Have “social” updates ruined the Kobo app?

It’s no secret that Kobo, the e-reading company formerly owned by Indigo Books & Music, is betting big on the “social in-book e-reading experience” to set it apart from competitors such as Amazon’s Kindle and Apple’s iBookstore.

Kobo made this much clear with the September launch of Kobo Pulse, a package of updates that effectively integrated social media within the company’s e-reader. The new features permit users to connect with other readers online, comment on an ebook’s content, view statistics about a title’s popularity, and post reading updates and passages to Facebook, among other functions. The new capabilities are in addition to Kobo’s long-established Reading Life program.

It seems, though, for some Kobo diehards, the updates have gone too far.

Just a year after naming Kobo’s e-reading iPad app the best on the market, digital publishing and tech blogger Chris Walters has come out swinging against it. In a post on his website, Walters says that, while he used to believe the Kobo app “ahead of the curve,” he now avoids using it altogether. Noting that the changes came about in response to restrictions against in-app purchases Apple began implementing last year, Walters says Kobo’s unrelenting attempts to make e-reading fun and connected have missed the mark and made the app unpleasant to use.

Regardless of whether or not users find the social features cumbersome, Walters’ main complaint is levelled against Kobo’s increasingly aggressive sales tactics. Now when the app is launched, it opens to a page of recommended reads that takes up much of the display screen. Moreover, Walters points out that when you do opt to make a purchase, the process has become much more time consuming and involves multiple website redirections.

Walters ends his post by putting these changes in context. From Booksprung:

Part of me wonders if this is the first sign of the New Face of Kobo, now that it’s been bought up by Rakuten. Software updates don’t happen overnight, so this was likely something Kobo had in the works for a while. Rakuten surely had enough time to kill this update but chose to release it anyway, which is a good sign that this is the way things will work with Kobo from now on. Who knows? By the time summer comes around the Kobo iOS app may be nothing but an impenetrable billboard of book samples, Facebook alerts, infographics, help screens, pop-up windows, slide-out sheets, and “share this” badges.

Has Kobo’s e-reading app gone too far, or are we asking too much of retail-based companies? What can Kobo do to win back Walters and other disgruntled readers?

Why ebooks in Quebec are a taxing issue

While NPR urges the world to stop the ebook versus print debate, in Quebec, the debate has shifted to how digital titles are taxed, and what constitutes a “real book.”

According to Montreal’s The Gazette, the Quebec government has treated print books as zero-rated for tax purposes since 1996, but ebook sales can still include the 9.5 per cent provincial sales tax.

Robert Hayashi, CEO of the digital publishing advocacy organization eBound Canada, disagrees with the discrepancy. “Just like there is a hardcover (print book) format and a softcover format, ebooks are just another format,” he told the The Gazette. “So if government is not taxing the hardcover book, we believe that government should also not tax the ebook.”

In another Gazette article, Kobo’s vice-president of finance, Daniel Budlovsky, lamented that Quebec consumers who purchase ebooks through Kobo are charged both provincial and federal sales taxes, while those who buy their ebooks through U.S. competitor Amazon pay no sales taxes.

Although Budlovsky said the discrepancy “should be atrociously viewed by the Canadian public,” Kobo isn’t ready to battle the Canadian government to change the tax laws.

“We accept the law for what it is and feel that it should be changed but that is a long and bureaucratic process,” Budlovsky said. “We work in a … fast-moving industry where we need to stay ahead of the competition by working on things that are under our control.”

Indigo to focus on new product design with Kobo cash influx

A story in today’s Globe and Mail looks at what the Kobo sale means for its majority owner, Indigo Books & Music, which is likely to find itself flush with cash as a result of the deal. The sale, which could net Indigo up to $150 million, frees up the retail chain to invest in new products and “expand non-book ventures,” the Globe reports.

Indigo president and CEO Heather Reisman is quoted in the story:

“We have to grow very considerably to balance off what we lose in our book business,” said Ms. Reisman, who, with her husband, financier Gerald Schwartz, owns more than half of Indigo. “But I have every expectation that within 18 months, we will fully make that transformation … I would rather, for shareholders, to employ the funds and deliver to them a great result.”

The Globe goes on to report that Indigo expects book sales to fall to 50 per cent of overall sales in coming years, down from the current level of 75 per cent. Reporter Marina Strauss points to the 2013 Canadian expansion of Target as a major competitor in the toy, home decor, and giftware market.

For anyone who has visited one of Indigo’s new format stores, in which books vie for floor space with an array of household products, Indigo’s survival strategy will not come as a surprise. However, with its significant investment in Kobo, Indigo had seemed to be in an enviable position in the burgeoning e-book market. In an interview yesterday with Canadian Business, Reisman said the capital requirements of remaining competitive in that market were too much.

Still, e-books will remain part of Indigo’s future. According to the Globe, “[A] 10-year pact with Kobo ensures Indigo a ‘meaningful’ share of Kobo’s profits on electronic-book sales in Canada.”

“Giller effect” boosts e-book sales of Half-Blood Blues

The so-called “Scotiabank Giller Prize effect”  is already helping e-book numbers for Esi Edugyan’s Half-Blood Blues (Thomas Allen Publishers).

Yesterday, Half-Blood Blues was listed 3,376 on Amazon’s bestsellers list for Kindle e-books. As of noon Wednesday, the book had risen to 360, a significant increase in sales overnight. In the Apple iBookstore, it is the third top-seller, just below the e-book and enhanced e-book versions of Stephen King’s 11/22/63. Patrick deWitt’s The Sisters Brothers (House of Anansi Press) is the only other Giller Prize finalist in the iBookstore’s top 10, at number five.

Giller finalist Michael Ondaatje’s The Cat’s Table (McClelland & Stewart) is the fifth best-selling e-book at Kobo, the only e-commerce site that is prominently merchandising Half-Blood Blues as the Giller winner.

Ondaatje’s book is also the top-seller in the new Canadian Google eBookstore, which launched last week. As part of its roll-out strategy, Google tailored the store for a Canadian audience, dedicating a section on its homepage for the Giller shortlist, however, Half-Blood Blues is conspicuously absent. According to David Glover, Thomas Allen’s marketing manager, the publisher is working with Google, and the title will be available soon.

Prices for the e-books also vary between websites. At the high end, Half-Blood Blues is available in the Apple iBookstore for $20.99. Kobo is carrying the e-book for $15.49, and Amazon, $9.60.

(Photo by Tom Sandler, courtesy of the Writers’ Trust)

Indigo’s sale of Kobo realizes “a stupendous return,” Reisman says

As many in Canadian publishing’s inner circle primped and primed themselves for the Scotiabank Giller Prize gala, important industry news of another sort broke with the announcement Tuesday evening of Indigo’s decision to sell its majority stake in Kobo, the e-reading company it spun off less than two years ago, to Japanese e-commerce giant Rakuten.

Indigo is expected to realize between $140 and $150 million from the sale, but it raises questions about what the chain’s future will look like without a significant investment in e-reading (not to mention whether the deal will be allowed to go forward under the Department of Canadian Heritage’s foreign-ownership rules).

In a Q&A published today in Canadian Business magazine, Indigo CEO Heather Reisman addresses some of those questions, telling staff writer Jordan Timm that the sale represents “a stupendous return on our investment” in Kobo, especially in a market that is becoming increasingly competitive:

Over the next year, this business [Kobo] will need in excess of $100 million to take it to where this industry is going, and we just cannot play in that league for that amount of capital. That’s first, but it’s also a question of speed. How quickly can you grow this business in order to establish your leadership position? What Rakuten brings is tremendous reach with their huge customer network.

Reisman was, understandably, less specific about how Indigo will use the influx of capital from the sale, but she did say a new acquisition for Indigo is “very possible”:

We must and will fundamentally transform Indigo. The idea of a book retailer as it existed up until the last two years – that option no longer exists. We did two things two years ago: we made the decision to commit to Kobo, and we also made the decision to fully transform Indigo into a whole new kind of retailer and e-tailer, and we are on that track right now. And there’s no doubt that some of that money will be used in that transformation process, both digitally and physically.

In related news, Indigo’s most recent financial results, released at the same time as the Rakuten announcement, show a relatively flat quarter, with sales up 1.7 per cent to $218.5 million. Revenues at Indigo and Chapters superstores were down 4.3 per cent, while revenues at small-format stores were down 2.9 per cent. By contrast, Kobo sales were up 219 per cent to $40.9 million, though the division operated at a net loss of $10.8 million.

Kobo to be acquired by Japanese e-commerce company Rakuten

Kobo announced Tuesday it has entered into a definite agreement under which it will be acquired by the Japanese e-commerce company Rakuten. The deal is expected to close in early 2012.

According to a press release, Rakuten intends to “acquire 100 per cent of total issued and outstanding shares of Kobo for US$315 million in cash.” As part of the agreement, the e-reading platform will continue as a stand-alone operation, maintaining its Toronto headquarters and employees under the leadership of Kobo CEO Michael Serbinis.

In the press release, Serbinis said:

“From a business and cultural perspective this is a perfect match….We share a common vision of creating a content experience that is both global and social. Rakuten is already one of the world’s largest e-commerce platforms, while Kobo is the most social e-book service on the market and one of the world’s largest e-book stores with over 2.5 million titles. This transaction will greatly strengthen our position in our current markets and allow us to diversify quickly into other countries and e-commerce categories.”

Kobo was founded in 2009 by Indigo Books & Music before it was spun off into a separate company 10 months later, with Indigo remaining as the majority shareholder. Indigo will receive approximately $140 million to $150 million in the Rakuten deal. In a separate press release, Indigo CEO and chair of Kobo Heather Reisman said:

“Notwithstanding the sale, Indigo will maintain a very strong relationship with Kobo, supporting the products and the services both in-store and online…. The success of Kobo confirms that Indigo is a great brand and a strong platform on which we can continue to innovate and grow.”

In October, Kobo announced it would be offering self-publishing services and launched the Kobo Vox, a tablet to compete against the Kindle Fire and iPad.

Kobo tablet to do battle with Kindle Fire, iPad

Just months after launching a touchscreen e-reader at BookExpo America, Kobo has unveiled its latest e-reading device, a 7″ colour tablet that will go head-to-head against the Kindle Fire and other tablet devices. The Kobo Vox will tie into Kobo’s online store of more than 2.2 million e-books, and will allow users to surf the Web, check e-mail, and download apps for its Android operating system.

Kobo is billing the device as the world’s first “social e-reader,” as it will allow readers to plug into Facebook and Kobo’s unique social platform, Reading Life. The device’s name comes from the idea of the vox populi, or “voice of the people.”

The device retails at $199.99 and is available for pre-order in Canada and the U.S. It will begin shipping Oct. 28.

The Financial Post has the technical specs:

The Kobo Vox is built on the “Gingerbread” version of Google Inc.’s Android operating system and will enable users to download applications, watch movies and listen to music in addition to read digital books. Users will also be able to access their email via the device — it supports Microsoft ActiveSync, IMAP and POP technology — whether they’re using Gmail, Yahoo or corporate email.

The Post‘s Tech Desk editor, Matt Hartley, goes on to point out that the WiFi-only Kobo Vox is half the price of the least expensive versions of Apple’s iPad and Research in Motion’s BlackBerry PlayBook. Unlike the Kindle Fire, which begins shipping in the U.S. beginning Nov. 15, it is being made immediately available to Canadian consumers.

The tablet will stand out in Canada, where the selection of e-readers is sparse, but as columnist Michael Kozlowski of Goodereader.com points out, Kobo faces an uphill battle in a U.S. market already saturated with inexpensive e-readers and tablets:

Kobo had an agreement with Borders to exclusively sell its devices in their retail locations. Since the collapse of the company Kobo has really been without a home in the retail sphere. They really need to iron out a new agreement when their contract officially expires in 2012 in order to secure more stores to peddle their wares.

Kobo Pulse gets to the heart of “social in-book e-reading”

Kobo has released more details about Kobo Pulse, its new “social in-book e-reading experience”

Essentially a social media tool, Kobo Pulse will allow Kobo users to connect with other people reading the same book, comment on passages or the book as a whole, and view statistics (e.g., how many people are reading the title at a given time). According to a press release, readers can also post reviews and engage in online conversations. As more people join the conversation, the Kobo Pulse will turn “larger and brighter,” indicating the level of interaction.

Last Friday at F8, Facebook’s developers conference, Kobo CEO Michael Serbinis spoke about how the company’s e-reading app, Kobo Reading Life, will be seamlessly integrated into the Facebook interface. Today’s press release provided more details on the new features, which include the ability to follow friends’ reading activity; customizable privacy settings; automation of Ticker e-reading updates; and profile “‘call-outs’ for recently read books, most read authors, books that have the most time read and recent awards.”

A release date for Kobo Pulse was not available. However, the Facebook integration features will “roll out gradually over the coming months.”

Kobo Reading Life and Facebook partner for “frictionless” social e-reading

Soon Facebook users won’t have to click a button to tell their friends what they’re reading. Yesterday at F8, Facebook’s annual developers conference, Kobo CEO Michael Serbinis announced that its e-reading app, Kobo Reading Life, will be seamlessly integrated into the Facebook interface as part of the website’s Open Graph product, along with services for music, film, games, and news media.

During the conference’s keynote speech, Facebook CEO Mark Zuckerberg referred to Open Graph as a means of “frictionless sharing,” meaning once a user signs up for an app, it will automatically track their media usage, which will then be shared, in real-time, with friends as part of Facebook’s new Ticker feature.

“You don’t have to ‘like’ a book, you can just read a book. You don’t have to ‘like’ a movie, you can just watch a movie…” says Zuckerberg, referring to the website’s ubiquitous Like button. Facebook’s new Timeline feature, available now as a beta program, also gives users the ability to build personal reports, such as how many pages read in a single week.

In a video interview at F8, Kobo Reading Life product manager Jason Gamblen and Serbinis offered more insight into the integration. Through the Reading Life app, Serbinis says, a Kobo user can track “all the books you’ve ever read, what you’re reading right now, times a day you read, stats about yourselves, friends that you share books with.” Gamblen explained that when a Facebook user adds Kobo to their Timeline, they can also account for the number of books read, the amount of time and the most popular days spent reading. Users are also eligible for awards by hitting milestones such as reading 50,000 pages or a certain number of classic books.

Reading Life’s “social e-reading” features allow people to connect and engage with other Kobo users via Facebook. “Our best recommendations come from friends, not the 400th Harry Potter review on some e-commerce site,” says Serbinis, who also briefly mentioned a new initiative, Kobo Pulse, which will be officially announced in the next couple of weeks.

Kobo sues Borders, strikes European deal

It’s been a busy week for Canadian e-reading company Kobo. On Tuesday, representatives for Kobo filed documents at a bankruptcy court in New York to ensure that Kobo licenses held by Borders are not put up for sale when the failed U.S. bookstore chain starts liquidating its intellectual property assets. PaidContent.org reports:

Kobo … wants to prevent whoever wins the auction from obtaining the customer data. The company may also be worried because the licenses are likely to contain an exclusivity clause that prevents Kobo from partnering with another seller. … In its filing, Kobo says the licenses are invalid because Borders did not hold up its end of the bargain. The Toronto-based company also says it is illegal under Canadian privacy law to transfer customer data.

Borders was an early partner with Kobo, at one time owning an 11 per cent stake in the e-reading company, which is backed by Indigo Books & Music and the beleaguered REDgroup Retail, among others.

Then, on Wednesday, Kobo announced a new deal with the German store of online retailer Redcoon that will finally introduce the company’s Kobo eReader Touch Edition to the European market (it was originally set to release in Germany in August). The Kobo Touch will be available in October at a price of €149.

According to a press release from Kobo:

Redcoon is one of the largest online retailers for consumer electronics in Europe, serving consumers in Germany as well Austria, Spain, Portugal, Netherlands, Belgium, Poland, Italy, Denmark and France – in this market segment, the online retailer is seen as a major competitor to Amazon.com in Europe.

…

“The retail partnership with Redcoon starts in Germany, but is going beyond this market,” [explains Kobo EU director of sales Thorsten Schröer]. “As Kobo expands to additional European countries later this year, Redcoon will offer our products there as well.” Additional leading retail partners will be announced shortly.