Japanese local governments are now facing pressures to deliver public services more efficiently. Public library is one of the example under this pressure. Some public libraries are now managed by private companies or NGO (NPO)s through the use of the Designated Manager System (DMS). Among these DMS libraries, TSUTAYA libraries in which, Cultural Convenience Club Company (CCC) made contracts with local governments, became famous first as a radical reform case then as scandals. This paper tries to explain what were the reasons why some local governments introduced DMS to libraries and why TSUTAYA libraries were blamed for changing libraries into noisy places and using tax payers’ money wrongly. It will also discuss how difference between citizens’ understanding about public service affect to management and what is the answer to satisfy different people who have different demands to public service.