When Bilbary burst on to the digital publishing scene in late 2011 it got a lot of attention for its novel ideas, including plans for a rental ebook platform. Sadly, it now seems novel ideas were all the company had going for it, which could explain why the company quietly went bankrupt earlier this year.
The Bookseller reported today that Bilbary, once the shining light of indie ebook startups, is out of business. The company actually shut down in May or June of this year, but it wasn't until last week that someone noticed it was gone. (Andrew Rhomberg of JellyBooks gets credit for that.)
Bilbary had been shedding senior management since at least March of this year, and they had been shedding real estate since last September, when they closed their London office.
The company had raised around 2 million pounds in its early days, but was not able to either generate enough revenue to support itself or enough growth or forward momentum to interest investors and soon ran out of money.
As the old saying goes, the main reason startups die is that someone launched them in the first place.
But if you ask Bilbary founder Tim Coates, Bilbary was caught between Amazon and publishers. Coates told The Bookseller: "The dispute between Amazon and publishers on e-book pricing [and the agency model] makes it impossible to invest. We are in a situation where investors are terrified of risking a new venture because no-one knows what the pricing structure will be. As long as the argument has been going on, any investor says, 'What is the pricing model?' and you can't answer them. Bilbary was caught in the crossfire from the industry dispute and we weren't alone."
I think that explanation is nonsense; the truth is a lot more complex and less palatable. The fact of the matter is, the odds are stacked against publishing industry startups in the first place.
I haven't had a reason to report on it much, but I tend to listen when people like Andrew Rhomberg of JellyBooks and Micah Bowers of Bluefire talk on Twitter about the resistance they have faced in getting the major publishers, all of whom are very conservative, to try some thing new. (This is to some degree confirmed in the administrator's report.)
For example, Bilbary originally launched in very late 2011 with the idea of offering an ebook rental service. This fell through when none of the majors went for the idea - a detail which Tim Coates should have been able to predict based on his years as the managing director of the UK bookstore chain Waterstones.
The problems publishing startups have encountered help explain why, for example, Booklamp sold out to Apple and Readmill sold out to Dropbox. it's not just that the tech companies had the money; they were also willing to spend it.
But I am not sure that it would explain Bilbary. I have my own sources on this story, but I was asked not to share the details about financial mismanagement.
But I can share that I was told that Tim Coates bailed on Bilbary months before the company shuttered. He'd already registered his new startup, Freckles, in March without telling anyone else at Bilbary.
According to Coates, Freckles is going to focus on the library ebook market:
What I've suggested is we bridge that gap between publishers and libraries – and the place to bridge it is the library management system. If a publisher produces a print book, it goes to Baker & Taylor, to YBP, to Ebrary – and then the information is placed on a library management system, a catalogue. The reader looks at the catalogue and says, 'Ah, they have this book.' What I suggest is that with e-books, you don't have to do that, you can take the complete output of publishers and place it on the catalogue and readers can make the choice. There's no reason why every library can't offer every e-book in the world.
In short, Freckles is going to compete with OverDrive. Considering that this is one of the things Bilbary tried and failed to do, I'm not sure that Freckles will have much greater success.
On the one side Freckles will still have to work with publishers, while on the other side they will have to compete with OD, a company with deep pockets and the demonstrated ability to adapt to offer the same services as their competitors.