OC-006·Overdue Conversation
The Cost of Ebooks: An Interactive Breakdown
Explore cost per loan with a license price and a loan count. A companion to Follow the Dollar; the example inputs are scenarios, not observed spending.
Enter a price from your invoice and the loans made under that license. The calculation answers one question: cost per loan, excluding platform fees and staff time. Read the reporting and its dated comparisons in Follow the Dollar.
OverDrive circulation rose from 430M (2020) to 820M (2025). Access depends on the lending model: metered licenses expire by time or use; One Copy/One User access does not expire from the collection. Perpetual licensed access is not the same as owning a transferable file. See OverDrive’s lending-model chart.
Three players, one dinner party
The clearest way to explain who does what:
Digital demand grew. Check the access terms.
Digital borrowing has climbed every year since the pandemic. The circulation count does not measure what rights libraries retain.
Digital circulation, 2020–2025
OverDrive checkouts worldwide (ebooks, audiobooks, magazines), in millions.
View the numbers
| Year | Checkouts (millions) | Change |
|---|---|---|
| 2020 | 430 | — |
| 2021 | 506 | +18% |
| 2022 | 555 | +10% |
| 2023 | 662 | +19% |
| 2024 | 739 | +17% |
| 2025 | 820.5 | +10% |
Seattle Public Library
Case file · 2023–24
Britney Spears' The Woman in Me cost about $18 a physical copy but $64.99 per ebook license. Seattle spent roughly $35,000 on digital copies of that one title versus $2,500 in print. In 2023, 62% of its digital-book budget went just to buying extra copies for hold lists. It has since cut max digital holds from 25 to 10.
Source: KUOW (archived; the live link now redirects to audio) · SPL.
Spokane Public Library
Case file · since 2012
Spokane has spent $3.3M to license about 87,000 digital copies since 2012. Because licenses expire, just over 42,000 of those copies were still available as of January 2025. OverDrive content now eats more than a third of its $1.5M annual materials budget.
Source: Spokane Public Library, "The True Cost of eBooks and Audiobooks for Libraries" (January 14, 2025); also reported by the Inlander.
Do the unit math yourself
Correction, September 11, 2026. The former calculator inferred library prices from a fixed retail multiplier. The allocation receipt below also assigned undisclosed margins to particular parties. Both have been removed. The inputs here are illustrative until you enter figures from a particular license.
Cost per loan:
Formula: license price ÷ loans made. The example is $60 ÷ 20 = $3.00 per loan. Zero loans has no finite per-loan result. Use observed circulation for a retrospective audit; a future loan count is a scenario. This excludes platform fees, staff time, and repurchases. A checkout cap is not a count of loans actually made.
Check the dated price comparison
The maintained publisher table is in Follow the Dollar. Its July 30 correction records Simon & Schuster at $59.39 in the March 2026 comparison, not the $25 previously shown here. That is a dated comparison, not a current quote for every title. Use the actual invoice and license terms for your calculation.
Where does a license payment go?
The platform, publisher, and author allocations are not established by the material here. A license price alone cannot supply them. A defensible allocation would need the relevant distribution agreement, publisher receipts, and author royalty terms. No dollar split is displayed.
And the terms are OverDrive's to set. Its current Public Library Access Agreement (archived copy, 7 Sep 2026) lets it reprice the OverDrive Fee at its sole discretion on 30 days’ written notice (§3.2), charge a fee to move content out (§3.3), and add or remove catalog titles at any time (§2.2). What the library signs is a "non-assignable, non-transferable, limited license," not a purchase.
The bargaining gap
Annual revenue, in billions. Libraries are a rounding error to the publishers they negotiate against, one library at a time.
Big Five figure: sum of most-recent reported revenues (Penguin Random House ~$4.9B, HarperCollins ~$1.9B, Hachette Livre ~$3B worldwide, Macmillan and Simon & Schuster ~$1B each; the last two are privately held and don't report standalone). Library e-materials: $723.7M in FY2024, 44.7% of public library collection spending, summed from the IMLS Public Libraries Survey public-use data file (IMLS publishes the percentage, not a dollar total). The comparable FY2019 figures were $449.2M and 31.0%, so e-materials spending grew about 61% while its share of collection budgets rose 14 points.
Price isn't the only lever. There's a sharper move sometimes called digital redlining: publishers don't just overcharge libraries, they can refuse to sell certain titles to libraries at all, or embargo new releases for weeks so a library can't buy the book when readers most want it. Macmillan's 2019 embargo (one copy of a new title for the first eight weeks) is the textbook case. Overcharging caps how much a library can buy; redlining caps what it's allowed to buy in the first place.
What would an actual budget comparison require?
The former budget slider assigned spending shares and predicted service cuts without evidence for those thresholds. It has been withdrawn. Compare adopted budgets, actual spending, funding restrictions, and documented service changes before claiming that one spending line caused another to shrink.
How we got here
Two histories run in parallel: who bought whom, and the fight over the rules.
How one private-equity firm came to sit on both sides of the library's digital shelf.
- 1986
Founding
OverDrive begins as a digitization service, co-founded by Steve Potash and Loree Potash, a law librarian.
- 2003
The library pivot
Launches downloadable media for libraries with Cleveland Public Library, becoming the early market leader.
- 2010–11
The partner becomes a rival
Baker & Taylor, OverDrive's exclusive distribution partner since 2009, strikes an expanded deal with a rival distribution platform, LibreDigital, to feed the Blio e-reader. OverDrive sues in Delaware, alleging its partner took trade secrets to build a rival; the core claims survive dismissal, the outcome never goes public, and B&T launches Axis 360 right after. The two-platform market libraries relied on was born in a lawsuit.
- 2013
Publishers consolidate
Penguin and Random House merge into Penguin Random House, thinning the field libraries buy from.
- 2015
Rakuten buys OverDrive
Japanese retailer Rakuten acquires OverDrive for about $410M.
- 2020
KKR buyout
KKR (announced Dec 2019, closed June 2020) buys OverDrive. The price was never disclosed; Marshall Breeding inferred about $775M from Rakuten’s $410M purchase plus its reported $365.6M gain.
- 2020
RBdigital absorbed
OverDrive takes RBmedia's library business and shuts down the rival RBdigital app.
- 2021
Kanopy
OverDrive acquires the library video-streaming service. Now one firm carries books, audio and video.
- 2023
KKR buys Simon & Schuster
For $1.62B. The same owner now holds the dominant platform and a Big Five publisher, setting terms on both sides.
- 2023–26
Axis 360 winds down
Baker & Taylor ends Axis 360; the remnants rebrand as Boundless, which goes dark in December 2025 when B&T collapses, then is revived in April 2026 by LibraryOne, a months-old startup with no track record. The alternative survives, barely.
The push for fair terms, and the legal wall it keeps hitting. Rust markers flag the turning points; open each item for detail.
- 2011
The 26-checkout cap
HarperCollins introduces metered access. More
The first "your ebook wears out" model: a license expires after 26 loans. At the time it drew outrage; it now looks generous next to pure time limits.
- 2012
The Douglas County experiment
Libraries try to host their own ebooks. More
Douglas County (CO) built a model to buy ebooks directly and host them. Major publishers refused to sell, killing library "ownership" in its cradle.
- 2019
The Macmillan embargo
One copy of new releases for eight weeks. More
Macmillan capped libraries at a single digital copy of new bestsellers for eight weeks, sparking the ALA's #eBooksForAll campaign. Macmillan reversed course in 2020.
- 2021
Maryland's law, New York's veto
First state law passes; a twin bill is vetoed. More
Maryland passed the first state law requiring "reasonable terms" for library licensing. New York passed a similar bill, but Governor Hochul vetoed it.
- 2022
AAP v. Frosh
A federal court strikes Maryland's law down. More
Publishers sued. A judge ruled that federal copyright law preempts state licensing mandates. Maryland's law fell, stalling the state-by-state push.
- 2023
The contract-terms pivot
New bills target unfair terms, not copyright. More
Connecticut and Massachusetts rewrote their bills to regulate contract fairness and price gouging, threading the needle the 2022 ruling left open.
- 2025
Connecticut passes the first reworked law
The contract-terms approach becomes law. More
In May 2025 Connecticut enacted the first library ebook law built on contract fairness rather than copyright, the first of the new wave to survive.
- 2026
DC follows (B26-0490)
The second such law, signed May 28, 2026. More
DC's Library E-book Pricing Fairness Amendment Act passed unanimously. It carries a trigger clause, so it stays dormant until enough other states adopt similar laws, and still faces congressional review. See Two private equity firms own your library.
- 2026
Rhode Island makes three
Passed June 2026, enforcement gated. More
Rhode Island's companion bills passed June 11, 2026 and became law without the governor's signature. Like Connecticut's and DC's, its ban on licenses that charge libraries more than the public pays, demand a per-checkout fee, or cap loans doesn't take effect until at least four other states with a combined 10 million people pass similar laws. New Jersey and Massachusetts have bills moving too.
Questions people ask
Why can't libraries just own ebooks like print?
Buying a Kindle book licenses it to you; a library buys a costlier license to lend it. Publishers treat it as a rental, not a sale, so the file can be made to expire.
Why so much more than retail?
Publishers price against a feared "lost sale," charging libraries roughly three to four times retail and adding expiration to mimic a print book wearing out. It's a business choice, not a cost.
Who is OverDrive?
The company behind the Libby app. ALA’s Digital Public Library Ecosystem 2023 Report puts its share at “perhaps upwards of 90%” for both public and K-12 school libraries. It hosts the files and takes an undisclosed cut; on Friedman’s model the residual available to the whole distribution channel is 30% to 50%. It's owned by the private-equity firm KKR.
What can a library do?
Pull your own invoices, join a consortium, negotiate for perpetual access on backlist, and back contract-fairness legislation. Follow the Dollar lays out the steps.
How to help
Being angry on behalf of librarians isn't the same as changing anything. Here's where that energy actually changes something:
- Get your library to publish its invoices. This pricing survives because it stays invisible. Ask your library to make its OverDrive spend public. One library's numbers is a data point; a hundred is a case for change.
- Back contract-terms legislation. Connecticut, DC, and Rhode Island passed laws that regulate unfair license terms instead of copyright, the version designed to survive the court challenge that killed Maryland's law. Ask your state library association whether a bill is moving where you live, and tell your legislators you want one.
- Push for consortium buying. Shared purchasing cuts per-checkout cost sharply. If your state has a digital lending consortium, join it. If it doesn't, ask your state library why not.
- Follow the people already on this. ReadersFirst tracks publisher pricing and license terms; the ALA's ebook advocacy carries the national fight.
The fuller playbook, with every receipt, is in Follow the Dollar.
Sources
- OverDrive circulation: infoDOCKET (2023), infoDOCKET (2024, 739M)
- Seattle Public Library: KUOW (archived; the live link now redirects to audio), SPL blog
- Spokane Public Library: "The True Cost of eBooks and Audiobooks for Libraries" (January 14, 2025); Inlander
- Pricing and revenue split: Follow the Dollar and its sources (ReadersFirst, Coffman/Computers in Libraries, Jane Friedman, Timberland Regional Library)
- Ownership and legislation: Two private equity firms own your library