Rakuten Buys OverDrive

[library addict]

Rakuten buying eBook firm OverDrive for $410 million in U.S. push

(Reuters) - Japanese online retailer Rakuten Inc (4755.T) is buying U.S. eBook company OverDrive Inc for about $410 million, deepening its push into the U.S. market and into the "sharing economy".

Rakuten's announcement on Thursday about the OverDrive deal comes a week after it led a $530 million funding round for U.S ride-sharing service Lyft, signaling Rakuten's shift in focus towards more-rental based businesses.

The acquisition of OverDrive, which currently offers eBook rental services to U.S. libraries and schools, is expected to be completed in April. It will push Rakuten's eBook business EBITDA (earnings before interest, tax, depreciation and amortization) for 2015 closer to profit, the company said in a statement.

"OverDrive can be described as a 'sharing economy' business as it shares books," Takahito Aiki, head of Rakuten's global eBook business, told reporters.

Aiki said that Kobo Inc, a Canadian eBook company Rakuten bought in 2011 for $315 million, is "phase 1" of its eBook business as it allows consumers to buy eBooks. As part of "phase 2," OverDrive will allow libraries and schools to rent eBooks, he said.

Another reason for the purchase is the firm's aggressive drive into the U.S. market, Aiki said.

Rakuten has been on a buying spree in recent years to reduce reliance on its home market. In October it bought U.S. discount store Ebates.com for about $1 billion.

(Editing by Sunil Nair and Muralikumar Anantharaman)

from Reuters


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[thewitt]

I wonder if they will link Kobo eBooks to OverDrive automatically.

[tubemonkey]

I wonder how they'll deal with Kindle.

[Soldim]

That sound good for customers, two big eReader platforms with access to a large amount of content is better than having only amazon for sure.

[Barcey]

Interesting quote

Aiki said that Kobo Inc, a Canadian eBook company Rakuten bought in 2011 for $315 million, is "phase 1" of its eBook business as it allows consumers to buy eBooks. As part of "phase 2," OverDrive will allow libraries and schools to rent eBooks, he said.

... but wait, I thought we weren't buying ebooks, it was only a license so it's really just a rental.

[eschwartz]

Not a good idea... this gives excellent incentive for them to link the two together and banish Amazon. Leaving we Kindle owners entirely out in the cold.

[DNSB]

Originally Posted by tubemonkey

I wonder how they'll deal with Kindle.

Hmmm... Given that in the US, Overdrive already supports Kindle, I'd suspect that Rakuten is not going to make any changes.

[DNSB]

Originally Posted by eschwartz

Not a good idea... this gives excellent incentive for them to link the two together and banish Amazon. Leaving we Kindle owners entirely out in the cold.

Only in the US. Here in BC, Canada, Kindle owners are already out in the cold when it comes to library books. Epub and PDF are the only two formats that seem to be supported for ereaders.

[EndlessWaves]

Originally Posted by DNSB

Only in the US. Here in BC, Canada, Kindle owners are already out in the cold when it comes to library books. Epub and PDF are the only two formats that seem to be supported for ereaders.

Yup, same in the UK.

Here Kindle is a closed ecosystem with no support for the majority of eBook stores or libraries. I'd be more worried about Rakuten trying to emulate Amazon and making Kobo into a similarly closed system.

[Phogg]

Calibre,

No need for panic.

[tubemonkey]

Originally Posted by Phogg

Calibre,

No need for panic.

Not for library books.

[BobC]

Oddly I see that Rakuten is now branding its Play.com site as Rakuten.co.uk here in the UK. The odd thing is they don't seem to be selling Kobo readers through the site.

BobC

[fjtorres]

Originally Posted by BobC

Oddly I see that Rakuten is now branding its Play.com site as Rakuten.co.uk here in the UK. The odd thing is they don't seem to be selling Kobo readers through the site.

BobC

They don't promote them in the US, either.

[eschwartz]

Originally Posted by DNSB

Only in the US. Here in BC, Canada, Kindle owners are already out in the cold when it comes to library books. Epub and PDF are the only two formats that seem to be supported for ereaders.

Err... I know???

Wait, you do realize I put the word "entirely" in there for some kind of actual reason, yes?

On account of... "entirely" implies that before it was "partially"?

(And because there are plenty of people who get/got paid library cards for US libraries.)

[DNSB]

Originally Posted by eschwartz

Err... I know???

Wait, you do realize I put the word "entirely" in there for some kind of actual reason, yes?

On account of... "entirely" implies that before it was "partially"?

(And because there are plenty of people who get/got paid library cards for US libraries.)

Yes, I did note the "entirely". Personally, my feeling is that Apprentice Alf and Calibre make that "entirely" hard to accept at this time. Not to mention that the majority of ebooks are read on non-eInk readers -- Android, iOS and Windows tablets are pretty much agnostic when it comes to ebook format and tablets of whatever flavour are the reading platform for the vast majority (last numbers I saw was that eInk ereaders were about 9% of the ereading market).

OTOH, I have a tendency to believe in profit being the motive driving most corporations. If Overdrive was making a profit supplying Kindle format ebooks to libraries in the USA, I can't see Rakuten changing that without a compelling reason given the American ereader market is dominated by Amazon.

OYAH, I find the tendency of denizens of the USA to believe they inhabit the center of the universe to be humourous. Recent example was a review of ereaders where 4 Amazon Kindle and 3 B&N Nook devices were the only entries in the eInk segment.

Of course, just because you're paranoid, it doesn't mean they aren't out to get you...