Defying the Amazon Monopoly, The Reading Room Raises $2.75 Million

While some mightxtrr_logo_strapline_570.png.pagespeed.ic.vzoalBzrfx[1] say that Amazon has a monopoly on the ebook market, not everyone would agree.

Take The Reading Room, for example.

This 4 year old book community and indie ebookstore raised a new round of financing in early November. Between new and existing investors, the startup now has $2.75 million in capital. They plan to use the funds to o drive membership, sign new commercial partnerships, and implement a range of site enhancements including curated content, recommendations and featured selections.

“The funds raised today will enable us to meet the growing demand for The Reading Room to be the online platform of choice for readers to discover new authors, classics and those hidden gems, and importantly to connect with other, like-minded readers,” said Kim Anderson, Chief Executive Officer, The Reading Room. “The Reading Room can now accelerate its expansion across the United States and North America.”

The Reading Room now boasts 650,000 members, all of whom enjoy sharing reading recommendations to help fellow readers to discover new books. In addition to the community, The Reading Room also sells ebooks and, as of 1 June, paper books. 75% of current members hale from NA, which has lead The Reading Room to set up new offices in NYC.

This might not seem like a very successful company, but I take a different lesson from it.

This is the one of the ebookstores that made me rethink any number of common assumptions about the ebook market. For example, many people say that Amazon prices ebooks so low that indies cannot compete. But clearly that’s not true otherwise The Reading Room would not have a thriving ebookstore or have picked up millions of dollars in capital investment.

I’ve also come to realize that the idea that low prices are the beginning and end of market success is simply not true; of course I’m not the only one who has figured that out (see indie bookstores).

TBH, it’s that whole “millions in investment” that makes me wonder just how impenetrable Amazon’s dominance really is. Clearly someone is willing to bet big that startups like Oyster, Zola Books, or Bilbary will grow into serious competitors.

Do you suppose they’re hoping for the next major ebookstore or for the small fry to grow large enough that they are gobbled up by Amazon?

PW

2 thoughts on “Defying the Amazon Monopoly, The Reading Room Raises $2.75 Million

  1. I don’t think Amazon has a monopoly, especially not if you look internationally. They do have a huge chunk of the US ebook market. But to compete, you need something– a website with a lot of traffic, a killer piece of hardware, a huge selection– something! It doesn’t sound like The Reading Room has any kind of leg up in the ebook market.

  2. As a consumer, it’s not about the pricing (although being cheaper – which Amazon isn’t always, now that the Apple cartel agreement has been shut down, and definitely wasn’t always in the pre-Apple days – certainly doesn’t *hurt*). It’s about the *service*.

    Consider:

    1) I bought a book from Amazon, started reading it, and quickly discovered it was a truly awful quicky OCR job, multiple errors on every page, and virtually unreadable. One email to Amazon later and I was issued a full refund, no muss, no fuss, the credit showed up on my Visa statement a few days later.

    2) I bought a book from Sony’s Reader Store. The book they actually delivered wasn’t the book I’d bought (some kind of SNAFU on the back end, I suspect). Two months, a dozen emails, and four phone calls later they grudgingly extended a partial refund. In store credit. Last time I looked, they’re still selling the wrong book, two years later.

    3) When B&N shut down Fictionwise they sent out emails saying that (most of) the books bought from FW would be automagically transferred to B&N accounts. Mine weren’t, despite following their instructions for the move exactly. They never answered any of my emails asking about this, so all the books I bought from FW are gone (or would be if I hadn’t disinfected the DRM and kept local backups).

    Which of those three stores do you think gets the lion’s share of my business these days?

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