Editor's update: We're pleased to announce that Vincenzo Russi, chief digital officer of Messaggerie Italiane, and Klaus Renkl, international business development for Deutsche Telekom, Product & Innovation, will join us at The FutureBook Conference (#FutureBook14) on 14th November, on a panel chaired by our Bookseller colleague Lisa Campbell on The Future of Content Retailing. Please join us at the Queen Elizabeth II Conference Centre, Westminster, on the 14th for Europe's largest publishing conference and a full day's programme of stimulating, thought-leading commentary. Hurry to book seats while they last.
Today Tolino starts its first big international challenge thanks to a strategic all-comprehensive partnership with Messaggerie Italiane.
Messaggerie Italiane with an overall turnover of about US$620 million is the owner of Italy’s largest book distributor; it is the largest Italian online bookseller (IBS.it) and the country’s third-largest book publishing group. While Tolino has had an introduction earlier in Belgium, this new Italian initiative is the first at a strategic level, given the market size and above all the broad scope of the partnership itself.
Tolino is perhaps the best national success story in the ebook industry after Amazon’s Kindle. If Amazon ignited the ebook market with the Kindle’s rollout in the US in 2007, Tolino perhaps replicated that moment in Germany in 2013. In less than 18 months Tolino has been able to grow the German ebook market and quickly catch up there to the long-standing international incumbent from Seattle. According to recent estimates, Tolino now commands a market share in Germany of 40 percent, very close to Amazon’s position. In no other Western country has the giant retailer found a rival of such strength.
What is remarkable is that Tolino was launched from scratch, without any consumer brand and as an ebook-only pure-play in March 2013.
The name “Tolino” itself doesn’t mean anything and it doesn’t sound German either. In fact, it sounds more Italian or Spanish. Tolino faced worldclass competition from Amazon. Germany is the first non-English-speaking market that Amazon entered (in 1998) initially through a purchase of the then-local online bookshop leader (Telebuch.de).
I remember that acquisition well and how quickly Amazon grew as a fantastic online brand in Germany. Incidentally, the company’s German offices were in Hallbergmoos, the same village in which I was working 30 kilometers north of Munich. It was a high-tech district at that time, and I saw them growing from Day 1.
I’m not aware of another instance in which a national brand has closed the gap in ebook sales with Amazon as quickly – within about 18 months of Tolino’s launch. And consider that Amazon had a 15-year head start in Germany (from 1998). Note that Tolino sells only ebooks and the devices. No print books, no music, no other media, no consumer electronics, no “everything store.”
The main problem with Tolino – and perhaps one of the reasons why they have been so successful - is that they aren’t publishers and therefore haven’t been very good at selling themselves internationally. Outside Germany, almost nobody really knows them and most think Tolino is a German joke. It’s not a joke, it’s serious, innovative and open, perhaps with more potential than other leading closed ecosystems. It’s a business case to be studied, distinct from other stories. The device may look similar but the business model offers a triple play: device, content, e-commerce.
A press conference was held today in Milan with representatives from both parties to present the Tolino- Messaggerie Italiane partnership. The keynote speakers were:
- Alberto Ottieri, ceo of Messaggerie Italiane and president of Internet BookShop Italia (IBS.it)
- Mauro Zerbini, ceo of Internet BookShop Italia (IBS.it)
- Vincenzo Russi, chief digital officer of Messaggerie Italiane
- Klaus Renkl, international business development for Deutsche Telekom, Product & Innovation
- Maura Zaccheroni, international business development, Deutsche Telekom, Product & Innovation
In a first step for the partnership, IBS.it will start promoting sales of Tolino’s latest devices online as well as offline in its physical bookshops. (They own 10 shops directly and 34 indirectly through partnerships.) IBS.it is the largest online bookseller in Italy, with more than 4.5 million books sold annually to a customer base of almost 3 million. IBS.it boasts 4 million unique visitors every month, the third most trafficked retail web property in Italy after Amazon and eBay, according to eMarketeer. If you also take into account its physical bookshops, IBS.it with over US$150 million turnover is presumably bigger than any online-only competitor operating in Italy.
The product lineup chosen by IBS.it includes two e-Ink readers and a tablet. The two e-Ink readers will all be available for sales starting from 17th November online and in its offline bookshops. The tablet shortly thereafter.
- Tolino Shine, the entry level e-ink device will cost € 99. Specs: 6”, 1024 x 758, 183gr, processor 800 MHz/256 MB RAM/4 GB memory, WLAN 802.11 b/g/n, lighting system
- Tolino Vision 2, the premium e-Ink device will have a launch price of €149. Specs: 6”, 1024 x 758, 174gr, processor 1000 MHz/512 MB RAM/4 GB memory, WLAN 802.11 b/g/n, lighting system, waterproof, one-hand control and page turn
- Tolino tab, 8 inches, the android tablet, will cost € 199. 1920 x 1200, Intel® Atom™ processor 1,83 GHz/2 GB RAM/16 GB memory WLAN (802.11 b/g/n) Dual Band, WiFi-direct, Bluetooth® 4.0, 2Mega-pixel camera
The content in Italian language is provided by IBS.it, thanks to its ebook distribution agreements with virtually all Italian book publishers. Overall the inventory offers more than 100,000 ebooks in Italian and 1.6 million in English, German, French and Spanish, all provided by Tolino itself.
Moreover, all of Tolino’s customers in Italy will also be able to read their ebooks in any iOS and Android tablet and smartphone thanks to the Tolino’s Apps in Italian. They will also be able to port their ebook library into Tolino’s ecosystem, except for closed formats used by some international retailers. IBS.it’s customers will automatically find their ebook libraries in the Tolino’s cloud, as IBS.it ceo Mauro Zerbini confirmed.
As Messaggerie Italiane’s cdo Vincenzo Russi said, the Tolino is an entirely open ecosystem that allows any stakeholder of the book industry to benefit: authors, publishers, distributors, retailers and readers.
Deutsche Telekom’s Klaus Renkl maintained that Detusche Telekom’s role is to further develop the entire ecosystem from a technological standpoint, innovating the services offered to all stakeholders and making sure the reader’s journey (from discovery to reading, sharing and archiving) stays in line with evolving tastes and needs of the readers. They will also make available the ecosystem of many other European partners. The more, the better, as more partners in the Tolino alliance enable heavier technology developments for the benefit of all partners.
The partnership foresees, according to Messaggerie Italiane’s ceo Alberto Ottieri, a roadmap for involving independent bookstores in Italy, on a similar journey as the one Libri in Germany just announced at the Frankfurt Book Fair.
As Ottieri said, Tolino stands out from other solutions or ecosystems for one key reason: it empowers bookshops and booksellers with high-tech and advanced services designed by Deutsch Telekom and now available to many booksellers in Europe. Messaggerie Italiane intends to play a pivotal role to sustain the independent bookstores in Italy.
Tolino, as a matter of fact, is open and can be sold in any offline bookshop while allowing the bookshop’s owner to keep the customer and to offer her/him new services.
Indie bookstores will earn both (a) from the sales of devices and (b) from the sales of any content associated to the user, even if the user buys online from another store in the Tolino alliance. And this leads to the third revenue stream for every store: they can setup an e-commerce store to sell ebooks thanks to a white label solution that Tolino will make available in coming months.
The device distribution and the relationship with the independent stores will presumably be managed by Messaggerie Libri, the main Italian book distributor owned by Messaggerie Italiane.
Interestingly, the digital disruption that started with publishers and online retailers few years ago, now starts to propagate and touch both physical retailers and book distributors.
It will interesting to see how a big traditional distributor such as Messaggerie Libri will tackle new challenges.
- First: Logistics for fragile hardware devices isn’t the same as for books (storage and shipping need special care)
- Second: Inventory management (hardware devices are more expensive than books, become quickly obsolete and cannot be returned to the manufacturer if you don’t sell them)
- Third: it’s about consulting and supporting indie shops for both hardware sales and to run the local e-commerce shops. Web experts, software engineers, data scientists. New competences for new jobs.
This is easier said than done.
We all know that even best strategies are useless without a proper execution. So time will tell if Messaggerie in Italy and Tolino in Europe will succeed. Maybe one day not too far in the future, book distributors will expand their business and distribute software solutions and offer totally new consulting services. And bookshops will be able to help readers to do many other things.
As we say, the future can’t be predicted, but it can be invented. An open future looks so better than a closed one, for the culture and for the entire industry.
Marcello Vena is the founder and managing partner of All Brain, which he describes as the world’s first on-demand leadership service for senior executives across the entire value chain of the media and publishing industry. Previously Vena founded and managed - until June 2014 - the digital trade book business of the RCS Mediagroup, one of Europe’s largest publishers and the owner of publishing houses including as Rizzoli, Bompiani and Fabbri Editori.
Images of Tolino devices are from Tolino.de