What the Failure of REDgroup Means for Ebooks in Australia


by - February 21st, 2011


Anyone who follows book news cannot have failed to hear about the collapse of REDgroup’s Borders and Angus & Robertson bookchains last week. But what does this mean for ebooks? Depending on who you listen to ebooks are one of the causes of REDgroup’s slide into administration. But is this true? Are ebooks destroying the common dead tree bookseller? And did video kill the radio star? Read on to find out more.

For those who don’t know, Kobo is a Canadian ebook platform that partnered with Borders in the United States, and Borders/A&R in Australia. As I said back at Christmas, it may not have been the brightest move on Kobo’s part to tie themselves so closely to Borders, but they did. And that means that even though Kobo is not REDgroup, they will suffer some of the consequences of the collapse, including the withdrawal of books by some publishers from their joint library.

Although I’ve complained about the Kobo ereader and their flaky platform before, they were the only real competitor to Amazon’s Kindle ecosystem and Apple’s iBookstore. They were unique in Australia because their partnership with Borders brought them mainstream, nationwide legitimacy and a physical retail presence – something neither Apple nor Amazon can compete with. From all reports this partnership has been relatively successful – it was one of the few areas of their business that REDgroup wasn’t entirely bungling. This is part of the reason why ebooks cannot be blamed for the collapse: like it or not ebooks are still only about 1% of the industry here in Australia – and REDgroup had already carved themselves a healthy chunk of that 1%. While that number is growing very fast, ebooks are not putting booksellers out of business just yet.

No, what destroyed REDgroup was incompetence and greed. While various pundits have tried to blame parallel importation, the GST, and even the internet as a whole – the fact of the matter is that REDgroup are the only Australian bookseller currently under administration. And while plenty of booksellers are struggling, they haven’t had fraught relationships with suppliers for the last twelve months, and they haven’t been jacking the prices of their books up over RRP. And they haven’t been selling barbecues instead of books.

Regardless of the outcome of REDgroup’s period under administration, the Borders brand has been seriously tarnished by this collapse, and that’s only going to get worse with issues like the recent decision not to honour customer book vouchers. You can safely predict that Kobo’s ascendancy in Australia will be slowed for a while to come.

So where does that leave ebook buyers and readers? Or rather – where does it leave readers who don’t want to submit to the Amazon or Apple gulag platforms? Well, with the recent news that Google are looking to partner with groups of retailers rather than individual booksellers, things on the indie front appear to look a bit bleak. But it’s not all doom and gloom. The annual post-Christmas survey in Bookseller+Publisher demonstrated that while the dead tree book industry is trembling under the threat of a shrinking market – ebook readers and ebook sales are healthy and growing. Not only that, but 40% of booksellers not already selling ebooks are planning to do so in the next year. This is great news for readers – with the freeze of Borders/Kobo, there is a lot of room for new growth. And new growth in books can only be a good thing.

As a culture, we’re currently undergoing one of the largest paradigm shifts in cultural consumption ever. It is now more than any other time that we cannot afford to have dead weight like REDgroup dragging the rest of us down. So I say the king is dead – long live the king.


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Joel Naoum (113 Posts)

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