Thursday, February 6, 2014
Farewell Sony Reader Store
Sony today announced the imminent closure of its Sony Reader Store in the US and Canada. The store will remain in operation until March 20, after which it will cease ebook sales.
Effective immediately, Smashwords will cease delivery of new titles to Sony. We will continue to deliver metadata updates and takedowns, and Sony will continue to process them.
What this means for authors: Any time any retailer closes - especially one such as Sony who pioneered the ebook market - it's a sad day. Along with Barnes & Noble, Sony was one of the first two major retailers to embrace self-published ebooks when Sony partnered with Smashwords in 2009. Sony's devices and ebook store predated Amazon's, so when the history books of the indie author revolution are written I hope historians give Sony the credit they deserve as a true pioneer. My sentiments and appreciation for Sony and their awesome people aside, the impact on Smashwords authors today will be minimal. The Sony store, as most authors know, is one of the smaller retailers in the Smashwords distribution network. To put this in perspective, on a typical month, less than 2% of our authors' monthly sales come from Sony.
Next steps for Sony customers (updated): Kobo, a Smashwords partner, will assume control over Sony's customers relationships, giving most Sony customers the option to migrate their Sony libraries into their Kobo library to maintain access to their books. Note that the Sony book files will not transfer from Sony's servers to Kobo's servers. Kobo will use the ISBNs (unique digital identifiers) of the Smashwords/Sony books to map the customer's purchase to the same book at Kobo. Kobo has created a helpful FAQ page to assist Sony customers in the transition at http://www.kobo.com/sony Sony has created a similar page of instructions at http://blog.sony.com/2014/02/the-future-of-reader-store/ If Smashwords books have been purchased by Sony customers, and those books aren't currently distributed and onsale at Kobo, then those books will not transfer. Authors can mitigate this customer inconvenience by ensuring all their Smashwords Premium Catalog books are opted into Kobo. Since Smashwords distributes to Kobo under a separate agreement, the book product listings at Sony will not transfer to Kobo. For Sony customers, the migration to Kobo is optional. Even if Sony customers choose not to migrate to Kobo, they can download previously purchased books from the Sony Reader Store until April 30, 2014. However, if Sony customers transfer their library to Kobo via the transfer link, they will continue to have access to their ebooks after this date, assuming those same books are available for sale at Kobo.
What led to the Sony closure? One can only speculate, but the bottom line in my opinion is competitive pressure from all sides - from device-makers, tablet-makers and other stores, and Sony's inability to remain competitive in the fast-evolving ebook device and retailing spaces. Although they pioneered the ebook industry, the industry grew up around them and grew faster than them. Our sales levels at Sony over the last four years have remained relatively flat, whereas our sales at other retailers have grown by multiples. Another contributor: Amazon price matching. As many Smashwords authors know, Smashwords and our retailers Apple, Barnes & Noble and Kobo have dramatically improved our ability to quickly and accurately load Smashwords titles and metadata updates. Sony's integration systems, although they have improved over the years, by comparison have not evolved at the same rapid rate as its competitors. Over the last few years, this led to frequent price matching from Amazon, and a lot of author frustration, which led many bestselling Smashwords authors to opt out of Sony entirely. Price matching is a blunt force weapon that Amazon wields with impunity. Amazon knows its price-matching practices place immense pressure on its competitors. Here's how: If Amazon finds a KDP book priced lower elsewhere, it price-matches to the lower price. If you're enrolled in KDP Select, or enrolled in the 70% royalty rate, this price disparity situation puts you in direct violation of Amazon's terms of service, which leads to a threatening email from Amazon notifying the author of the violation and the consequences of such violation. Amazon punishes the author with full knowledge that the price discrepancies are not the author's fault, and then authors feel pressured to abandon the smaller retailer rather than risk facing Amazon's future wrath. The behavior this motivates (opting out of the smaller retailer forever) then harms the smaller retailer and makes the author more dependent upon Amazon. Amazon has always been brilliant in this regard. They 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. "Oh, didn't you see the big warning sign in your contract?" But without question, it would be unfair and inaccurate to claim Amazon or indie authors killed Sony. Amazon's price matching represented only one of many competitive pressures that set the stage for this. Ultimately, in the cruel and unforgiving competitive world we live in, the responsibility is Sony's alone.
What this means for the industry: Any time we lose a retailer of any kind - whether ebook retailer or neighborhood bricks & mortar retailer - it's a sad day. Book culture, and book sales opportunity for authors, is maximized by having as many booksellers as possible employing as many passionate booklovers as possible out there dedicating their every day to connecting books with readers. The more retailers there are, the less dependent the author becomes on any one single retailer. Diversification is good. Concentrated risk is bad. It would be a sad day if five years from now 95% of ebook sales consolidated around one or two retailers. Such a state of affairs would strip indie authors of their independence and power. So although the loss of Sony is inconsequential from an author sales perspective, it provides a cautionary reminder that it's in every author's best interest to foster a diverse and thriving ecosystem of multiple ebook retailers. Ultimately, the retailers that indie authors support and promote are the ones that will survive and thrive in the future.
Farewell Sony. I wish our friends at Sony the best and trust their dedicated team members will find new opportunities to participate in the ebook revolution they helped create. I'm so appreciative of the amazing support they provided Smashwords authors over the last five years.