Penguin Plays Security Card With E-Book Lending Pullout

Penguin Group, one of the largest book publishers in the U.S., has delayed the availability of new e-books in local libraries and will no longer allow OverDrive to loan out digital copies of its titles to Kindles. [*Editor’s note – Nov. 23, 2011]

The publishing group cited security concerns as the reason for the change. Penguin finds it necessary to delay the availability of new titles until the concerns are resolved with business partners. The company has not publicly identified what the security concerns entail.

Amazon recently formed a partnership with OverDrive to distribute e-books to local libraries. Penguin has been a part of the deal but has now asked OverDrive to revoke Kindle access to all of its books.

For non-Kindle users, the change will not affect e-books already available on library catalogues. Amazon recently started allowing its Prime subscribers to borrow one book per month from a selection of titles. Penguin and other publishers declined to participate but reportedly discovered that some of their books were still being included in the selection. [*Editor’s note – Nov. 23, 2011]

Many publishers have been wary about the lending of e-books, fearing the practice could subtract from sales of e-books and contribute to piracy.

Penguin Aims to Solve Security Issues

Penguin plans to return to digital lending once its concerns about security have been addressed. “Penguin has been a longtime supporter of libraries with both physical and digital editions of our books,” Erica Glass, a spokesperson for Penguin Group, told the E-Commerce Times.

Penguin, she said, respects libraries and the concept of book lending. “We have always placed a high value on the role that libraries can play in connecting our authors with our readers,” said Glass. New concerns, however, about the security of digital editions prompted the company to delay the availability of new titles in the digital format.

“We remain committed to working closely with our business partners and the library community to forge a distribution model that is secure and viable,” said Glass. “In the meantime, we want to assure you that physical editions of our new titles will continue to be available in libraries everywhere.”

An Unlimited Library Could Hurt Book Sales

The whole issue with lending e-books may come down to money.

“I think this is a revenue issue,” Rob Enderle, principal analyst at the Enderle Group, told the E-Commerce Times. “Book sellers have never really liked the idea of libraries because for every book that is lent out, they lose a potential customer,” said Enderle. “At least the library purchased the books that were lent out, and the library wasn’t capable of lending out the same book to more than one person at a time. That limited the risk.”

A digital version of a book is an entirely different story. “E-books could be lent out to thousands at once, and the software is not under the control of the publisher,” said Enderle. “If sales don’t hit expectations, it is easy to assume the reason is that too many people are borrowing and not buying the books.”

Are Security Concerns Valid?

The security concern, Enderle said, goes to what has been a traditional paranoia surrounding digital products. Yet he acknowledges that we don’t really know what triggered Penguin’s response.

“Given there are security problems found in most systems on a regular basis, Penguin’s concerns could have a basis in facts that have not been disclosed,” said Enderle.

The perception is that digital products lend themselves to copying and sharing. “People think electronic means ‘easy to copy,’ and therefore, people will copy books,” Steven Savage, technology project manager and Geek 2.0 blogger, told the E-Commerce Times. “This misses the point that lending acts as publicity.”

Just because e-book can be copied and shared doesn’t mean it will become a regular practice like it did in the music business. “Can books be copied or cracked? Yes. Will people care to copy books? Probably not unless it’s a big hit,” said Savage. “For now, this doesn’t mean a lot to e-lending.”

Is Security the Real Problem?

In fact, security may not be the real reason for Penguin’s pull-out at all, suggested Enderle. Security may simply be the excuse, he said, noting that Penguin’s problem with lending e-books could be connected to the Kindle Lending Library.

“The Author’s Guild was really upset that Amazon was able to lend allegedly without permission,” said Enderle. [*Editor’s note – Nov. 23, 2011] “Amazon appeared to be using OverDrive to accomplish that task.”

The difference is that Amazon is facilitating the lending, not a library. “It is one thing to enable libraries to lend, but it’s another thing for a service to be offered by a bookstore,” said Enderle. “So this may be less about security and more about the OverDrive contract.”