Is Kobo facing budget constraints?

Kobo plans on releasing two new e-readers sometime in the next couple of months. The company filed two FCC applications to sell them in the United States, so this is often the last hurdle before mass production. With all of their money tied up in existing inventory and new devices, is Kobo in financial trouble? Good e-Reader was forwarded an email from Rakuten Advertising, that stated that publishers cannot earn commission on e-readers for the next three months.

“I’m reaching out to request that you opt into a new baseline offer for Kobo. Due to budget constraints, Kobo will no longer be commissioning on devices and accessories for the remainder of Q1.” The advertising network will only pay for new signups for Kobo Plus Subscriptions and gift cards, which are notoriously a hard sell to the average customer.

This is the first time that Kobo has ever sent an email like this to news publishers. There could be a couple of reasons. The first three months of the year are often the slowest months for consumer electronics, so most people got new things for Christmas or Black Friday deals. Marketing budgets are normally allocated at the beginning of the year, so maybe they are holding off until Q2 when the new Kobo e-readers come out. Suffice to say, Kobo sales are at an all time low right now.

Michael Kozlowski has written about audiobooks and e-readers for the past twelve years. Newspapers and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times have picked up his articles. He Lives in Vancouver, British Columbia, Canada.