There's an old adage in economics that a period of consolidation usually follows a period of rapid expansion. No one would argue that digital publishing just went through a 7 year period with many new startups launched, and after today I think it is clear the industry is entering a period of consolidation.
Following the merger of Feedbooks and Aldiko (and the Dropbox acquisition of Readmill in March), Blurb has announced that they are acquiring the ebook distribution platform Graphicly. The terms of the deal have not been disclosed, but Micah Baldwin told TechCrunch that the outcome “was a positive one for everybody” financially.
Graphicly was a leading independent distributor of graphic novels and other image heavy works, offering an automated conversion service which late last year was expanded to include regular ebooks as well. Blurb is a POD service which specializes in coffee table books, magazines, and similar content, in both print and digital. I don't think anyone is puzzled by this acquisition.
With 2 million creators and nearly 10 million titles distributed, Blurb dwarfed Grphicly, which had around 10,000 publishers on its platform who had distributed some 20,000 titles. Blurb is expected to generate around $100 million in revenue this year.
This is an acqui-hire, with the six employees who formed Graphicly joining Blurb. As part of that process, Graphicly's existing platform will be shutting down, with the lights to be turned off in about a month. Also, Blurb will be shutting down over the next 30 days as its new staff integrates the newly acquired technology into Blurb.
“None of the assets per se are coming over, but we are talking to publishers who were on Graphicly,” says Baldwin. “We are hopeful that Graphicly users will take their content and manage it with Blurb, and maybe print their books there, too.”
Graphicly, founded in 2009, had raised some $7 million since 2010, and the company had been showing some signs of financial issues of late. Last year Micah Baldwin, the founder of Graphicly, stepped down from his position as CEO. The new CEO then expanded Graphicly's services to include distribution of text-based ebooks (as opposed to image and graphics-heavy works like digital comics, cookbooks, and so on). There have also been rumors that Graphicly had been in acquisition talk with a number of potential buyers, though it's not known who was approached.
Graphicly is Blurb's second acquisition in the past month; a few weeks ago Blurb acquired MagCloud, one of HP's digital publishing platforms, from HP.