Kobo signs deal to sell through U.S. indie bookstores

Kobo has signed a new partnership with U.S. independent booksellers will give loyal indie customers the option of digital reading, while continuing to support their local bookstore.
Journalists and guests test drive Kobo. The Toronto-based company has a deal to sell through independent bookstores in the U.S. (Canadian Press)

Kobo has signed a new partnership with U.S. independent booksellers will give loyal indie customers the option of digital reading, while continuing to support their local bookstore.

The Toronto-based, Japanese owned, e-reader company said Wednesday it has struck a deal with the American Booksellers Association to sell its device and its e-books through independent U.S. bookstores.

"It gives us a new demographic, not so much age but in terms of how these people have typically read," said Todd Humphrey, the company's executive vice-president of business development.

Through the deal, Kobo is hoping to convert some of those "true blood readers" who may have been reluctant to make the switch to digital reading.

While some just prefer the feel of a physical book, Kobo is counting on other readers who are focused on supporting independent booksellers. Many of those shops have been forced to close shop as big chains become more dominant and more readers make the switch to e-books.

"We are very quickly starting to attract that 'true blood' reader," Humphrey said.

"The other thing some of those true readers have is a really strong affiliation, not with a big box book store but with their independent, with their local bookstore."

Kobo expects to launch its partnership with nearly 2,000 ABA-member stores this fall, starting with 400 stores.

Buy e-books through store website

Through the partnership, customers will be able to purchase Kobo devices and a suite of products at local bookstores and also access Kobo's catalogue of more than 2.5 million titles through the website of their favourite store.

"They'll be able to work with their customers and say 'here's a new platform upon which to read and here's everything you need to do so right out of the gate'," Humphrey said.

Currently, Kobo and its rival e-reader device companies sell their devices, as well as their catalogue, through big box stores like Indigo and Chapters in Canada.

Kobo has fallen behind its rivals in the key U.S. market, where Humphrey admits "super strong" competitors like Amazon's Kindle and Barnes and Noble's Nook reader dominate. But, he added this deal will put Kobo into more bookstores in the country than any of its competitors.

'Giant step back into U.S.'

"You can look at it as us taking a giant step back into the U.S," he said.

Humphrey said the deal would be a "true partnership" between Kobo and independents, adding the revenue sharing model will be "very favourable" to both Kobo and the bookstores.

He added that Kobo is also looking at deals with independent booksellers in Canada and elsewhere as it aims to become "the company to power independent bookstores around the world."

Kobo is the only standalone e-reader company, while competitors Kindle, Nook and the iPad have access to book catalogues through their owners' websites.

Humphrey said he doesn't look at not having a bookstore affiliation as a challenge, but an advantage as the company is "not distracted" by other businesses, like sales at physical stores.

Toronto's Indigo Books & Music Inc. (TSX: IDG) sold Kobo Inc. to Japan's Rakuten Inc. for $315 million US in a deal that closed earlier this year.

Humphrey said the new owners gave it a source of cash to innovate and expand, both in terms of the devices it offers and the number of countries they are offered to. He added that readers should stay tuned for further developments this fall.

Indigo founded Kobo and spun it off in 2009 to compete in the global e-book sector against industry leader Amazon and a multitude of other companies with devices, software or services.

Kobo had been quickly catching up to Amazon's Kindle with its own reader and distribution system. However, ebook sales were also quickly eating into profits of traditional bookstores like Indigo and Chapters.