Borders finally enters the electronic-publishing world, announcing a partnership with Kobo that calls for the book retailer to set up a Borders-branded electronic store with the Canadian firm and investing $5 million in the Indigo Books spinoff -- with a Border-branded eReader possibly in the works.
It was a big news day both for Borders and Kobo, but it's pretty clear that much of their business strategy is being made up as they go along. Kobo is the former Shortcovers, launched by Indigo Books & Music, which operates in Canada under the Indigo and Chapters retail chains. Kobo is now a global phenomenon: besides including the Borders investment, the firm has attracted $11 million more in investments from Instant Fame, a subsidiary of Cheung Kong (Holdings) Ltd., and REDgroup Retail Pty Ltd., a bookstore operator in Australia and New Zealand.
The Shortcovers strategy -- and now the Kobo strategy -- is to offer eBooks in a platform-agnostic manner, giving readers a chance to read titles on the device of their choice. It's not a unique one -- Amazon is basically doing the same thing with its dedicated reader software on Macs, PCs and smartphones in addition to the Kindle -- but it's one that Shortcovers has perfected on the technical side.
“We have assembled a strong syndicate of investors and partners across key categories – retail and mobile distribution. We have a unique opportunity to power the eReading revolution by reaching consumers everywhere they shop today, on any device they choose,” said Michael Serbinis, Chief Executive Officer of Kobo.
Initially Borders will continue to sell Sony Readers in retail stores while offering the Border-branded Kobo store online.
Down the road will come an eReader of some sort; neither Borders nor Kobo actually addressed its presence in the press releases announcing these moves, but we've been told by Borders folks that one will be released before the end of the year and be more "open" than existing eReaders, will include WiFi and wireless, and be built around ePubs. (Score another win for Adobe!) We expect more details to come out as time goes by.
Here's the press release from Borders:
Borders Group, Inc. (NYSE: BGP) today announced a strategic investment and commercial partnership with Kobo, Inc., a global eReading service that is the newly named spin-off of Toronto-based Indigo Books & Music Inc.'s Shortcovers digital reading initiative. Through the partnership, Borders will launch a new eBook store integrated into Borders.com and powered by Kobo. In addition, Kobo will power a Borders-branded eBook store for multiple mobile devices. Sales through these Borders-branded eBook stores will be booked by Borders. Kobo's mobile applications are device neutral, which will enable consumers to purchase eBooks from Borders on popular smartphones such as the iPhone, BlackBerry, Palm Pre and Android, as well as other devices. Borders and Kobo plan to launch these new services within the second quarter of 2010.
Kobo is an innovative company that as Shortcovers has already, in a matter of months, provided eBooks to customers from over 200 countries who have downloaded its reader application over one million times online and through devices including smartphones, desktops and popular eReaders such as the Sony Reader. As a leading book retailer with a strong customer following--including over 35 million members of its Borders Rewards loyalty program--Borders Group shares Kobo's vision of providing consumers any book on any device. Other investors in Kobo include Indigo, Instant Fame, a subsidiary of Cheung Kong (Holdings) Ltd. of Hong Kong and REDGroup Retail Pty Ltd. of Australia. "Our partnership and investment in Kobo is a significant step in our digital strategy of providing eBooks however our customers want to consume them," said Borders Group Chief Executive Officer Ron Marshall. "Kobo's global, device neutral and open approach will allow Borders-branded software applications to be downloaded on a variety of devices and is the right move for Borders as the digital market continues to evolve. We look forward to building on this key element of our digital strategy as we address the growing eBook opportunity while also remaining committed to improving our brick and mortar superstore business."
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