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Lessons Learned from the Closure of Sony Reader Store

Posted on 2014-Feb-08

by BB eBooks Staff


Before I start writing this blog entry, I am so thankful of the peaceful atmosphere in our neighborhood that does not get in the way of my concentrated blog reading. The construction workers nearby temporarily halt their earth-shattering work schedule today to take a break for the entire day and our staff are so focused on their hectic eBook production. In addition, it is equally important that most of the blogs I have read this morning piece together why only the strongest will survive in the business competition.

The Closure of Sony Reader Store


The headline has been inevitable for some time: the forthcoming closure of Sony Reader Store in the U.S. and Canada will be in effect in a few months. Sony has been around in the eBook business for a long time (since 2006_. The opening date of the store came later in 2009 according to its official announcement of the new store name, new format support, and the new software to read digital content.

Despite its expansion into several international markets, Sony decided not to release its latest eReader PRS-T3 to US market and cited “the region’s market changes.” In fact, an article dated 2008 by Financial Times foreshadowed the struggle and obstacles Sony had faced to compete with its competitors: Apple in its previous Walkman product line and Amazon in the eReader business. While Sony planned to execute its critical move, Amazon had already outsold the devices regardless of the fact that Sony should have gained the upper hand launching its Reader way back in 2006, one year before the Kindle’s release.

The Migration to Kobo

To eliminate possible disruption that might affect the owners’ purchases of eBooks on the Reader Store, Sony made an announcement on their blog to select Kobo as its eBookstore and to transfer their customers’ libraries to Kobo so they will not lose access to their catalog. Until March 20, customers can transfer their purchased eBooks and any credits to a Kobo account. They can also use Sony Reader to read eBooks and shop from Kobo where there are more than 4 million eBooks in several categories.

Smashwords’ Instruction and Reflection

For authors who distribute their work via Smashwords, Mark Coker expresses his emotional farewell to the long-term retailer that was “one of the first two major retailers” that partnered with Smashwords who believed in his business back at the same time of the store launch. In a way, they grew up leaning on each other for support and distribution. As much as words cannot express how Sony’s partner with Smashwords means to Mark, it is undeniable that the market share within the store has become the tiny fraction of 2%.

After the closing date, eBooks that have been distributed will be inaccessible so customers are encouraged to back up or transfer their purchases to Kobo. Authors should not fret in this sense that readers can still enjoy reading your work. Nevertheless, Sony eBook files will not be automatically transferred from Sony to Kobo’s servers. To make sure fans can still access their Sony-purchased eBook in the Kobo store smoothly, Smashwords authors should opt into Kobo through their Dashboard setting because Kobo will use the same ISBNs of the eBooks that Smashwords or Sony has provided to identify the eBooks that have been purchased by customers (note: Kobo distribution is enabled by default at Smashwords).

Mark contributes his knowledge and experience to voicing why Sony went wrong in terms of business operation. Fierce competition from all sides could be one of the deciding factors that render Sony unable to keep up with the challenge to launch killer devices and preserve the ultimate showroom experience. Judging from the flat sales, Mark reveals how other stores have grown in the reversing trend “by multiples.” Amazon’s deadly price-matching seems to nullify the competition in terms of price. Unlike Apple, B&N, and Kobo, Sony’s inflexibility to price-match resulted in many authors opting out of Sony. Mark continues to elaborate how Amazon’s price-matching strategy works especially well through their KDP program. “They [Amazon] know how to litter the stage with land mines (constructed of policies and consequences) in plain view and then wait for their competitors (be they retailers or Big 5 publishers) to step on them,” Mark claims yet poignantly deduces Sony’s responsibility to be the root cause of its closure. In the last bit of his analysis, he trusts in the diversity of retailers for the sake of authors’ benefits that can empower readers to develop bargaining power over retailers. In his own words: “Diversification is good. Concentrated risk is bad.”

Amazon Publishing

In the previous paragraph where Amazon’s price-matching and KDP are criticized openly, it seems Amazon Publishing (A-Pub) is erased from the business equation but not for long. A Forbes article written by the thick-bearded Jeremy Greenfield explains why A-Pub does not sit still watching the big 5 taking over the best-seller list right at their home. Although the publishing arm is not frequently seen as a serious threat to traditional publishers whose combination of best sellers usually triumph Amazon-backed titles online and offline, its most recent best sellers are roaring loudly.

Amazon Publishing had a bumpy ride building its reputation when poor sales and negative criticism following by the departure of its leader heightens the fragile image of a publisher that has not scored big. Yet, the home-grown bestselling titles tend to show light at the end of the tunnel. This week saw titles published by Thomas & Mercer (mysteries, thrillers, and suspense), Montlake Romance (romance), Amazon Publishing (nonfiction, memoirs, and general fiction), and 47North (sci-Fi, fantasy, and horror) walking the red carpet on the Top 25 in Kindle Store. Although these are the indicators of the imprints’ digital success in digital distribution, these titles have not entered the New York Times list probably because “eBooks available exclusively from a single vendor will be tracked at a future date” according to its full explanation of methodology. It seems nothing has changed much since 2012 as Jude Hardin commented on Joe Konrath’s blog regarding his eBook self-published on Amazon being excluded from the list despite its eminent sales.

Indie Author’s Wild Card


From the business point of view, the downfall has been written in many places since Sony Reader Store began its operation. The fierce competition of the eBook business forces retailers to keep up with the game where devices and content price have become selling points to win the favor of readers. Sony’s smooth transfer to Kobo will be put to test in a few weeks before its official close date. For authors who distribute their works to Sony via Smashwords, it seems there is nothing much to worry about unlike Mark Coker’s writing piece that encourages the diversification of retailers and calls for authors’ bargaining power to negotiate for their best interest. To wrap up the blog, it is interesting to see how A-Pub makes its name not through the number of their new imprints, but by the sales of their independent authors. While no one knows what the future holds, indie authors have a much better reason to go solo or work with the publisher they can trust in order to beat the best seller lists. Have a nice weekend!

Label: eBook Industry News

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