Wednesday, November 09, 2011

Indigo cashes out of Kobo; CEO Reisman says Indigo will continue innovative changes

Magazine publishers must look with wonder, and a certain amount of dread, on the $315 million deal by Indigo Books & Music to sell its 44% share in e-reader Kobo to Japanese e-commerce firm Rakuten. Thereby, Indigo makes a tidy return on its initial investment in the business, but gets out before the necessity for $100 million plus in capital that would be required to continue to play against large, global participants, according to an interview by Jordan Timm of Canadian Business with CEO Heather Reisman and Kobo CEO Michael Serbinis.
The dread may be because Reisman makes it even more clear that Indigo is moving away from the print-on-paper business to be some other sort of business altogether. 
While publishers continue to rely on Indigo for its dominance in the single copy sales business, Reisman's thoughts clearly continue to be elsewhere and that can't be good.
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. We caught the wave on e-reading and had a tremendous success with Kobo. I see Indigo as that kind of innovative platform, and we'll do it again.
Whether that innovation includes, or squeezes out, the newsstand is something that will be of very real concern to magazine publishers. Indigo's trajectory over the past two decades was to decimate the independent and small chain bookstore sector; it is no longer there to backstop the magazine single copy business when (if?) Indigo loses interest.

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Anonymous Courtney said...

This article fully reinforces the fact that I really do not like Heather Reisman. First Chapters and Indigo dominated the market, and as a result also caused numerous independent bookstores to close (as well as the newstands), now it's becoming a place where it's getting harder and harder to find a good book at when I want it.

8:46 am  
Anonymous Anonymous said...

Now if we can get magazine publishers to innovate like Indigo instead of their head in the sand with obsolete business models would be a plus. It all comes down to leadership.

9:52 am  
Anonymous Anonymous said...

tru dat

6:10 pm  
Anonymous Doctor Flarb said...

If Magazine sales were up (or at least even) with last year's sales there wouldn't be any concern, but Magazine sales are down (in my store at least), and if they continue to drop then don't be surprised if there is a change. As much as I love my Magazine Department there's a point where even I can't justify stocking 400 feet of mostly dead inventory.

1:18 am  

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