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Startup Livrada to sell ebook gift cards in U.S. Target stores

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In an effort to make ebook gift-giving more spontaneous and fun, Los Angeles-based startup Livrada is partnering with Target (s TGT) to sell gift cards for bestselling ebook titles like 50 Shades of Grey and Gone Girl in the chain’s 1,771 stores nationwide.

The pilot program, which is initially available for Kindle (s AMZN) and Nook (s BKS) and will be available on other platforms by the end of the year, launches on Sunday, July 15 with six books. Five are published by Random House: Fifty Shades of Grey by E.L. James, Gone Girl by Gillian Flynn, 44 Charles Street by Danielle Steel, Odd Thomas by Dean Koontz and The Girl Who Kicked the Hornet’s Nest by Stieg Larsson. The sixth book, State of Wonder by Ann Patchett, is published by HarperCollins (s NWS).

The ebooks are sold like gift cards and will be found in Target’s electronics section, near the e-readers. (Target no longer sells Kindles, but it carries other e-readers, like the Nook.) Here’s how it works: A consumer buys a card for a specific title. Target takes a cut and Livrada gets the rest. The consumer (or gift card recipient) goes to Livrada’s website to activate the gift card and choose whether he wants the book for Kindle or Nook. Livrada buys the book directly from Barnes & Noble or Amazon and sends it to the consumer’s e-reader.

Ebook gift-giving is still in early stages, but it generally happens entirely online. When you buy a Kindle book as a gift for someone else, for instance, they find out when they get an email. Livrada wants to make it more physical. “Email-driven gifting is boring,” Livrada cofounder and CEO Leonard Chen, formerly a senior director of digital strategy and business development at Warner Music Group, told me.

A consumer can obviously buy one of Livrada’s ebook cards for himself, but Chen thinks most people will give the cards as presents: “You can give your friend a gift if you know they have an e-reader but you don’t know which [brand].”

“We’re looking for new ways of facilitating gifting of ebooks,” said Chantal Restivo-Alessi, chief digital officer at HarperCollins, “and we look forward to seeing how this new service can extend our reach to a wider range of consumers.”

Random House and HarperCollins pay Livrada marketing fees on the front end. Livrada also collects affiliate fees from Amazon and Barnes & Noble for referring sales.

Livrada’s cofounder and chairman is John Tantum, the founder and former president of Virgin Mobile USA. The company is currently self-funded and Chen says it is not actively fundraising yet — though that could become necessary later this year, when the company hopes to expand to other retailers, sell more titles and add support for platforms like iPad (s AAPL). Livrada is in discussions with other big-six and smaller publishers about adding their books to the program.

Will ebook gifting take off?

Many consumers still don’t know that it’s possible to give ebooks as gifts. Publisher Open Road ran a holiday campaign to try to educate them about the process last year, but most people still just buy ebooks for themselves. Livrada’s cards could make the process more spontaneous and physical. The cards themselves, which emphasize the books’ covers, look good and consumers may be tempted to pick them up. It’s possible, though, that they will still be confused about what the cards are for.

Companies have experimented with selling “physical” ebooks before, but have not gotten very far. Enthrill, a Canadian company, tested such a program last year and is now selling its ebook cards in 102 stores in Alberta. Livrada’s focus on gifting, and the cards’ availability nationwide, could help the concept get off the ground.

7 Responses to “Startup Livrada to sell ebook gift cards in U.S. Target stores”

  1. John F. Harnish

    This appears to open a new retail avenue only for the big six corporate publishers. Nothing was said about how this will impact the author’s royalty. I’m guessing that doesn’t matter because the publisher owns all rights to the content.

    • Hi John, thanks for commenting. We believe that Livrada’s service is beneficial for authors. We are opening up new channels for the marketing and sale of e-books, in the real brick & mortar world, which opens up the market. Authors continue to get royalties through the publishers, so we are not currently positioned to affect that except to drive sales. And, while we are starting with big six publishers, we are open to all mid- and small-sized publishers and independent authors. Obviously, we need to grow our service and platform before we are able to service the rest of the market. Just know we have this in mind! Thank you, and sorry for the delay. – Leonard Chen

  2. So, if you select Kindle as the format, does the user get an email or other notice from Amazon asking where to send the book? Because lots of folks have multiple Kindle/Kindle app combinations. We have 4 on our Amazon account: Kindle Touch (me), Kindle for Android (my phone), Kindle 3 (husband), and Kindle for iPad (husband). It’s nice you can get a card, especially as someone might not know what ereader you use, but there has to be a way for Amazon to know where to send the book. I assume the Nook could be similar.

    • Hi Carmen, sorry for the late response. If you select Kindle as a format, Livrada will direct you to your Kindle account page, where you can select the specific device to download it to. Same with Nook. Hope that helps! Thanks, Livrada Support.

  3. Brandon

    pretty excited about this release. totally agree with email-driven gifts being boring. hopefully this catches on with other publishers so we can give the tangible gift of reading without lugging books to parties, which is the purpose behind an ebook to begin with. great job, livrada!