Why Kobo didn't focus only on the U.S., home turf of Amazon

[fjtorres]

+No protectionist measures?
When Amazon set up shop in Canada they had to buy the books from Chapters because tbey weren't allowed to ship from the US.
To sell ebooks, they have to have deals with the local publishers and distribute those versions, not the US versions.

Canada's "cultural protectionism" is legendary. It works a lof like Japan's manufacturing protectionism, not by overt laws, but by covert regulation and bureucratic foot-dragging by the deep state establishment.
And most of it is greased by Indigo/Chapters influence peddling as documented by the Canadian media.

(Try looking into the history of B&N and Borders in Canada.)
Just one example: http://bookshopblog.com/2010/12/28/h...ll-book-store/

All that said, none of this means that today's Kobo hardware or bookstore are substandard.
Just that their management doen't have and never had any stomach for free and open competition. Just look to Tamblyn's fierce and prolonged kneejerk battle against the slap-on-the-wrist minimal "penalties" of the agency conspiracy in Canada. They made zero difference but they fought tooth and nail. And still griped after the watered down version that came.

Even when it is meaningless they want it their way.

[pwalker8]

Originally Posted by fjtorres

+No protectionist measures?
When Amazon set up shop in Canada they had to buy thebooks from Chapters because tbey weren't allowed to ship from the US.
To sell ebooks, they have to have deals with the local publishers and distribute those versions, not the US versions.

Canada's "cultural protectionism" is legendary. It works a lof like Japan's manufacturing protectionism, not by overt laws, but by covert regulation and bureucratic foot-dragging by the deep state establishment.
And most of it is greased by Indigo/Chapters influence peddling as documented by the Canadian media.

(Try looking into the history of B&N and Borders in Canada.)

All that said, none of this means that today's Kobo hardware or bookstore are substandard.
Just that their management doen't have and never had any stomach for free and open competition. Just look to Tamblyn's fierce and prolonged kneejerk battle against the slap-on-the-wrist minimal "penalties" of the agency conspiracy in Canada. They made zero difference but they fought tooth and nail. And still griped after the watered down version that came.

Even when it is meaningless they want it their way.

Agency conspiracy? Oh, you mean the US government anti-competition lawsuit to protect Amazon with the legal theory given to the government by Amazon's lawyers. Might want to be a bit careful thrown those stones.

The first thing that a large successful company does is throw up barriers to competition, usually using the government as a tool. It's not really rational to fault Kobo for not wanting to tilt against that windmill, but rather focus on building their business in a friendlier environment.

[fjtorres]

Jeeze.
Look at Amazon's market share year by year and you'll find their biggest growth came under Agency.
And it's growing even more under Agency Part Deux.

Price fixing, *everywhere* favors the big entrenched players, which in Canada is Kobo and the US Amazon, which is why it was and still is stupid for the big publishers to break the law that way. All they did was kill the smaller more agile players who were nibbling at Amazon's share and had them down to 54% ebook share when agency took hold. By the end of Agency they were up to 70% and stayed that way untill Agency Part Deux. Now they are not only up to 80%, but they've also boosted their print share past the 50% mark. It's not quite Indigo territory but it's getting there.

Amazon fear seems to drive otherwise smart executives to do really stupid things. Like undercutting Apple, Google, Nook, and kobo on the ebook side, just to boost print sales, which helps Amazon and nobody else. And only when Amazon chooses to boost print sales.

Every step they take to limit competition only makes them more dependent on Amazon.

[llcj]

@fjtorres, in general, Amazon can't sell UK published books in the US. Publishers have restrictions on these things. This is the same throughout the world. It is disingenuous to suggest otherwise. Canada is a small market, it went after the UK market instead, a market that is about two and a half times that of Canada.

[JSWolf]

Originally Posted by ottdmk

To my knowledge, there's no protectionist measures here that helped Kobo. Their dominance in the Canadian market happened mainly because Kindle hadn't gone international, as you said. But there was nothing stopping Amazon from selling here except perhaps for the fact they hadn't lined up their WhisperSync partners yet.

And when Amazon did start selling the Kindle here, Kobo was helped out by the fact that Canada is a secondary market for Amazon.

That and the fact that Overdrive does not support the Kindle in Canada.

[Nate the great]

Originally Posted by ottdmk

To my knowledge, there's no protectionist measures here that helped Kobo. Their dominance in the Canadian market happened mainly because Kindle hadn't gone international, as you said. But there was nothing stopping Amazon from selling here except perhaps for the fact they hadn't lined up their WhisperSync partners yet.

And when Amazon did start selling the Kindle here, Kobo was helped out by the fact that Canada is a secondary market for Amazon.

The check is in the mail, the govt is here to help, and the US is not an imperial power.

Any other myths we should cover today?

[fjtorres]

Originally Posted by llcj

@fjtorres, in general, Amazon can't sell UK published books in the US. Publishers have restrictions on these things. This is the same throughout the world. It is disingenuous to suggest otherwise. Canada is a small market, it went after the UK market instead, a market that is about two and a half times that of Canada.

Actually, they do.
As long as they are in print they can sell UK books and videos from Amazon UK.
Lots of bookstores have done it for ages. My all-time favorite Bookstore, Moonstone Bookcellars in DC used to have shelves and shelves of UK and canadian titles. I would routinely walk out with dozens of them, books out of print in the US but readily available in the UK that Moonstone brought over.

And, no, it is neither disingenuous nor the same all over the world. Ask aussies about the Book Depository. Print books flow freely across most of the western world. Except when Canada wanted to protect Chapters.

I really don't care what you folks do to yourselves but the fact is that hothouse companies that are "protected" from competition never learn to compete and their development ends up stunted at best and they collapse at worst. That is what happened to GM and Chrysler around the turn of the decade. And several giant Japanese companies...

Kobo's corporate culture legacy from Indigo/Chapters is the single biggest obstacle they face in staying relevant outside Canada. Because it is well-nigh impossible to keep the world at bay forever. Sooner or later the protective barriers collapse. And then the bill comes due.

[llcj]

I'm no expert in this field and I doubt that anyone else here is either. Chapters is a retail seller, not a wholesaler or a publisher. To say that Amazon was forced to buy its books through Chapters doesn't pass the smell test. In fact, I would say it is close to ridiculous.

Chapter stores, as do other Canadian bookstores, carry US, UK and pretty much titles from everywhere else in the world. Why anyone would think otherwise is beyond me.

Print books flow freely into Canada. Amazon.com has sold books into the Canadian market for a very long time with no problems. My husband and I have bought both new and used through them for many years.

I was referring to publishers georestictions which is what you seemed to imply. This is the only way I could see your statement making any sense.

Frankly, this reminds me of the softwood lumber issue. For what, close to forty years the US has cried foul and every time it goes to a world trade tribunal, the ruling goes against the US. And with that, I have probably crossed the line into P and R and with that I am out.

[fjtorres]

Here is one of many *Canadian* reports of the hoops Amazon had to go through to sell print books in Canada. Part of the reason it took them seven years to open shop.

https://www.theglobeandmail.com/repo...ticle22626479/

The rest of the story is that when the distributors failed to fill orders as promised, Amazon was forced to buy the books at retail from Chapters to meet their customer orders. Otherwise they would have been forced out of the market.

Yes, it happened. Really. Even if you weren't paying attention.

Small retailers get jerked around by entrenched players all the time and yes, once upon a time Amazon was a small player trying to establish itself and getting jerked around by distributors afraid of offending the big gorilla. Now Amazon is the Gorilla and nobody jerks them around.

It is hardly rare for small bookstores to get short shrift from publishers and distributors obsessed with volume sales. And these days it is actually common for them to order from Amazon when a popular book is selling faster than the distributor can deliver. Amazon does next day delivery after all, and their retail prices are comparable (if not lower) than what the distributors charge the Indie stores. (That is where the Indie store complaints come from: Amazon sells books profitably at prices lower than what the Distributors charge them. Volume discounts at work.)

And those foreign ownership restrictions? Look'em up. Do your own research, guys.
You don't need to be an expert to find out what world you live in.

"The truth is out there."

[llcj]

Yeah, the truth is out there and it isn't at all what you have claimed.

Hey, what would I know, after all I do live in Soviet Canukistan.

OK. I've now had a chance to actually read the article and not just skim it.
About three years later Amazon did set up Amazon.ca. I doubt that anything had changed in those three years. Whether or not the distribution system is unfair or protectionist, I'm not going to argue.

You stated in post #16, "When Amazon set up shop in Canada they had to buy the books from Chapters because they weren't allowed to ship from the US." This leads one to think that Amazon was forced to buy solely from Chapters, which is untrue. I'm not going to speculate as to why the distributors couldn't fill Amazon's orders.

I maintain that my access to books in Canada equals yours or anyone's. No one stops my orders from Amazon.com at the border. If a publisher has the rights to sell a book in Canada, I can by it here. My challenge to you is this; wander across the border, stay a while and see how easy it is to buy book.

[ottdmk]

I'm not denying that Amazon had trouble moving into Canada for their primary business (the fulfillment of physical goods). From what I've been reading, that seems obvious.

But I fail to see how this helped Kobo. Kobo started in 2009, long after Amazon had finished jumping through all the hoops to become established here. Amazon was selling ebooks here through amazon.com in 2009... I got that from Nate's blog, for example.

Kobo was helped by their (ongoing) association with the country's largest book retailer, no doubt. But that's not protectionism... at least, not directly anyway.

ETA: Did some further research. The Kindle (and its e-books) became available in Canada November 2009. Kobo's first e-reader did not become available until May 2010. There was a five week delay between Kindle launching internationally and the Canadian launch; I've been unable to discover a reason for the delay but it doesn't look like protectionism. Plus despite the delay Amazon still beat Kobo to market by six months.

[John F]

This article about market share has been posted before and shows how Kobo is doing in some of the bigger markets:

http://authorearnings.com/report/february-2017/

[DNSB]

Originally Posted by fjtorres

+No protectionist measures?
When Amazon set up shop in Canada they had to buy the books from Chapters because tbey weren't allowed to ship from the US.
To sell ebooks, they have to have deals with the local publishers and distribute those versions, not the US versions.

Hmmm... I seem to have memories of similar protectionism from the American side of the border. The American publishers would not allow wholesale importation of books from publishers in other countries. On occasion, I seem to remember trips to court in attempts to prevent individuals from importing textbooks though the result for one publisher after the Kirtsaeng decision was to increase their international prices to make importation less attractive.

As for Amazon being forced to buy the books from Chapters? As I recall, they were buying books from publishers who had the rights to the books in the Canadian market whether the publisher was located in Canada, the UK, USA or where ever else and only purchased from Chapters when the distributors were unable to fulfill their orders.

Oddly, Canadian booksellers have complained about for years about import restrictions. To quote an article in the Globe and Mail:

Canadian bookstores should be at liberty to import books from the United States or elsewhere, without being required to buy them by way of a Canadian-based book publisher as the distributor. The trade barrier that now exists, and which raises the prices of books for consumers, should be repealed.

As for protectionism? Donald Trump. 'Nuff said.

[John F]

Originally Posted by DNSB

...

As for protectionism? Donald Trump. 'Nuff said.

No political drive-bys, please.

[DNSB]

Originally Posted by JSWolf

That and the fact that Overdrive does not support the Kindle in Canada.

Have you looked into the reasons that Overdrive does not support the Kindle in Canada?

The local library consortium had two major reasons for not adding Kindle support and that was, simply enough, money and privacy. The cost of the Overdrive and Adobe infrastructure was high enough. Adding Kindle support was not in the budget. As for the privacy issue, at that time, an attempt to borrow a Kindle format ebook resulted in the patron being redirected to Amazon during the process. Hmmm... an outside company now has access to identify library patrons and track their borrowing habits.

This may have changed since I have not used a library that has Kindle titles to lend but among the staff members of local libraries is a FOI/Privacy officer (FOI refers to a provincial statute entitle Freedom of Information and Protection of Privacy Act). Basically, their job is to decide if the person/agency making the request can provide evidence that they have a valid subpoena, warrant or other court order compelling the library to disclose the personal information before disclosing any information that the patron has not consented to having disclosed.