Home » Ebook Subscriptions, Ebooks, Non-US » Rakuten Kobo and bol.com launch ‘Kobo Plus’

Rakuten Kobo and bol.com launch ‘Kobo Plus’

28 February 2017

From the Kobo Newsroom:

Booklovers from The Netherlands and Belgium will never run out of things to read thanks to Kobo Plus. The new subscription service jointly created by Rakuten Kobo, leader in the digital eReading space, and premier online Dutch and Belgian retailer bol.com, offers readers the largest all-you-can-read selection of digital books in The Netherlands and Belgium, with titles ranging from new releases and bestsellers to classics and old favourites, including both Dutch and international titles. Customers can try the eBook subscription service free of charge for 30 days.

Digital reading enables people to carry their entire libraries with them wherever they go— gone are the days of having to choose which book to take on vacation or on the daily commute. In 2014, Kobo and bol.com partnered together, making it possible to access thousands of eBooks anywhere, on any device. The Kobo Plus subscription service is the next step in making the largest selection of books even more accessible, offering more than 40,000 titles—16,000 in the Dutch language—with considerable growth expected in the coming months.

. . . .

Kobo Plus was developed in close collaboration with leading Dutch publishers. The subscription service operates on a fair-share model, with payouts funded by subscription revenues, which enables a self-sustaining service built for the long-term—encouraging publishers to offer a wide selection of books from all genres. Kobo Plus was designed with the booklover in mind, and provides book recommendations tailored to individual readers’ interests.

Patrick Swart, CEO of Dutch publisher WPG Uitgevers, says: “As with any new business model, it will take some time for those involved to become accustomed with this new way of delivering books to readers. For publishers, a new business model entails a different approach to marketing books and for our authors it means they get compensated in a different way.

Link to the rest at Kobo Newsroom and thanks to Melissa for the tip.

PG is more than a little suspicious about authors being “compensated in a different way.”

Ebook Subscriptions, Ebooks, Non-US

29 Comments to “Rakuten Kobo and bol.com launch ‘Kobo Plus’”

  1. The digital reader blog had the news last week.

    And the Terms of Service on the publisher side:
    http://the-digital-reader.com/2017/02/22/kobo-plus-not-require-exclusivity-pays-shares-limited-funding-pool/

    Further details since them indicate they’re doing a KU v1.0 style funding pool. The different way Seems to work like this:

    They tally up the total subscription income and take 40% off the top. The rest is split among publishers in direct proportion to the number of checkouts times the list price of the books checked out. (A $9.99 ebook will earn ttiple the payout of a $3.33 ebook and ten times the payout of a $0.99 ebook.)

    Each checkout earns a “full” payout once the reader reaches 20%.

    The service uses Overdrive library backend services so if the business model proves viable other Overdrive or Kobo clients can start similar services.

    • So if one offers a three page book with the price of $1,000.00 …

    • It will be interesting to see how that works. Readers will see no difference between a 9.99 title and a 2.99 title. Publishers will. There will be no direct connection between publishers pricing decisions and readers purchasing decisions.

      Readers might preferentially use the subscription service to read higher priced books if they are aware of the high purchase price. The publishers will be compensated proportionally to the high price. I can’t immediately predict the dynamics, but it will be interesting.

      • Might squeeze cheap books out of Kobo.

        • It might squeeze cheap books out of Kobo Plus, but I don’t see out of Kobo.

          Low priced books might see less return out of Kobo Plus as the invisibility of their price advantage might lead to people reading low price versus high priced books at a very different ratio than they would purchase those same books. If low priced books leave Kobo Plus, then high priced books might see less return than they expect as the pot is being split mainly among similarly high priced books. Subscriptions might cannibalize high priced sales if readers cotton on and buy cheap and subscribe high.

          I don’t know what will happen, but I can’t imagine disconnecting reader and publisher price perceptions will result in a stable situation.

          • One or the other.
            For KP to be most profitable to an Indie the books should be priced high, which would limit discrete sales. Price them low enough to sell and the KP payouts will likely be neglible.

            It’s good to see Kobo try to compete but the list price factor is a really bad idea just inviting scammers to jump in.

    • felix is this something one has to be in at kobo, ordid they still keep our books under the agreement we came in on?

      Is thisanother way for authors to lose money. Again?

      • It is opt-in.

        • Felix J. Torres

          And only in one of the smaller markets.
          It’s more of a pilot for Kobo and a tech demostrator for Overdrive.

          Odds are terms will change before it comes to the major markets. If ever.

          • thanks Felix,appreciate it. Is OVerdrive involved with Kobo? Sorry, I missed that . We know overdrive as the walmart of authors in audio, they take the meat leave us a bone.

            Thanks Nate, also, appreciate it.

            • Felix J. Torres

              Tangentially.
              Overdrive is based in suburban Cleveland and Kobo in Canada but both are currently owned by Japan’s Rakuten. Kobo is focused on consumer ebook sales via partnerships with B&M bookstores in various countries while Overdrive provides backend ebook services to libraries and helps companies set up generic epub bookstores. They’re both independent but somewhat complementary.
              Overdrive goes way back to the PDA era of ebooks and used to work closely with Microsoft and Mobipocket. True pioneers and they have “the arrows in the back” to prove it. 🙂

        • Thanks Nate, also, appreciate it.

  2. I already opted my titles in. should be interesting.

  3. Compensation provided a different way. Authors don’t have to opt in if they don’t want to. It’s just a different way to capture readers, most likely in response to Amazon and all their opt-in programs like Select and Prime and whatever. It’s also experimental, but lots of authors do nothing but Amazon and Select. The successful ones have nothing but praise, although it never worked for me. Considering that Kobo specializes in ebooks, they really need to compete effectively with Amazon in this one area. Honestly, Kobo should set up a program to link ebooks with print books, such as Amazon and B & N do. It’s just one more chance to make a sale.

  4. You can when you upload a ebook to them put the ISBN for the print book which I thought would create a link to the print somehow. When I did it I thought I would see the paper back offered at Chapters but I don’t.
    Also, they are in beta for a POD service. I took part but I’m not a fan so far. Have to see what the final service looks like.

  5. They don’t intend to pay the publisher/author for books read during the trial period.

    From 3.3
    No amounts will be payable to Publisher in respect of Subscription eBooks Read by a User during a trial period, and all data pertaining to such activity shall be omitted from the fee calculations described below.

    I addressed this with Kobo, and the answer was quite handwavy.

    However, I’m not thrilled with potentially giving away my entire catalog.

  6. Another important detail: Draft2Digital will soon be distributing to Kobo plus, but not Smashwords (this is one of my other scoops from last week).

  7. One interesting difference from KU is that Kobo pays out from a pool consisting of all the subscription revenue less its 40% share. Amazon simply allocates a pool of funds to be divided. How Amazon determines the amoun of the pool is undisclosed, but it is probably accurate to hazard a guess that it is less than the total subscriptions received.

    It is also interesting to note that Amazon addressed the shortcomings (and consequent rorting) of this full payout on percentage read model by abandoning it. It did no persevere with trying to fix the model. Nor does Kobo’s model seem to show any acknowledgement of these problems, let alone a method of addressing them. And the model does, as noted in previous posts, provide an incentive to inflate the cover price.

    And finally, my view is that when a subscription system has the support of major publishers authors really need to beware.

    I applaud Kobo for its efforts. Hopefully they will have some strategy in mind for dealing with the scammers. The company itself cannot lose, as, unlike Oyster, Scribd and the like it has followed Amazon in adopting a model that limits its costs. Now we must wait and see. Personally as a reader I am staying with KU at the moment, though I will certainly be watching how this experiment works out.

    • Felix J. Torres

      Agreed on all counts.
      Although I’n not sure the tradpubs will flock to KP anyway.
      Their payout model might favor BPH pricing but there might not be enough money in the pool to satisfy their needs.

      Simple back of envelope calculation:

      Assume the subscriber base averages 4 books a month and half are Indies priced at $3 and half BPH at $12. That means they “consumed” $30 worth of books for $10 worth of subscription. Yay! A bargain for readers!

      Their share of the pool is $6 so the payout is 6/30 or 20% of cover. Because of the price factor, the Indie gets $0.60 per checkout and the BPH gets $2.40. (The author ends up getting maybe $0.40 so the BPH nets $2 per checkout.)

      That is, of course, based on 4 checkouts per subscriber where reading 20% triggers a payout. Real world readers interested in a subscription will read at least 4 full books a month, not 4 20% snippets so unless every book satisfies every subscriber at the first try, you’re looking at an average checkout rate that is higher than 4 and a payout lower than 20%. Cheaper books will raise the payout rate, higher priced books will lower it.

      So you have a price factor that encourages high prices and a checkout trigger that encourages short works, which means more checkouts, which means a lower payout percentage. You can easily end up with reader checkout averages of 8 checkouts (10% payout) or higher (single digit payouts). And that is at a 50-50 split of high vs low priced checkouts.

      The biggest criticism of KU from readers is the limited selection of recognizable tradpub titles so if KP succeeds in attracting tradpubs that would be their calling card. Faced with a choice of recognizable tradpub titles and unknown Indies, where are readers going to go? Into the unknown? Me, I doubt it. KU works (when it does) because it boosts visibility of Indies. KP doesn’t look like it will boost visibility as much as it will mine it.

      I’m thinking that if Kobo has enough tradpub titles their early payouts are going to be single digit percentages that will squeeze Indies out and keep the higher profile tradpub titles away. (Note I’m not even factoring in “voracious” romance readers.) Their mix may well end up looking like Scribd.

      I hope I’m wrong here. I want competition but I want successful competition, not more roadkill.

      And, BTW, Kobo may be insulating themselves from big losses by taking their cut upfront but they may not enjoy the inevitable sales canibalization. Their best hope is to draw enough new customers from other ebookstores and new-to-digital to make up for cannibalization. But they’re launching in a small market with modest digital penetration.

      This is not looking like a slamdunk success.

      • You missed out back of enveloping Kobo’s revenue, though you did mention the possible impact.

        With your hypothetical 4 checkout a month reader — 2 indies at $3, 2 BPH at $12 — Kobo nets $4 from subscription fees. (I know the currency unit isn’t $, but it isn’t important for an internal comparison.) If those were direct sales instead, Kobo would net $0.90 on each indie (30% commission on $3) and $6 on each BPH (50% wholesale discount). A total of $13.80. This isn’t a problem if the subscription service grows sales, but is a problem if the subscription model displaces sales. Amazon faces the same problem. So far their direct sales of ebooks has increased steadily even as KU operates.

        • Yeah.
          But I did say they hope to make up for it by drawing in new customers. That might work in the US/UK, big markets where Kobo is weak, but in small markets?

          Dunno.
          KU works because it is mostly indie and it serves to highlight Indies. It targets avid readers willing to sample unknowns instead of the oldschoolers looking for familiar names and that sems to compensate for the reduced payouts. Plus, it’s am alternative to permafree.

          But that’s not how KP looks right now. From what I hear, they seem to feature most of their dutch ebooks rather than a limited subset. That makes cannibalization more likely.

          Hey, things were getting boring. Now there’s something else to keep an eye on.

Sorry, the comment form is closed at this time.