Kobo dominance in Canada: good luck or good business?
March 9, 2014 | 2:32 pm
By Joanna Cabot
I’ve long chalked up Kobo’s success in Canada at least partly to good business: they’re aces at local content, have a huge presence in Canadian retail thanks to their origins as a subsidiary of our major bookstore chain, Indigo, and recently they were acquired by the deep pockets at Rakuten, a leader in the Asian market.
Two recent articles, however, suggest that Kobo’s successes to date have been more a result of good timing than anything else. Nate at The Digital Reader wrote a great summary of Kobo’s recent wranglings with the Canadian Competition Bureau. A day later, Michael at GoodeReader (in a somewhat erroneously titled ‘exclusive’) reported on much the same thing, albeit with a more inflammatory point of view.
Here is the short version:
When Kobo launched, Amazon was in the midst of agency pricing. This allowed Kobo to get a foothold in the market, because they could undercut them (being in Canada and so not bound by agency agreements) and gain market share. Now that agency pricing is done, they don’t have this advantage anymore and their market share is slipping. So they are asking the competition bureau to restore agency pricing, at least in a modified fashion, so they can be competitive again.
The even shorter version, as Nate neatly summarizes:
“In short, Kobo is saying that when Amazon was allowed to discount ebooks in the US, Kobo was unable to compete effectively, not even by means other than price (marketing, CS, features, community).”
It seems unlikely that the Competition Bureau will conspire to help Kobo raise book prices for Canadians. So, what are we left with?
Buy Kindle next time. Soon, it will be the only option.