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Canada’s Rakuten Kobo Arrives in Amazonian America at Walmart: Ebooks and Audiobooks

22 August 2018

From Publishing Perspectives:

You’ll remember Publishing Perspectives’ January article on Rakuten Kobo’s plan to re-enter the American market–generally thought to be Amazonian territory–through a new partnership with Walmart.

On Tuesday (August 21), Walmart eCommerce’s general manager for entertainment, Mario Pacini, has gone onto the company’s blog pages to announce that the advent of Walmart Ebooks by Rakuten Kobo is at hand. The program has its landing page in place, with a “US$10 off your first ebook or audiobook” offer and–perhaps of greatest eventual significance in these audio boom-times–a 30-day trial on a $9.99-per-month audiobook subscription.

Once the customer clicks into the Walmart page for a category of interest–ebooks or audiobooks–she or he is taken to a Rakuten Kobo page. Choose hardcover or paperbacks, and you remain on Walmart’s pages. Michael Cader at Publishers Lunch is reporting that it appears a consumer will need a Walmart account, rather than using a Kobo account.

. . . .

To stay with audiobooks for a moment, the Kobo-Walmart audiobook offer undercuts by $5 the Amazon Audible subscription. Both subscriptions provide one audiobook monthly, Audible for $14.95, Walmart Ebooks by Rakuten Kobo for $9.99.

. . . .

And more broadly, this is a potentially pivotal move for Kobo. While the company has described its “strategy from day one”–that’s Kobo CEO Michael Tamblyn using a favorite Amazon phrase, “day one”–as “partnering with the world’s best retailers so that they can easily offer their customers the option of reading digitally.” And it may finally be a way into the big continent-spanning market down the road from Toronto.

Despite partnerships with independent bookstores through the American Booksellers Association, Kobo’s presence in the States has never moved past single digits in market share, although it has maintained the home-team advantage “up north” in Canada.

. . . .

However, expect no one in Seattle to break out in a sweat here. Amazon’s Kindle ecosystem is profoundly dominant in the American marketplace, tied as it is into the Amazon Prime amalgam of advantages to retail consumers. The retailer is effectively a service-member of many US families now, the unquestioned go-to for everything from tonight’s movie to Saturday’s lawnmower and the kitchen pantry’s automatically restocking staples.

. . . .

Some might say this is stooping to conquer, but if the money comes in, Tokyo and Toronto may not be dismayed that American consumers are saying, “Oh, I got that ebook from Walmart” or “Shh, I’m listening to my Walmart book.”

At Inc, Justin Bariso, in covering on Monday (August 20) Walmart’s strong earnings report, points out that while the chain’s huge fleet of brick-and-mortar big-box stores grew at 4.5 percent, its e-commerce business, where Kobo stands, great at a rate of 40 percent, in CEO Doug McMillon’s plan, precisely to better compete with Amazon. The Rakuten Kobo element now can be seen standing beside McMillon’s steps toward more up-market branding in areas like fashion, in which Tommy Hilfiger, Calvin Klein, Donna Karen and other labels are coming in with Lord and Taylor.

Link to the rest at Publishing Perspectives


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PG says competition in the ebook space is good for indie authors. Among other things, it reduces the possibilities that anyone will take authors for granted.

Ebooks, Kobo, Video

18 Comments to “Canada’s Rakuten Kobo Arrives in Amazonian America at Walmart: Ebooks and Audiobooks”

  1. I have to point out regarding the headline that none of those corporations are solely in America. 🙂

  2. “To stay with audiobooks for a moment, the Kobo-Walmart audiobook offer undercuts by $5 the Amazon Audible subscription. Both subscriptions provide one audiobook monthly, Audible for $14.95, Walmart Ebooks by Rakuten Kobo for $9.99.”

    Wasn’t there whining that Amazon wasn’t paying the writers enough? I have to wonder how Kobo/Walmart will pay them more while charging less … And even not being a ‘prime’ member Amazon keeps offering me free audio books to ‘read’.

    “Despite partnerships with independent bookstores through the American Booksellers Association, Kobo’s presence in the States has never moved past single digits in market share, although it has maintained the home-team advantage “up north” in Canada.”

    Perhaps that ‘American Booksellers Association’ Association is what’s been hurting Kobo as ABA doesn’t like Amazon and its offerings …

    With luck we’ll visit this topic in a few months and see how everyone is doing. 😉

    • Best guess; the same as they were doing last week.

      • Simply dismissing two companies with the deep pockets of Walmart and Rakuten may be a mistake. The one thing we can count on in publishing is that things will change. We don’t know how or when. This could be a gamechanger or not, but I have every intention of assuming that at some point things will NOT be the same as they were last week.

        • Agreed they ‘could’. The question is if they ‘would’. So far they don’t seem to be eager to put the money/tech/people into the effort to match or beat Amazon.

          And very funny timing, in the last hour my gmail account has an added email from Amazon titled: ‘Get 2 FREE audiobooks today’ …

        • It’s not tbhe size of tbhe company but the size of their commitment. Otherwise Apple and Google would be bigger players. Especially Google.

          Rakuten is sooo committed to Kobo you can barely find their readers on their US website…usually used, sold by third party merchants. Rakuten is a B2B company not B2c and, while Kobo does sell to consumers, tbey rely on local partners doing the heavy lifting on the ground. Which is why their mainstream presence is near zero.

          I’ll believe they’ll have a meaningful impact on tbe US market when Kobo commit some of their own money.

          As for Walmart, this isn’t the first time they’ve dabbled in ebooks. They might be serious this time but I want to see more than a digital version of “stock it and they will come”. So far, all I’ve seen is minor buzz on enthusiast sites and establishment mouthpieces. Where is the media campaign from Walmart? Are they touting the launch in their weekly shopper? The glitches I’m hearing of suggest what we’re seeing is a beta launch running weeks or months late. A proper launch would’ve gone live before the press release and would never have gone the better part of the day redirecting to the pbook section or even to Kobo’s international site.

          Besides, all I said is I don’t expect any meaningful change in the near term. Months.

          Entrenched players in mature markets don’t get displaced in weeks or months. It took Amazon years to build up their Kindle customer base and reader loyalty. That kind of market presence doesn’t vanish overnight. Often not at all.

          Look at how thoroughly Sony messed up an entire console generation and still sold tens of mi!llions of units. That is the power of walled gardens and customer loyalty.

          Look at the staying power of the Macintosh, where not even four straight years of hardware neglect made the faithful switch.

          Amazon would have to royally screw up the readers before they even start *thinking* of defecting.

          People in publishing keep looking for a magic bullet to kill the demon Amazon but the demon is bulletproof. The time to challenge Amazon was 2010 and the only weapon that had a chance was Interoperable ePub. And that was killed by Agency after the Four hour Price war of june 2010.

          If Walmart had gotten into the market *then* they might have had a chance. Even as late as 2013 they might have stemmed the tide towards the walled gardens.

          But today too many people have spent billions buying Kindle ebooks and very few even know what how to migrate them from Kindle to epub. And that doesn’t factor in Kindle Unlimited or the power of 100 Million Prime subscribers.

          Displacing Amazon isn’t going to happen in months or even years. Amazon probably won’t notice any change in their ebook market share before 2020 at the earliest.

          What WalMart (and Apple) can rationally aspire to is to finish picking apart the carcass of Nook. If Walmart/Nook don’t totally flub this venture the big loser is B&N.

          And even there we can expect to see as many refugees switch to Kindle than to the new kid on the block.

          Barring a major tech disruption the die is cast for this generation. Walmart + Kobo is too little way too late. The BPGs have already gift-wrapped the global English markets for Amazon.

          • But today too many people have spent billions buying Kindle ebooks and very few even know what how to migrate them from Kindle to epub.

            And even fewer give a hoot.

  3. So far, all I’ve seen is minor buzz on enthusiast sites and establishment mouthpieces.

    I actually wonder if this will get much more press, as “Retail giant Walmart takes on Amazon in the ebook market” doesn’t jibe with the “ebooks were a fad that nobody cares about anymore, and print is back” meme.

    • Indeed…

      https://www.zdnet.com/article/dear-walmart-you-dont-have-to-copy-everything-amazon-does/

      Personally, I find the e-book experience emotionally distressing. Technology doesn’t improve everything. Paper books still have a glorious smell, a wonderful feel, and their sheer physicality gives them a certain substance.

      (yawn)

    • There’s that, too.
      Amazon may be today’s big devil but Walmart is yesterday’s devil and no favorite of the media.

      Still, you’d think the business sites would devote a line or two to the announcement. So far the closest to mainstream report I’ve seen is from Variety.

      https://variety.com/2018/digital/news/walmart-ebook-audiobook-store-kobo-1202913802/

      Which actually has one meaningful nugget that shows how committed Walmart is to ebook sales:

      “As part of the partnership, Walmart will also start to sell so-called digital book cards that can be redeemed online for ebooks in 3500 stores. Additionally, Walmart will sell Kobo’s latest ebook reader in 1000 stores.”

      That is out of over 5000 stores.

      • Ah, USATODAY has a piece. And they even cited Authorearnings:

        https://www.usatoday.com/story/money/2018/08/22/walmart-takes-amazon-starts-selling-e-books-first-time/1054103002/?utm_source=feedblitz&utm_medium=FeedBlitzRss&utm_campaign=usatodaycommoney-topstories

        “Walmart shoppers will be able to access e-books through a co-branded app, as well as on Kobo e-readers that are now for sale at Walmart.com. The Kobo Aura reader will be available at 1,000 stores beginning later this week.

        Walmart, which became the world’s largest retailer by offering a wide array of products at low prices, could possibly woo some readers and listeners away from Amazon with steep discounts. At least initially, it’s offering several deals.

        Shoppers who sign up online will get $10 off the first electronic or audio title that they purchase, while those who opt for the audio book subscription will get to try it out for free for 30 days.

        Still, it will take a lot of sales to topple Amazon. In 2016, roughly 38 percent of the 800 million printed books sold were purchased from Amazon, according to book industry data site AuthorEarnings.com in 2017. Amazon sold roughly 75 percent of the 400 million e-books that were purchased and nearly 95 percent of the 50 million audiobooks. “

      • https://www.statista.com/statistics/269425/total-number-of-walmart-stores-in-the-united-states-by-type/

        5000 is all kinds of stores. 3500 is the number of SuperCenters, which implies they will only be found there. The discrepancy between 1000 stores selling the reader and 3500 selling the book card is… odd. Maybe the reader would only be sold in bigger SuperCenters.

        It’s possible that’s driven by tech support considerations, although frankly I can’t imagine much worse hell than having to provide tech support for a Walmart e-reader and it’s book cards.

  4. [posting to follow]

  5. If Walmart had opened a new site for selling shoes, would we expect lots of PR and media attention? Why expect it for books? Books have become just another item carried by big retailers.

  6. I’m hoping for the best, since I have a lot of books posted on Kobo. I’ll be watching my royalty payments with interest over the next few months.

    To me, it seems more likely that Walmart will attract the rather large number of people who are still tech-wary, as opposed those already committed to Kindle. There are a lot of older and/or less tech-savvy folks who feel more comfortable with a familiar bricks-and-mortar store (even if they access it online).

    There’s a lot of room for growth in ebooks, in my opinion. Personally, I read a lot more now than I used to because it’s so convenient. And there are a lot of low-priced and free books available, as well as backlist books by favorite authors no longer in print. As I said, I’ll watch this development with an open mind. And crossed fingers.

  7. I’m kind of surprised at how little fanfare Walmart has given this venture. I was at our local store (one of three in my county, but the main one I shop at), and only saw the display with the cards because the magazine/book section was next to the “as seen on TV” section where I waited for my mother.

    The display was at the beginning of the small section for books (a square “U” shape that’s ridiculously small). About two feet wide and maybe four and a half feet tall, there were no signs announcing what it was, why anyone should pay attention or that it was anything special at all. No where near the electronics section, where the ereader might be available, no sign even mentioning there was an ereader. No real explanation of what the cards were for.

    If the aim is to entice people who might not otherwise want to try ebooks, it was a fail. Why wasn’t more effort put into this idea? There are loads of Walmart shoppers who might be converted to reading on a device, but you’re going to have to lead them there, not drop an unbaited hook into the water and hope they find some reason to jump at it.

    No one is going to take any of Amazon’s market share if they don’t step up and give people what they want. Especially if they don’t know they want it yet. Walmart could make a dent, since shoppers can find lots of stuff online there, sort of like they do at Amazon. They rolled out the order pick up kiosks, and the grocery pick up service, which means they’re thinking outside the box, but they need to get better at selling books.

    • The size of the display is one reason I’m not sure how serious Walmart is about this move. It’s not as if there is much money in it for them.

      Simplistic estimate:

      Assume they’re successful enough to eat up Nook’s share: about $100M in sales for the first year. Agency guarantees them 30% or $30M that they have to share with Kobo. Figure a two-thirds split for Walmart, that is $20M. The displays for tbe stores with readers look to be, what, five feet wide/two feet deep? Let’s figure ten square feet times 1000 stores, so that’s a commitment of ten thousand square feet producing $2000 per square foot a year or about $6 net per day. Twenty gift cards a day per display. Of course, they’ll be selling some readers in that $100M gross, so the net will be somewhat less since the margin on the readers is lower. And if we count the 2500 stores with the four square feet card-only displays, the average goes down even more.

      Anyway, $100M for the first year is probably optimistic but even if they manage it (Apple didn’t) this is a deep pockets company moving $500B a year. $100M is pocket lint to them.

      It is more likely an opportunistic move to pick up some loose change than a strategic play.

      FWIW: Walmart doing online-to-store is about ten years late.

      Circuit City was doing it in 2005, with a 24 minute guarantee:

      https://www.youtube.com/watch?v=kgRmC7fZ1bA

      They matched their online prices in-store, too.

      It was too late to save them but they had the right idea and they made it work.

      Ship-to-store is about the minimum one would expect from a serious B&M player these days.

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