covered most of the niche in what felt like an attempt to get a feel for the overall market.

I can understand why the venture capitalist would want to know what-all is going on in this niche, but why the sudden interest? The chatter going around BiB suggested (and this is a good point) that the VC might be thinking about a change in management at OverDrive and a pivot to offer new services. Admittedly, all I have is the one analyst asking questions, but the thought that comes to my mind is why not just ask those questions of OverDrive? The best reason I can think of is that someone with someone is thinking about making some serious changes there.

If you look at the time frame, this idea makes some sense.  It's been a year since the investment, which means OverDrive have had 6 to 9 months to come up with and implement a plan to raise revenues. And OverDrive have been pushing out new services over the past 9 months or so, which fits with this rumor. Between the new Kindle Library ebooks, OverDrive Win, and the new ebook subscription services offered by OverDrive, they've clearly been expanding their services. But is it enough?

In any case, all we know is that an analyst is asking questions. This might turn out to be nothing. But it also might turn out to be a big deal. We could see OverDrive get a whole new management team, or it could announce new services, or it might even be bought out by another company.

I think Amazon would want to buy OverDrive. That would give them a dominant position in library ebooks (as well as access to all your records). And then there's 3M, who are just launching their Cloud Library. They'd probably love to get their hands on OverDrive, their only major competitor in this niche.

No matter what happens, this could have a major influence on how consumers get their library ebooks.

Let's see what happens.

P.S. I wrote this post in the hopes of shaking the trees and seeing what falls out. If anyone has any details that you would like to anonymously share, please reach out to me. I'd like to know what's really going on.

About Nate Hoffelder (11585 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

2 Comments on Could a Re-organization be in the Works at OverDrive?

  1. We also know that Overdrive has been increasing the administrative annual fees charged to libraries by as much as 400%. Evidently, Overdrive needs more money quickly.

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