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Originally Posted by DuckieTigger
With the amount of money involved it is unlikely for KKR to kill off Overdrive on purpose. Unless, of course, library lending to public libraries is not what they were after. Quite possible they overpaid for that in order to snatch up the education part of Overdrive (namely lending ebooks and audiobooks to schools and colleges). The platform for schools (Sora) is already developed, just needs to catch on and be deployed nationwide in the US. Sounds like a huge potential for growth.
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Ah, back on track.
Yeah, OD didn't sell at a discount but at a premium. That means either it was a competition or KKR bid high enough to avoid an auction.
Either way, they must be seeing a clear path to revenue growth.
The trick is to figure out what it is.
Trade book lending in the US is under attack by the BPHs so it is at some risk of decline there while education isn't. So that is definite growth path. So is increasing Overdrive's library business outside the US.
Personally, I think there is room in the US market for a serious ebook vendor that will actively promote sales themselves, not half-heartedly listing them as a checklist feature for hardware or rely on somebody else to do the heavy lifting. A credible long term challenger for Amazon.
Alternately, they might be looking to take ebook lending directly to consumers using the library per-read pricing on a per-book basis, like with video. A market with BPH sales at $13 could support rentals at $5. Sort of a Vudu for ebooks instead of a Netflix. And, come to think of it, Walmart is trying to sell Vudu...
I doubt they bought Overdrive just to keep on doing the same old same old, much less kill it.