Kobo Takes Over Sony's North American eBook Business

Today, two days after Takahito Aiki, took over the reins as CEO of Kobo, he has announced the effective consolidation of the Sony ebook business under Kobo in North America. It is almost certain that this is the final and long overdue retreat of Sony from a market that they expected to win and sadly lost from beginning. It also sends a strong signal to the market that the dominance of Amazon in this sector is real and is giving even those with potential credentials and market presence a hard time.

Sony entered the market some 8 years ago with huge fanfare, fancy ebook readers based on eink and were the early adopter and major driver and influencer on Adobe’s ACS4 DRM service. I remember meeting their senior players once in San Deigo and listening to how they were going to dominate the academic and educational markets. But their offer and market understanding was always someway behind their words. It’s also somewhat ironic that this death knell has occurred at the same time that Adobe has also gone through the PR mangle and has had to retract so publicly on their ACS5 statements.

So we have Sony ready to preinstall Kobo on its smartphones , laptops and other devices and to hand over their customers and business to Rakuten  and its Canadian ebook subsidiary Kobo. It’s also interesting as it comes at a time when devices matter little and the platform is what counts. How smooth the takeover will be for those who backed Sony and bought their devices and ebooks remains to be seen, but transferring encrypted DRM licences is not always as easy as you would expect. All this is without considering how they are going to deal with those Sony BBeb licences.

Some accept that Sony has been facing many challenges across its business and they may still come back, but with many bases to cover this seems highly unlikely.

So we read the usual hype and words on what this means, and how it is going to make the difference, but the reality is that another door is shutting and real consolidation is happening. The obvious next candidate is Nook, which on the face of it would be destined for Microsoft, the discussion on this are already in play as Barnes and Noble grapple with the same issues and facts of life. Now if we just look at the North American market at a potential combination of Nook, Kobo and Sony that would certainly give Apple a challenge and wake them up from their apparent complacency. This sort of consolidation works best in the established and dominant North American market where it can be honed before it goes global.

So what’s the betting on Nook going somewhere soon?

Sony to finally bury BBeb

The news that Sony are to scrap their proprietary BBeB format and focus on epub, is both good news and long overdue. It begs the question why they ever thought that their format was ever going to cut it and like many Sony formats before them has proved a bridge too far.We have never been asked to provide the BBeB format.

In adopting Adobe’s ACS4 digital rights management Sony were the first to embrace epub with encrypted protection and also Adobe ebooks which are also fully compatible with ACS4 and the Sony Reader.

It is easy to see both these formats, one PDF based and the other XML, being the dominate formats outside of fortress Kindle. Many of the ‘lookie likie’ eink readers are now openly adopting ACS4 which whilst DRM is still the requirement is the key to providing secure open files that are interoperable between devices.

We presume that Sony will offer customers who have BBeB files a migration in their announcement.

So who still has a Betamax Player?

So one year after all the hype we now find ourselves reading about another reincarnation. The new PRS505 Sony reader models are now available in either silver or blue and come with a 100 credits to be redeemed against classic titles. But lets get real the colour isn’t going to do it and neither are 100 classics.

The Readers have the capability to support text files, RTF, Adobe PDF documents, and allow users to convert Word docs for use on the Reader using software on their PCs. They can hold 160 books in their internal memory—with more storage available via memory cards and offer a battery life equal to about 7,500 page turns. It sells for around $300.

So what is the problem or should that read problems?

It’s a one trick pony. At a time when convergence is the word, Sony want us to buy a single use device. The price is still not attractive enough to make this a worthwhile gamble and who wants to be a the cutting edge when you know its not the answer.

It lacks iconic design and a market ‘want one’ fashion presence. The reader even with a new coloured shell is as appealing as those three wheeled scooters – great if you are a convert but not if you aren’t.

There isn’t the content in their proprietary BBeB DRM format and frankly why should there be. You would have thought they of all people would have learnt this lesson by now.

Who is their audience? The professional who needs lots of documents on a reader? Sorry they have notebooks, PDAs and other mobile devices that do this and more. The student who needs reference materials on hand? They can’t afford the luxury and even if they could their material is increasingly online, tied to applications and not in BBeB format. The young technophile? Sorry this is not a cool device and doesn’t play music, videos or games. The older reader who may actually want 100 classics? They are technology sensitive and aware of transient technology and the price isn’t right here too.

Imagine owning a formula 1 racing car but having no race track to drive it on, or owning a hybrid car which runs on special fuel that is on sold in a handful of garages. Being the only one in town and having very limited capability to use it is not a recipe for mass adoption. You need to trigger the demand and have the infrastructure to support it. Who, apart from a few sad executives tryingto impress, would buy a Sony Reader today?

Forget the technology, forget the inter-galactic sonybookstore - where is the book content, where is the market demand? Buying the Sony reader would be like buying a betamax machine just as the VHS camera is coming out. Sony has a brilliant track record of innovation, but also an unenviable track record of getting it wrong and misunderstanding market forces.

Roll on next year's model.