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Indigo Would Make A Great First Partner for Barnes & Noble

You may have noticed today that the Waterstones-B&N rumors have made a resurgence. Today’s round of rumors doesn’t add anything that we hadn’t heard the last time around, and to be honest I think we ll pretty much assume them to be true.

But have you considered that Waterstones might not be the best choice for a first partner? I know it sounds crazy, but I think Indigo, the largest bookstore chain in Canada, might be a good alternative.

I’m sure you’re thinking that Indigo is involved with Kobo, so there’s no reason for them to go in a different direction. But Indigo also sold off their interest in Kobo a while ago, so now Kobo is only a partner like WH Smith, Whitcoulls, or Pearson Australia. (Indigo is probably also tied to Kobo by  contract, so this post is likely irrelevant. But that won’t stop me.)

Now, Kobo is said to be the dominant ebookstore in Canada, so one might assume that Indigo would want to stick with it. But have you considered how Kobo got that position? It’s not through looks or personality, but because Indigo was the largest Canadian bookstore chain. In store support adds a lot of value; just ask B&N. But it would add value to any device supported by Indigo, not just Kobo.

So if Indigo formed a partnership with B&N, there would be value in it for B&N, right? That seems like a good reason for B&N to try to recruit Indigo, if you ask me. At the very least, it puts Indigo in  position to negotiate a better deal with Rakuten – assuming B&N is interested, of course.

What’s more, B&N is already selling ebooks in Canada, so expanding to have a real presence up north would make sense.

On the other hand, I could see B&N expanding into Canada without Indigo as a partner. I’m sure that it would be nice to have a bookstore, yes, but B&N is already absent from a good chunk of the US anyways. And several of B&N’s current US retail partners also own chains in Canada, so negotiating new agreements wouldn’t be that difficult. Tech support also wouldn’t be that much of  problem; it would have to be online and phone but B&N already does that. The only major change would be the legally mandated support for French, but that is a minor issue.

In any case, I foresee Canada being B&N’s next market. They might even announce it at the same time as the Waterstone’s deal.

image by brewbooks

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Alexander Inglis January 31, 2012 um 11:25 am

Yah, well, anything is possible.

But Nook from Indigo? Not a chance. The Kobo sale contract would have precluded this and, had you taken a moment to surf to the Indigo online store you’d see Kobo is enbedded as the ebook vendor.

Kobo came to prominence in Canada not just because of Indigo’s backing but also because Amazon and B&N weren’t in the market. Until last summer, the only place to buy a Kindle in Canada was from — no bricks and mortar opportunity. B&N does not sell Nooks in Canada, even via online and, while some ebooks can be purchased, without a Nook very few know about that … and then they have to struggle with Nook DRM without access to a Nook. Sony simply priced itself out of the market during this period. Kobo had a very nice market — 33 million strong — to get a foothold in without competitors.

B&N certainly could land in Canada with Nook but they’ll have to make do without a major book chain. It’s a great brand and, assuming they treat the market seriously, they could do well. But they also don’t have rights to most video and magazine content that makes the Nook Tablet attractive meaning they’d likely stick to Nook Touch … a bit too little too late.

Given B&N’s challenging finances, I’d be less inclined to think they’ll make a move in the near term.

Nate Hoffelder January 31, 2012 um 1:20 pm

"Kobo is enbedded as the ebook vendor."

That is merely a matter of software, and it can be changed.

Doug February 3, 2012 um 1:11 pm

B&N faces some stiff problems from the Investment Canada Act, which regulates what non-Canadian bookstores (and related enterprises) can do in Canada. Amazon struggled with it for a decade, operating as a front for Canada Post, until they figured out that $20 million in the right places, and a few comforting words in support of Canadian authors, could get them an exemption.

Apple ignored the law and barged right in. But then, they don’t sell physical books. The Canadian government investigated Apple and came to the conclusion that Apple’s Canadian iBookstore was okay.

Hachette also ignored the law and began distributing books in Canada from US warehouses. Not too long afterward, Canada’s biggest book distributor, H. B. Fenn, went out of business, primarily because of Hachette. Oddly, the Canadian government took no action.

Maybe B&N just needs to go outlaw.

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