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Should Kobo be Counted as One of the 3 Major Ebookstores?

Mike Shatzkin wrote a post this morning on Kobo’s new partnerships (in the UK and in France) and how those deals were going to make Kobo one of the major ebookstore competitors. I had a rather interesting experience yesterday that really makes me wonder if that is true.

I went up to NYC yesterday to attend a comic book convention. While I was there, I attended a conference session on self-pub and how the aspiring writer could use Barnes & Noble’s PubIt to get their content into the Nook Store. B&N organized the session, which is why it focused so heavily on them, but the panelists did discuss B&N’s competitor, Amazon.

They mainly talked about why they didn’t like Amazon’s platform and why they preferred B&N over Amazon, but they did provide reasonably accurate info. But the most interesting detail in the discussion about the various platforms was that Kobo was never mentioned.

Not once – not even as an afterthought. All the authors and publishers on the panel talked as though there was a binary choice: Kindle vs Nook, and that tells me something about Kobo’s market presence. Admittedly, my experience could just be a marketing fail for Kobo, but it could also be a sign that they are not nearly as important as we give them credit for.

I think that the discussion I witnessed was an accurate reflection of how the panelists viewed the ebook market. Kobo isn’t even on their radar. At the very least, I would have expected Kobo to be mentioned as an alternative to Amazon on the international market but they weren’t. This leads me to wonder if  the trifecta of "Kindle, Nook, and Kobo" is really a valid statement.

I’m beginning to suspect that we call Kobo one of the major ebookstore because of the perception that they are important, not because they have a major market share. If I’m right, then the perception that Kobo is a major player comes from the echo chamber that is the publishing press. Everyone has heard enough times that Kobo is a major ebookstore that we have just come to accept it without actually looking at the numbers.

And what limited figures I have for Kobo’s market share independently support this idea. I’m told that Kobo has around 2% to 5% of the US  market, with the vast majority of the market taken up by Amazon and Barnes & Noble (and Apple coming in third with around 10%). And this figures aren’t estimates; they’re based on what publishers are discussing off the record.

What do you think?

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Eoin Purcell October 16, 2011 um 2:45 pm

I think if Kobo rolled a self pub platform I think this would change the game. Until they do, B&N and Amazon and to a lesser extent, Apple, will be at an advantage.


Piotr Kowalczyk October 18, 2011 um 4:31 am

Eoin, they are planning to do it. I hope it will be opened to authors from all over the world. By that time there is always a chance to publish to Kobo via Smashwords.

Brian O’Leary October 16, 2011 um 3:03 pm

The numbers you noted for market share are probably accurate for the United States, less so globally. Digital reading is evolving at different rates in different markets, and there may be an opportunity to become a significant platform elsewhere, even if a company is not significant in the United States.

I think the two deals (with WH Smith and Fnac) make sense for Kobo, which has emphasized retailer partnerships as a strategic priority (including their relationship with Borders in the United States). This approach helps them grow with the market, not against it. At the same time, partnerships may reduce the relative visibility of the Kobo brand.

Public awareness may or may not be a proxy for their long-term success. No one really knows Overdrive in the library space, but they are clearly a significant player in that niche. There may be more ways to succeed digitally than the ones pursued by Amazon and B&N.

There’s a tendency to declare winners (and losers) early, and we don’t check back that often to see who was right (and why). Earlier this year, I wrote a report on digital exports that is currently available through Livres Canada Books. In researching various markets, the range of estimates for how quickly various markets would grow was strikingly wide … no one really knows. It’s not clear if platforms will be global, "glocal" or local. Companies are placing bets as we type. Who does deals is interesting; what deals will stand the test of time is less clear. Publishers probably need to test relationships with a range of partners, including Kobo.

Lynne Connolly October 16, 2011 um 3:26 pm

Depends whether you’re US-centric or not. In Europe, few people have heard of Barnes and Noble, or the Nook. B and N won’t sell the Nook to addresses outside the US. They cite licensing.
Kobo is making a clever choice, going to a market where there’s no clear second. And with Amazon rolling out the Kindle stores to France and Germany, it’s the time to get in. Now or forget it.

Luca Albani (@lukealb) October 17, 2011 um 5:08 am

I agree. Kobo is thinking global, when Amazon and Barnes and Noble are acting hyper-local (!). In Italy Apple has officially opened its iBook Store (with Italian books and magazines) a few weeks ago.

On the other hand Kindle is a byword for ereader in Italy… (and we haven’t got it yet!) when Kobo and Nook are barely know by publishing operators or tech pioneers.

jmurphy October 16, 2011 um 5:07 pm

Depends on the definition of "ebookstore"

Is it a place for readers to buy books? Or is it a place for authors to sell books?

But the reason the self-pub conference didn’t mention Kobo is simply because Kobo doesn’t do self-pub. I wouldn’t read *too* much into it.

fjtorres October 16, 2011 um 6:18 pm

Kobo is strictly a generic adobe adept ebook retailer, as opposed to Amazon and Apple which are ebook distribution channels unto themselves, and B&N which supplements the generic adept catalog with custom deals and PubIt. Those three are building their catalogs up and looking to differentiate themselves from the open "generic" content available to any and all players.

Basically, Kobo is positioning themselves as purely a front-end storefront player, but a global one, by relying on partnerships to fill their content supply chain. Given their resource limitations this is pretty much their only choice and on a short-term basis it lets them play with the big boys.

Whether they deserve to be considered a top tier vendor depends on what is more important, reach or results. If you go by results then, yes: Amazon, B&N, and Apple are the only players of significance in North America and Amazon is the only truly significant global player. If you go by positioning and reach, then Kobo joins Amazon and Apple as a third global player…in the short term…but with two cavets:
First, that companies that live by the partnership in the short term usually die by the partnership in the long term.
Second, that expending resources on reach may result in an operation that is "a mile wide and an inch deep", which usually results in a high overhead/low revenue funding crunch.

It is early in the development of the ebook business and there is still time for players not named Amazon to stake a claim to a share of the future business. But that will not be true for much longer and results will soon have to match reach and reputation because all the indications are that Kobo doesn’t have the deep pockets needed to dig in for the long haul absent fast results.

Will Entrekin October 16, 2011 um 5:26 pm

Paper vs. print, "indie" vs. "traditional," Kindle vs. nook . . . I think it has less to do with Kobo than it does with the fact that publishing industry tends to pretend everything to do with it is a binary argument, with both "right" and "wrong" sides.

Nate Hoffelder October 16, 2011 um 6:15 pm

True, but in this case they were discussing making sure ebooks were available everywhere.

Mike Cane October 16, 2011 um 7:46 pm

What about Apple? With the iPad, not even one mention? What about Amazon in terms of the Kindle *Fire*?

Nate Hoffelder October 16, 2011 um 7:55 pm

I didn’t find it odd at the time that Apple wasn’t mentioned.

And I didn’t get a chance to ask about Apple or the Kindle Fire; the session ran over. I’m following up on it now.

Alexander Inglis October 17, 2011 um 11:12 am

Kobo has been in market for a little under 18 months since the launch of their first ereader device. They claim their customer base has doubled in 2011 and sits at around 5 million vs 2.5 million at the end of 2010. They are on an "agile" method of development, releasing tweaks regularly instead of one massive new product annually (Kobo Touch is a great example).

Yes, their resources are very limited relative to Apple, Amazon, B&N and Sony … but they also have an incredibly dedicated, lean management, marketing, sales and development team which is executing a global plan. Their job is to sell content, built around the Kobo platform (kepubs are native, Adobe Adept epubs also available), and to exploit niche opportunities to make the sum greater than the parts.

I don’t think Kobo is ego-driven to be number one and crush everyone else. They are sticking to what they can do, and following an ambitious plan to do much more.

So far, it’s working.

Dan October 17, 2011 um 12:01 pm

The people I work with and talk to, few of whom are "techies", have no idea who or what Kobo is, and rarely know that Sony has ereaders at all. To them the market is Kindle and Nook. This is in the Pacific NW of the US, which I’m sure plays into that, especially now with Borders gone where you could actually see a Kobo. Without having a retail presence or marketing, people just are not aware of them. I would however expect people in the biz, publishers, authors, etc to be a bit more knowledgeable. I hope Kobo can keep it going with Amazon expanding and cutting prices, I like my Kobo wifi.

Doug October 17, 2011 um 1:07 pm

Kobo does offer self-publishing, but it’s not a fancy "platform".

Last week, Kobo hired Mark Lefebvre as Director, Self-Publishing & Author Relations. Lefebvre is also President of the Canadian Booksellers Association, for whatever that’s worth. Anyway, it sounds like Kobo is getting serious about self-publishing.

Nate Hoffelder October 31, 2011 um 8:22 am

Thanks for the info! I hadn’t heard about Mark until you told me.

Luqman October 17, 2011 um 2:16 pm

Target and Bestbuy both carry Kobo Readers. Sony has even made a comeback in retail store availability.

Peter October 17, 2011 um 6:18 pm

Where does kobo stand in relation to Google and Sony? Are they still in the game.

Forbes had an interesting article on how market/ wallet share is a very predictable function of the number of competitors as well as each competitors rank. A 5-6% share for the fourth place competitor suggests at least 5 players are still very much in the game.

It may also be worth noting that Shatzkin’s own book was a kobo exclusive for a while.

I actually think that more author’s should explore exclusivity at smaller ebookstores when they initially release e-books. The reason is that the first couple hundred sales you get will be largely the result of your own marketing- and you can achieve better visibility by directing friends/ family/ blog readers to a smaller pond (bestseller/ most reviewed lists matter) than to an ocean.

Go to bigger stores when you’ve already worked your way up the top buys list elsewhere. And leave Kindle until you already have a devoted following (or have already failed to attract a devoted following) pretty much everywhere else.

Nate Hoffelder October 17, 2011 um 6:35 pm

Kobo have a larger market share than Google and Sony combined.

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