Kobo Partners With Major European Booksellers As Global English E-book Sales Surge

On Monday, we took a look at the European e-book market, on foot of the opening of Amazon Spain in September, last week’s new French Kindle Store, and widespread rumors that dedicated Kindle Stores will open in Spain and Italy shortly.

One of the commenters to that piece asked about Kobo, given that I had flagged their European expansion as one to watch during the summer. I responded that Kobo had struggled to find appropriate partners in key markets. Well, that has now changed.

Yesterday also saw the beginning of the Frankfurt Book Fair which is at least partly responsible for the European focus of much of the news, as well as the flurry of announcements this week, including a big one from Amazon which we’ll get to at the end.

Global English E-book Sales Skyrocket

There were two warm-up events for the Frankfurt Book Fair this week. TOC’s event was called Let’s Get Digital (which gave me a chuckle), but the more interesting tidbits (for me) came out of the Publisher’s Launch mini-conference on Monday called eBooks Around The World.

This might come as a surprise to self-publishers seeing meager sales (if any) on Amazon Germany, but English e-book sales are booming in non-English speaking countries. According to a Kobo VP, sales of English language e-books, outside of USA, Canada, UK, and Australia, are up over 300% in 2011.

South Africa is leading this charge, up 432%, and Sweden is next at 359%. Before anyone gets too excited, in both cases the markets are starting from an extremely small base, and there are reasons why Kobo sales may be disproportionate in both markets.

Both countries are in Amazon’s Surcharge Zone, meaning they pay $2 more (plus sales tax) on every e-book purchased. And, in the case of Sweden at least, iPads are extremely popular, dedicated e-readers are virtually non-existent, and given how poorly the iBookstore is rated by readers, it’s not to much of a stretch to imagine that iPad owners who like to read e-books could lean towards the Kobo app (where there is no surcharge).

Whether they can hold on to that market share when Amazon enter the market and if/when Apple get serious about selling books is an open question, especially as I haven’t seen any Kobo readers on sale in Sweden yet, and partnering with local retailers (for them at least) is key.

Kobo Agrees Partnership With Major UK & French Retailers

Kobo has moved into France in a big way by partnering with major French retailer FNAC. It sounds like the deal will be similar to their ill-fated partnership with Borders in that FNAC will provide the storefront, and customers will be passed to Kobo to process the transaction.

FNAC will stock Kobo readers across their 81 stores where they will have staff on hand to demo the devices. As part of the deal, FNAC’s catalogue of 80,000 French language titles will be added to Kobo’s existing 2 million or so e-books, giving them a far greater selection of local-language content than Amazon’s Kindle Store, at least for now.

FNAC are a major player in France – the largest retailer of its kind in the country, selling more books than anyone else – but have underwhelmed with their own e-bookstore, and were said to have lost money on their own e-reader. This deal looks like a win for both companies.

It should also be noted that FNAC have significant international interests: 20 stores in Spain, 17 in Portugal, 4 in Switzerland, and 10 in Brazil. Whether this deal gives Kobo an opportunity to expand into those markets remains to be seen.

One market they are strengthening in is the UK. Kobo had been searching for a key retail partner for some time. Waterstone’s seemed the obvious choice, but that deal fell by the wayside when they decided to develop their own e-reader, slated for next year. Instead, Kobo have agreed a deal with WH Smith.

It’s hard to explain what a WH Smith is like to someone who hasn’t been to the UK, but imagine a 7-Eleven with a post office, that also sells toys, games, movies, and a selection of books in a string of key shopping locations across the country including malls, motorway service stations, airports, train stations, and hospitals, as well as in the prime retail areas of urban centers.

This deal will give Kobo huge visibility in the UK, and it’s similar to the FNAC deal in that WH Smith will maintain the e-storefront and then pass customers to Kobo to complete the transaction, and will also stock their e-readers across its extensive store network.

Some analysts may recall Amazon kindly taking care of that pesky internet business for Borders and will wonder if FNAC and WH Smith have let a fox into the hen-house here. That would be a valid concern for both companies, although it’s hard to see how they could capture a share of the digital book market otherwise.

The other option, of course, would be to develop their own devices (which FNAC tried) and chain customers to their own e-bookstores. But, as Waterstone’s are likely to find out next year, it’s probably too late for that. Speaking of which…

Indie Booksellers Ponder Their Own E-readers

Oren Teicher, the CEO of the American Booksellers Association (ABA), has said they are exploring the possibility of developing their own e-reader. It’s an audacious move, for sure, but I can’t help feeling it’s a little too late.

Any entity seeking to get into this race now is it a severe disadvantage, especially in the US. Amazon and Apple are relatively entrenched in the dedicated e-reader and tablet market respectively. Barnes & Noble have carved out their own piece on the back of a highly visible nationwide chain.

Major device manufacturers, with very deep pockets, such as Sony, Samsung, and RIM are struggling to hold on to any of the market.

Indie booksellers may have Google on their side (to an extent), who provided them with an e-commerce platform to sell their books, which essentially acts as a customizable portal to the Google e-bookstore and its millions of titles.

However, Google don’t sell many books and it’s not hard to see why. The customer side is a mess. Reports from self-publishers who do list there (I don’t) indicate that the other side is just as bad. In fact, most don’t bother listing because of Google’s policy of arbitrarily discounting books, causing Amazon to price match, which in turn leads to self-publishers losing the all-important 70% royalty rate.

From Teicher’s comments, it now appears there are issues with the e-commerce platform too, with new releases being slow to appear  – which is not good, to say the least.

There is no doubt that Google have the resources (both financial and technical) to make a play for a significant slice of the digital book market. However, it doesn’t appear to be a big priority for them right now, and I imagine their offering will continue to underwhelm until that changes.

But rather than fixing their own store, they are pressing ahead with international expansion. The UK store opened last month, and Canadian and Australian stores are expected before the end of the year, with Europe on the road-map for 2012.

As for the ABA, I would respectfully suggest that they focus their efforts on curating that e-bookstore catalogue, rather than wasting resources on developing an e-reader.

Their natural demographic are the minority of readers who want a limited, hand-picked selection of books, rather than the majority who prefer the near-infinite selection of Amazon. If they try and play Amazon at their own game, they will fail.

On this note, Bloomsbury executive director Richard Charkin is urging retailers to develop their own devices to compete with Amazon. Aside from the fact that taking advice on how to compete with Amazon from a large publisher is the last thing anyone should be doing, I’m sure the irony of this won’t be lost on most, given that publishers have singularly failed to develop their own retail side to check Amazon’s growth, let alone done anything as radical as even considering developing their own device.

A quick look at Bloomsbury’s tepid, clunky online bookstore will show print books at ridiculously high prices – often twice that of Amazon UK – and e-books nowhere to be seen. They do have listings for some backlist e-books, but they don’t sell them in their own store. Instead, they link to – you guessed it – Amazon.

That’s how you compete!

Amazon Launches New Science Fiction, Fantasy & Horror Imprint: 47North

While their competitors are flailing around, Amazon are busy vertically integrating in a very methodical way. Their publishing strategy in 2011 has been very simple: follow the readers.

They launched their thriller and mystery imprint, Thomas & Mercer, with the marquee signings of JA Konrath, Barry Eisler, and the deceased Ed McBain’s backlist, then quickly scooped up a host of successful indie writers, beefing up their roster considerably.

Aside from that genre and romance (which has its own dedicated imprint, Montlake), the next wave of readers to make the switch to digital were science fiction, fantasy, and horror fans. And now they have their own imprint: 47 North.

Again, they have amassed an impressive collection of writers to kick things off including Neal Stephenson and Greg Bear, Chris Roberson, and BV Larson (the full, extensive list is on Amazon’s press release).

Some self-publishers have noted that this group of writers is markedly different from the Thomas & Mercer list (most come from trade publishing), that there are notable indie absentees who have been dominating the genre bestseller lists for some time, and indeed that certain popular sub-genres like high or epic fantasy aren’t represented at all.

However, in response to a thread on Kindle Boards on that topic, one of the 47North authors BV Larson (who originally self-published) commented that nothing should be read into this initial line-up, and that he fully expects to see more indies signed up in due course, and for the various sub-genres to be fully represented.

It also should be noted that he said that Amazon “appear to move about double the pace of any publisher I’ve run into”, that they gave him a “better, faster contract” than he would have gotten from the competition, and that they “might be around longer”. Indeed.

Finally, I should point out that Lee Goldberg’s and William Rabkin’s Dead Man series will come under the ambit of this imprint, and not Thomas & Mercer as I suggested last week.

The first books published by 47North will be the re-release (in advance of Halloween) of the first five books in this series, all of which were originally self-published. The series will then progress with a new book from a new author each month, commencing in November, continuing, according to Lee Goldberg, “into infinity!”

David Gaughran

Born in Ireland, he now lives in a little fishing village in Portugal, although this hasn’t increased the time spent outside. He writes novels under another name, has helped thousands of authors build a readership with his books, blogs, workshops, and courses, and has created marketing campaigns for some of the biggest self-publishers on the planet. Friend to all dogs.