The Korea Publishers Society called on Kyobo to immediately stop its e-book service as it is feared to hurt the publishing industry.
What is Kyobo? Kyobo Book Center, the biggest bookstore chain in Korea, has just launched a subscription-based e-book service called ‘Sam’. Their current e-book sales approximately worth about 14 billion KRW, accounting for only 3% of its total book sales. Most of the sales are made through offline chains across the nation. Kyobo plans to attract 130,000 Sam members with its new e-book service in 2013.
Will this undercut smaller rivals in the e-book market? The market is still fairly embryonic in Korea, and with an e-book service offers 1 or 2 year membership (the users will be able to read certain numbers of books every month) that runs on Androids, it will be interesting to see the leading offline bookseller kickstart the dormant e-book market.
Also, Kyobo provides customized book recommendations to its readers based on their past selections and keeps a record of the books the members read. Additionally, Kyobo has a multiplatform strategy, meaning that the readers can use their own smartphones, tablets, and laptops to read their Sam titles.
The Korean market is currently 'infested' in copyright protections and pricing issues, and previously, mainstream readers were not very enthusiastic either. Samsung Electronics teamed up with Kyobo to infuse energy into the market by launching a joint e-book reader, but they weren't a huge success.
Under the Sam plan however, the readers will be able to read up to 5 books for a fee of 15,000 KRW (approx. 15 USD). Bundled package of e-books may potentially lure bookworms if a discount is provided, and other pricing options are also available. Currently, Kyobo’s pricing is approximately 3,000 KRW for a single book. This is way lower than average e-book titles provided by other rivals and this is seen as 'too agressive' for smaller e-book vendors.
Kyobo on the other hand argued that there will not be any serious threats to smaller players. Their position is that the reasonable price of their Sam service will actually increase the Korean reading population. They have already set up special pop-up zones at Kyobo Book Centers.
According to Arirang, the Korean e-book market grew exponentially in 2012, compared to the year before that - the market grew more than five times during that time period. In 2010, it was worth 10 billion KRW (approx. 9 million USD) and the figure rose to 45 million USD in 2011.
This year will see the market boom - will Kyobo take all the potential e-book readers? How will this affect the startup industry? What do you think?