Newsmaker: Steve Potash

A Q&A with OverDrive’s CEO regarding the company’s recent acquisition by online retail giant Rakuten

March 27, 2015

Steve Potash, founder and CEO of OverDrive.
Steve Potash, founder and CEO of OverDrive.

Steve Potash founded OverDrive in 1986 and built it into the predominant provider of ebooks, audiobooks, and other digital media for American libraries and schools. It is estimated that OverDrive has about 90% of the US public library market. So when the company announced March 19 that it would be purchased by Rakuten—a large international online retailer and e-content provider based in Japan—there were plenty of questions about what it will mean to libraries and to library users. Rakuten also owns Kobo, the Canadian ebook and e-reader company. In a telephone interview, Potash talked about the planned acquisition, the potential benefits for US libraries, his future with OverDrive, and the advantages of joining a company consistently ranked by Forbes as one of the top 20 most innovative worldwide.

Presumably the acquisition of OverDrive by Rakuten will strengthen OverDrive. How will that lead to a better experience for libraries as OverDrive customers and for their users?

Steve Potash: The first and the most obvious win for our library and school partners is going to be more content. Because Kobo has been operating globally, we expect to make more content available faster for library lending and for schools.

On service, we are joining one of the most innovative internet service companies on the planet. They are always focused on improving their technologies under one primary principle, which is empowering their customers. And they have a culture of empowering their employees, so the collection of technologies is going to give us significantly faster access to innovate the service component for our library partners.

This is a great partnership that is going to lend more content, faster access to market‑leading technologies, and better ability for empowering our libraries to analyze and evaluate how their OverDrive service is delivering for their community.

What commitment has the new company made to keeping you on as CEO of OverDrive?

I can share with you that I have entered into a long‑term employment agreement to continue my role as I have been in the past. That includes not only myself but pretty much all of my executive management team.

Innovation and flexibility to respond quickly to library needs have been a hallmark of OverDrive. Within the new company, will these remain?

One of the five principles of success at Rakuten is built around speed. When you are in an internet and digital content business, speed is an important asset. We expect to have new resources to help us innovate even faster and provide more options to consider how we may bring value to our library partners and their readers.

Rakuten is an international retailer and, as a result, one of Amazon’s competitors. What does this mean for OverDrive’s continued access to the Amazon Kindle format for libraries?

As we’ve published in our FAQs, we provide the absolute broadest options for ebook and device compatibility on all major devices and on all major reading apps. It’s business as usual on all fronts.

Given Rakuten’s presence as an online retailer, should we expect a new emphasis on selling content through libraries, such as the “buy it now” requirement that Simon & Schuster tried to impose that was subsequently rolled back?

OverDrive, working with many of our public library directors, has offered buy-it-now service, alongside ebooks and digital audio books, as early as four or five years ago. Many of these programs are going to be opportunities for libraries to opt in. We have five years of experience offering this option. Even before this acquisition, OverDrive was using Kobo as one of the online retailers that patrons could choose to order from using the buy-it-now feature. So we don’t expect any changes in the ability for libraries, if they’re interested, to add a buy-it-now option to serve their community. I don’t think we’ll see any changes in this.

As you know, reader privacy is a key tenet for librarians. Yet in order to get access, for instance, to Kindle ebooks through Amazon, patrons have to share some information with Amazon. How will patron information be protected from Rakuten?

OverDrive has always respected and adopted the policies and practices that libraries and schools have required. We have enabled reader choices. And in every case, including the one you mentioned, it’s an opt‑in by the reader. If the reader wants to use a particular device or app, our job has been to ensure that they can do so if they elect to anonymously. We expect that those two tenets will allow us to continue, not to change, our track record of respecting patron and reader privacy.

For the past several years, ALA has taken a strong and successful advocacy stance with publishers to persuade them to make their e-content available to libraries. What can ALA and other large library organizations do to further improve the public’s access to ebooks and other digital content in the United States?

First of all, OverDrive is very grateful for the great advocacy work of ALA and the digital content committees. It’s been great to have this consistent education of publishers that having their materials discoverable, accessible through public libraries is a very strong way to build success for their brands, their authors, and their product lines.

The next big space ALA should consider regarding advocacy with publishers is around education. The educational publishers. While you have made great progress with the trade houses, we’re in the very early days of getting appreciation for library lending of digital books from the textbook publishers and those that are providing the curriculum in the classroom. The other thing I would say is supporting open standards. We are one of the first to fully support the IDPF EPUB 3 (International Digital Publishing Forum). This makes sure libraries have long-term compatibility with all the new mobile devices and screens that are in our future and in our readers’ future.