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How Kobo Overcame Great Odds & Showed Maverick Thinking, Or, How to Masturbate in Public

712898892_f1f25f7a6b_bKobo published a self-congratulatory post on Medium this week which was sorely lacking in any achievements worth celebrating.

They’ve posted the text of the talk  Rakuten Kobo CEO Michael Tamblyn gave at The Economist’s Canada Summit where he lauded Kobo’s accomplishments. While they may have sounded impressive to Kobo, they don’t amount to a hill of beans.

For example:

They say when you’re starting a new business, you should look for the white space, be first to market, go where your competitors are not. Or there is another option. You can do the exact opposite. In 2009, starting here in Toronto with a handful of people, we picked a fight with the largest ecommerce company in the world, with the most successful hardware company ever, with the world’s largest book retail chain, and the most profitable search engine in history.

And you lost all four of those fights. Amazon won. Google won. Apple won. (I’m not sure which book retail chain won, but I know it wasn’t Kobo. )

Bravo. Slow clap.

Seven years later, 27 million users, 20 countries, millions of devices, tens of millions of ebooks and a $315M acquisition later, I get to tell you why that worked, why being Canadian mattered, and why sometimes the best revolutions don’t look like revolutions at all.

Seven years after Kobo launched and Amazon owns the market for trade ebooks, while Kobo is in a distant fourth or fifth place behind Kindle, iBooks, Kindle Unlimited, and (possibly) Play Books.

Yes, Kobo lost to Amazon not once but twice. Congrats.

Kobo was born to disrupt.

Kobo didn’t disrupt shit. Amazon disrupted the ebook market, and Kobo came along for the ride.

Even Kobo’s one major accomplishment, being the leading ebook retailer in Canada, only came about because Kobo was launched by Canada’s largest bookstore chain, Indigo, and took advantage of Canada’s protectionist economic policies. That makes Kobo the corporate equivalent of a trust fund baby, not a disruptor.

And –

Sorry, but I can’t take any more of that crap. I would like to fisk the piece, but it exceeds my tolerances. (I’ll forward it to Konrath, and see if he wants to have a go.)

Folks, Kobo’s sole great accomplishment is that they outlasted a lot of the also-rans in the ebook market, including Sony Reader, txtr, Samsung, Oyster, Nook, Bebook, and a UK-based company whose name I cannot recall.

And I’m sorry, but I just don’t see "we survived" as deserving a medal.

Do you?

image by N1NJ4

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Former Reader June 19, 2016 um 12:24 am

Millions of users and books and devices. It’s a success story. Your foul mouthed blog title, is not a winner.

Muratcan Simsek June 19, 2016 um 2:40 am

I think an argument can be made for Kobo being world’s largest ebook retail; not because of the hard sale numbers, but by accessibility.

While Amazon is available in some countries, Kobo sells almost all of them. They have no geographic restrictions and have local pricing for those 20 countries. Having no geographical restrictions is important for the rest of the world. I will always look at Kobo favorable because of that. They sold me books while no one else was doing it =) I am sure this is an opinion shared by many people not living in USA, UK, Germany and such.

Fahirsch June 19, 2016 um 10:50 am

I live in Argentina and have been buying from since 1998. The only time I had a geographical problem was last month when I tried unsuccesfully to buy a French ebook and was unable to do so even from a French bookstore because neither my ip nor credit card was French.

Logseman June 19, 2016 um 4:33 am

"That makes Kobo the corporate equivalent of a trust fund baby, not a disruptor."

Given the demographics of your typical SV darling, aren’t they both and the same?

Nate Hoffelder June 19, 2016 um 7:44 am


I must be missing something due to the early hour, but what does that stand for?

Logseman June 19, 2016 um 8:17 am

Sorry, Nate, I should have not shortened it. SV stands for "Silicon Valley". The Venn diagram between trust fund babies and start-up founders shows significant overlap.

Nate Hoffelder June 19, 2016 um 8:19 am

Good point.

Sharon Reamer June 19, 2016 um 7:10 am

I’ve started getting some traction on Kobo whenever I do a promotion. I’m hoping they will someday get a little better so I can also do better on their platform.

Mary June 19, 2016 um 7:31 am

The only advantages my Kobo has over e-ink Kindles is superior font manipulation, including the ability to darken a font to make it more readable. It also has superior battery life. Aside from those, everything on the Kindle is easier.

DavidW June 19, 2016 um 8:56 am

Why the bitterness? This post is really angry for no good reason. Kobo started as a small company and now they are a world wide enterprise with marketshare comparable to Apple and Nook. I’m not going to hold it against them for not defeating Amazon. If Apple can’t, why should we expect any company to achieve that?

As for Kobo aligning themselves with Indigo books: using every resource available is not cheating as you seem to think it is. It’s business.

Nate Hoffelder June 19, 2016 um 9:16 am


No, I’m just annoyed that I had to read that crap.

Fjtorres June 19, 2016 um 9:55 am

Kobo didn’t align themselves with Indigo. Indigo *owned* them.
And then flipped them to Rakuten when they saw it was going nowhere.
(Unlike B&N, they got out while the getting was good.)
Since then:

How highly does Rakuten value Kobo?
(Try looking for them on
They think so highly of Kobo’s prowess that after two years they sent their inhouse turnaround specialist over.

A year later, they bought Overdrive.
A year after that they took a goodwill write-down on Kobo.

When Rakuten bought Kobo they had “high single digit” market share in the US. Last I saw I think they were at half that.

Now, unlike Apple and Google, it’s not for lack of trying. They do try very hard.
But the results…

The best you can say is they are popular with techies and hobbyists which means they are players in those markets where ebook sales are dominated by techies and hobbyists, the way the US was before Kindle. In fact, the lower the ebook market penetration, the better they do.

No, I’m not impressed by their “marketing genius” in letting local B&M booksellers do all the promotional heavy lifting at retail. Seems to me relying on partners with a vested interest against your product isn’t necessarily a good long term strategy, especially when your primary suppliers are actively working to suppress sale of your product.

And those millions of users? Seems like a big number, doesn’t it? Except that is the number of total accounts, including the ones they got from Sony, from Waterstones, and other closures. It includes everybody you ever signed up to get a free ebook or just to check out the quality of the service. It says nothing about how many of those accounts are actively buying ebooks day by day, month by month. A couple years back, before going full death spiral, Nook released *their* numbers:24M accounts, of which less than half were active. And a third of them, 8m, generated 80% of their sales. Since then, the market has grown significantly and Nook has shrunk. But they can still brag of more accounts than Kobo. And they were nevera global player. Kobo is all over.

I wouldn’t doubt Kobo if they said they are the biggest vendor of generic ADEPT ePubs on the planet (although Google and Tolino might have a similar claim) but it is a big leap from being a big goldfish to being a global shark like Amazon, Apple, and Google. Like it or not, the big sales and big money isn’t in interoperable epub, it’s in the walled gardens and will stay there as long as the BPHs stick with Agency pricing and Indies stick with, Amazon UK, and KU.

Btw, Nate: you forgot about Amazon UK. It alone is bigger than Kobo.
For that matter, wasn’t there a report here that Amazon japan was outselling Kobo?
And what about India and China? How is kobo doing there?

It’s puffery, plain and simple.
Or maybe Rakuten is planning to IPO Kobo and are pimping it for the unwary?

RAD June 19, 2016 um 10:01 am

I think I’m missing something, how did Kobo take advantage of "…Canada’s protectionist economic policies"?

I eagerly purchased the Kindle when it was introduced in Canada (~2009). I bought the first Kobo just to play with not expecting it to replace my Kindle. It was inexpensive, and what made it inexpensive (no cellular/wireless) also made it lighter and I found myself using/preferring the Kobo. I would have switched back when Amazon introduced the Kindle Paperwhite but they didn’t release it in Canada. I currently use a Kobo Aura H2O which is almost the perfect device for me (I wish it was lighter and came in white) and will probably only think about a new device if/when this one dies (an emergency Kobo replacement is probably the only reason I’d walk into a Chapters/Indigo retail store too). I’m as committed to the ePub/eInk ecosystem as I am to Canon SLR body/lens ecosystem. I am no more concerned about Kobo’s market share vs. Kindle/iBooks/GooglePlay than I am about Nikon/Sony when it comes to SLR camera systems. Kobo has created a distinct value proposition that works for me.

So I think Nate’s issues are 1. using the term "disrupt", and 2. Kobo being proud of their accomplishments while not dominating the big (U.S., U.K.?) markets. Kobo isn’t disruptive the way the Web or the iPhone were disruptive (new product, new market), it is about finding sustainable product-market fit within the scope of several larger disruptions (globalization, web, eRetail, digital content, iOS/Android, eInk readers) and the fact that a small-market bricks-and-mortar national book retailer responded to the eBook disruption and grew a new international eBusiness. Kobo did it without an existing giant platform nor significant capital nor being first to market. You can maybe chalk up the success in Canada to nationalism (or protectionism?) but that doesn’t explain why it did well in other small market anglo markets like Australia and New Zealand.

When you are the number two international eInk reading platform and number four international eBook retailer with strong positions in large established markets (Japan, France) and some developing markets (India), you have every right to be proud, in my opinion.

Fjtorres June 19, 2016 um 10:21 am

Amazon was not allowed to sell pbooks into Canada for years and years, well into the ebook era. They weren’t able to sell ebooks for years after that. They weren’t allowed to sell the Voyage over patent issues.

To this day, many canadians think Amazon doesn’t *want* to sell content there.

Lots of little things adding up.
Indigo has gotten away with murder up there thanks to their influence peddling. Fully documented in the canadian press, too.

RAD June 19, 2016 um 11:24 am

Unless I completely misremember, I was buying paper books from Amazon long before the Kindle was introduced. Amazon used Canada Post as their delivery partner.

I just checked my order history, first order on July 30, 2002 for paper books. According to my Chapters/Indigo account, my first online book order from them was October 28, 1999.

My first Kindle (via even for Canadians) was made November 17, 2009. It was the 2nd generation model

You can probably go search for press releases if you don’t trust me.

I don’t know anything about Voyage patent issue but it makes sense if that was the reason for not releasing the product. If it was a Kobo patent that prevented the introduction of the Voyage (or the Paperwhite which I remember not being available in Canada) then I can understand your perception of dirty tricks.

I can’t speak to what "many Canadians think" about Amazon but I can speak for myself and I think your interpretation of past events differs significantly from my own.

Nate Hoffelder June 19, 2016 um 11:30 am

Yes, but all those early purchases were shipped from the US because Canada wouldn’t let Amazon establish a Canadian sub until 2010.

RAD June 19, 2016 um 1:36 pm

Ahhhh…. thanks for the link. That is the kind of helpful information I was interested in. I didn’t realize that there was a foreign ownership law for selling books. My first paper book order in 2002 from Amazon shipped from Canada (Toronto). The issue would have been that Amazon had no choice but to use a Canadian company to handle the distribution centre (delivery would always be between UPS Ground and Canada Post). The service (especially the Canada Post fulfillment/delivery stretch) was slightly better than Chapters in my experience, the availability and prices were always on par, so became my first stop with Chapters being choice number two when pricing/availability was better.

Kudos to the Harper government for removing the outdated law in 2010, at least they did one thing right. So the question is how much the late 2002 introduction of paper books hurt Amazon in Canada and how much profit was lost by Amazon between 2002 and 2010 when they used Canada Post instead of their own distribution centre.

As any Canadian business flyer/traveller that has been asked by U.S. Immigration "why isn’t there an American that can do that job?" knows, Canada does not have a monopoly on brain dead protectionist laws. Lets just agree that protectionist laws should be eliminated, period.

So the Kobo was introduced in 2010. Are you and Fjtorres going to stick to the story that Kobo’s success in Canada was purely due to political malfeasance and protectionism, a blatantly unfair competitive advantage? Have you ever changed your mind on something like this before? Do you think I’m being obstinate for not changing my mind?

Here is my take, unlike Fjtorres I don’t think Kobo’s core user is techie/hobbyist, their core user is the opposite, a non-technical but avid reader that sees the value in the eInk reader and only buys it after seeing/handling it at the retail bookstore or via a friend. They don’t comparison shop, all that matters is that they think the ~ $100 model or ~ $200 model is worth it. The partnership with a local book retailer is what made them successful in Australia and New Zealand (purely an assumption based on the pattern I see). Remember, outside of the U.S., the only eInk reader options are Kobo which you see in a local book retailer or an Amazon Kindle which you purchase online. I don’t know the history behind why the U.K. went with the Kindle over the Kobo, that fact could kill my theory.

The big issue for Kobo (and Kindle for that matter) is the move away (or maybe stagnation/saturation) from eInk readers to iOS/Android. Maybe the Fire tablet is well positioned, I don’t know how its doing against Android-tablet/Play. iOS/iBooks and Android/Play have a natural advantage for those customers perfectly happy reading an eBook on their smartphone/tablet. The other big question is who wins the BRIC (Brazil, Russia, India, China) markets for ebooks.

Amazon and Kobo have an advantage for those that want cross-platform books especially if they prefer an eInk reader platform. Kobo’s secret sauce is partnering with national publishers/retailers who fear Amazon/Apple/Google or are generally anti-American (don’t discount that factor in Europe, Canada, Australia, and New Zealand).

So I think the angry "morning puffery" meme is a bit misplaced, gentlemen. I learned/remembered a bunch of stuff so I’m glad you feel the way you do about the article but I think there was a bit too much hyperbole in the response and its staunch support.

The Kobo story since its introduction until now is an interesting one that shouldn’t be hand waved away. Even if you think Kobo is doomed to fail, understanding how they got to this point in time is important in predicting how the industry/market might evolve.

Fjtorres June 19, 2016 um 2:44 pm

RAD: In those days, to fulfill canadian orders Amazon had to buy the books from Chapters, instead of the publishers.

And, I don’t know about you but I often see comments online from people complaining that Amazon treats canadian Prime customers as "second class citizens" because they don’t have access to the same (or same amount) of content as Americans. They don’t realize it’s their politicians protecting their culture.
Americans, on the other hand, don’t mind that vast amounts of their most popular TV shows and TV movies come from Canada, Australia, New Zealand, and even Ireland. Never mind the PBS-BBC connection…

To each their own.

RAD June 19, 2016 um 5:07 pm

Fjtorres: at this point I’m going to just concede that your stories are too wonderful to be disputed. I enjoyed your explanation of American enlightenment regarding global culture/entertainment. I guess I have a lot to learn more about those Commonwealth countries/cultures you mentioned, never mind the PBS-BBC connection. Who knew. I wonder if the iTunes music I purchased actually came from Sam the Record Man.

Fjtorres June 19, 2016 um 10:16 am

Sorry ’bout the cut-paste glitch.
(Need an edit button. Just sayin'.)
Was reorganizing the talking points.
Missed one, too:

Kobo is officially on the record as saying they are unable to compete against Amazon in Canada without Agency pricing of BPH titles.

Has Kobo’s appeal of the Canadian government’s (limited) action on the BPH Conspiracy been settled yet? Maybe the puffery is related to that.

Nate Hoffelder June 19, 2016 um 10:24 am

I fixed the glitch (mostly).

Fjtorres June 19, 2016 um 11:16 am

Early morning puffery makes me careless.

LCNR June 19, 2016 um 1:34 pm

"…and a UK-based company whose name I cannot recall."


Nate Hoffelder June 20, 2016 um 10:58 am

No, BoB was based in the US. I’m thinking of a company that launched in 2009 with Netronix hardware, made a big showing at a couple trade shows (including CES 2010) and then quietly died in 2010 when their capital ran out.

Fjtorres June 20, 2016 um 12:21 pm


It came in fruity colors!

Nate Hoffelder June 20, 2016 um 12:33 pm

Yes, them.

Maria (BearMountainBooks) June 19, 2016 um 3:41 pm

I like kobo and I have seen growth there in my sales. As far as I’m concerned they are doing something right. They have stayed in the race instead of getting kicked out (or kicking themselves out or giving up). I sell very well, especially in Canada–a market that I wouldn’t be selling to very well if my books were only on Amazon. Yes, Amazon sells there, but I sell one or two books a month via Amazon. It’s a hugely important market for me and allows me to make better world wide sales than I would otherwise.

I buy books from Kobo as well. They have good programs (coupons, discounts) and they are one of the main reasons that indie authors get their books listed for free on Amazon–price matching free at Kobo.

Frank June 20, 2016 um 10:43 am

I think surviving is worth boasting about, since so many other e-book companies did not survive. Also, it is good Amazon has a some competition even if it is only was viable by restrictions caused by Canada’s laws.

Fjtorres June 20, 2016 um 12:23 pm

It would be better if that "competition" actually, you know, *competed*.

Nate Hoffelder June 23, 2016 um 6:55 am

Well, if Kobo had talked about surviving, sure. But instead they proclaimed that they were such wonderful disruptors, which simply wasn’t true.

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