OverDrive sold to private equity firm KKR

[Fbone]

I'm surprised Amazon didn't buy Overdrive. Surely, they must have known it was for sale.

[rcentros]

Originally Posted by pwalker8

Private equity firms have been demonized for political purposes, ...

Not just for political purposes. Many of them have a history of buying established companies, using the company's established credit to take out incredibly high loans, then (when the company can't maintain the loan and the costs of staying in the business) they break them up and sell the pieces, while sucking the marrow out of their bones. Vultures. And guess happens to the employees? KKR, along with Bain Capital and another vulture company (I don't have the name in front of me) where responsible for Toys-R-US.

That said, it looks like KKR in recent years is more interested in actually running companies instead of chewing them up and spitting out the pieces. They've recently invested in or bought Epic Games, Corel, RBDigital and now Overdrive (and other software and media companies). But you've got to believe that either RBDigital or Overdrive will be folded into one or the other. End result is that there will be less choice or, at least, less competition.

[JSWolf]

Originally Posted by John F

Aren't there other alternatives, like FReading?

FReading is OK, but not nearly as good as some of the libraries I have access to that use Overdrive. I would really hate it if Overdrive went away.

[fjtorres]

Originally Posted by j.p.s

My reading of ZodWallop's post is exactly your first sentence, which renders the "only" in your second sentence false.

I wasn't countering him.
Just pointing out that Overdrive's customers aren't readers but rather libraries.

And that all the handwringing above is premature.
After all, libraries would not be happy if Overdrive makes their mission of serving readers harder and unhappy customers are bad for business.

[Atunah]

I have access to 3 libraries and they all only have Overdrive for ebooks. Since I can only read ebooks on my kindles (e-ink), even if my libraries had other services, those would not be an alternative for me. I could not use them anyway.

I use the library quite heavy, in addition to buying and KU so I hope they don't change things.

[ZodWallop]

Originally Posted by fjtorres

I wasn't countering him.
Just pointing out that Overdrive's customers aren't readers but rather libraries.

Sure, but it would still be a good idea to imbed OverDrive into any reader that will have it. Not to get those big Nook dollars, but to make OD the de facto way to borrow an ebook.

Libraries respond to their borrowers. People who read on ereaders tend to be some of the heaviest readers. So it seems like it would make sense to integrate OD into any and all Kindle/Kobo/Nook/Tolino/etc devices they are able to.

I say that as someone who never uses OverDrive, but it seems like an obvious thing to me.

[stumped]

Originally Posted by ZodWallop

.

Libraries respond to their borrowers....

mine didn't

it ditched overdrive for cheaper, inferior services from RBdigital and Borrow box, splitting ebooks and audiobooks across 2 suppliers/ two apps. i cant see how any borrower would have voted for that mess, not that we were even cvonsulted...

[BobC]

It appears that quite a few UK libraries have migrated to Bolinda Digital's "BorrowBox". Mine did and the selection of books is much poorer than Overdrive for the type of reading I do.

Probably o.k for enthusiasts of Chick Lit.

I've no doubt that the price the Libraries pay is much more budget-friendly.

BorrowBox seem to suggest they are the No.1 Online library for the Commonwealth. As an Australian Company that may be so but isn't much of a recommendation these days.

BobC

[John F]

Originally Posted by JSWolf

FReading is OK, but not nearly as good as some of the libraries I have access to that use Overdrive. I would really hate it if Overdrive went away.

I agree. FReading seems to have limited selection when it comes to the big 5. But if KKR did something detrimental to Overdrive, maybe other services would step up to fill the void.

Capitalism hates a vacuum.

[pwalker8]

Originally Posted by rcentros

Not just for political purposes. Many of them have a history of buying established companies, using the company's established credit to take out incredibly high loans, then (when the company can't maintain the loan and the costs of staying in the business) they break them up and sell the pieces, while sucking the marrow out of their bones. Vultures. And guess happens to the employees? KKR, along with Bain Capital and another vulture company (I don't have the name in front of me) where responsible for Toys-R-US.

That said, it looks like KKR in recent years is more interested in actually running companies instead of chewing them up and spitting out the pieces. They've recently invested in or bought Epic Games, Corel, RBDigital and now Overdrive (and other software and media companies). But you've got to believe that either RBDigital or Overdrive will be folded into one or the other. End result is that there will be less choice or, at least, less competition.

And some readers murder people. It doesn't follow that all readers are bad. Sigh.

Companies are bought and sold for many, many reasons. Sometimes the only thing one can do with a failing company is close it and sell off the assets. If Overdrive is successful, odds are that is not going to be it's fate.

[stumped]

IIRC, overdrive did not begin life as part of Ratuken - they bought it a few years back ?

if that's the case I wonder why they sold it e.g. to take profits, to cut losses....
the 3rd option for selling - that's its no longer a good fit for the rest of their business would seem strange unless they plan to offload Kobo soon?
and did they invent Kobo, or buy it once it was worth buying ?

[rcentros]

Originally Posted by stumped

IIRC, overdrive did not begin life as part of Ratuken - they bought it a few years back ?

if that's the case I wonder why they sold it e.g. to take profits, to cut losses....
the 3rd option for selling - that's its no longer a good fit for the rest of their business would seem strange unless they plan to offload Kobo soon?
and did they invent Kobo, or buy it once it was worth buying ?

Rakuten bought both Kobo and Overdrive, as both were independent companies at one time. Supposedly Rakuten made a net profit of $365 million dollars selling Overdrive. I've got a feeling that KKR went to Rakuten and made an offer, rather than Rakuten putting Overdrive on the market. KKR seems to want to get into the Media business and (from their point of view) it makes sense to consolidate (and enhance profit margins).

[rcentros]

Originally Posted by pwalker8

And some readers murder people. It doesn't follow that all readers are bad. Sigh.

Companies are bought and sold for many, many reasons. Sometimes the only thing one can do with a failing company is close it and sell off the assets. If Overdrive is successful, odds are that is not going to be it's fate.

Leveraged buyouts are often what make companies fail. And often it's done on purpose and it's a slimy practice of putting profits before people. It's so obnoxious that it's outlawed in other countries, like England. The U.S., on the other hand, seems to embrace these vultures.

KKR was involved in some slimy dealing. Not quite as slimy as some of the others, however, like Elliot & Associates. Whether KKR is reformed now, or not, I don't know but any time an equity firm gets their talons into one of your favorite companies it's time to start worrying about that company's future.

[DuckieTigger]

If you haven't seen already, in https://www.japantimes.co.jp/news/20...nit-overdrive/

Rakuten basically admits that OD is not profitable enough. At least that is my interpretation from this:

Rakuten said it decided on the sale as part of its efforts to optimize the allocation of the Rakuten group’s management resources.

[stumped]

Originally Posted by DuckieTigger

If you haven't seen already, in https://www.japantimes.co.jp/news/20...nit-overdrive/

Rakuten basically admits that OD is not profitable enough. At least that is my interpretation from this:

Hmm, I guess the big question them is, do they think Kobo is profitable enough to keep.

I would have thought that Kobo+Overdrive was worth more than the sum of its parts, if they'd continued to develop the book borrowing link e.g. add it to all Kobos, keep it as an exclusive....