Tesco, the UK’s largest retailer is squaring up to Amazon with the purchase of Mobcast, an e-book provider.
Mobcast was co-founded in 2007 by CEO Tony Lynch and former special forces unit SAS (Special Air Service) man Andy McNab. McNab is the author of action books such as Bravo Two Zero, Heat and Last Night Another Soldier.
Mobcast provides a digital book retail platform with a catalogue of more than 130,000 of the UK’s most popular titles which can be bought and read on smartphones, tablets and e-readers.
Additionally Mobcast offers a cloud-based service that lets customers build up an eBook library collection without being locked-in to one single device.
Reading your book on the device you choose gives flexibility and a great value-add to Mobcast’s offering. Storing the book in the cloud gives you the device flexibility you want.
“As an author I always thought the ability to carry your library around and read on all your personal devices would be a huge benefit to all. We have developed a product that makes this possible, and being acquired by Tesco ensures that this original vision will be available to as many people as possible.”
It is a good move for Tesco. Amazon sells 114 ebooks for every 100 hardback and paperback books it sells through the web.
The acquisition further strengthens and expands Tesco’s digital entertainment offering, following its acquisition of an 80 per cent stake in movie and TV streaming service blinkbox in 2011. In June 2012 it acquired personalised internet radio service WE7 for £10.8 million.
WE7 is a UK based music streaming site which allows users to create personalised radio stations. Blinkbox gives customers the latest release blockbuster movies to watch instantly, without subscription, the same day as DVD. The service is available on PC, games consoles, tablet and Smart TV.
Tesco has been selling paper copies of McNab’s books in its stores so this seems like a natural extension into the ebook market which is expected to grow year on year.
The U.K. Publishers Association reported in its May press release:
Digital sales grew by 54%. ebooks, audio book downloads and online subscriptions accounted for 8% of the total invoiced value of sales of books in 2011, up from 5% in 2010. Consumer ebook sales are now equivalent to 6% of consumer physical book sales by value whilst 13% of academic and professional book revenues came from digital products.
Tesco paid £4.5 million (around $7.2 million) for Mobcast making McNab almost £1 million richer after the deal. It already sells the Amazon Kindle and is one of the UK’s largest booksellers.
With Amazon's current hold of the ebook and ebook reader market it will be interesting to see if the cloud portability offered by Mobcast will start to part readers from their Kindle, or will Kindle's screen clarity and ease of use keep its customers loyal.