With More Funding, Kobo Steps Up

PW - E-book Retail - By Calvin Reid Apr 20, 2012

In the wake of its 2011 acquisition by Japanese e-commerce giant Rakuten, e-book retailer Kobo continues to make news. In a phone interview, CEO Mike Serbinis offered a look at the company’s plans and initiatives for the rest of the year. On the heels of Kobo’s plan to set up Kobo “stores within a store” at 100 WH Smith locations, Serbinis said that Kobo will start an “easy-to-use program for authors to self-publish that will provide access to social media tools and let them connect to readers. It’s something we have to do.” Kobo has started a beta self-publishing program, Serbinis said, and “we hope to launch a broader beta program by BookExpo America,” in June.

Kobo will provide the infrastructure, not decide what is to be published. “We’re not a gatekeeper,” Serbinis said. “It will be an open platform with social integration tied into Kobo Pulse, our social reading platform.” Kobo offers a suite of e-reading devices—two e-ink e-readers and the Kobo Vox, a 7-in. tablet—and e-book reading software that is very competitive with what’s offered on the Kindle and Nook devices. Thanks to Rakuten, Serbinis said, “our bank account just got a lot bigger,” emphasizing that he’s got the capital to compete globally with his much larger competitors.

Kobo partnered with FNAC, the French retailer, in the fall of 2011, offering the Kobo devices and its e-book catalogue. “We’ve taken a 50% market share [in the France e-book market] since November and we’re expanding our [device] distribution,” Serbinis said. Kobo also has a 50% market share in Canada, and Serbinis said that Kobo is seeing triple digit growth in its home country. In the U.S., he acknowledged that the collapse of Borders, a Kobo investor, “was a setback, but we’re getting new U.S. customers constantly through our apps and OEM partners,” noting that “international is growing faster than domestic.”

Serbinis said the company has sold “millions” of its e-readers, added about 100 employees this year, and expects to add “more employees over the next year. We expect triple digit growth in Canada again.” Kobo has opened new offices in Dublin and Luxembourg and is looking for more retailer-partnerships along the lines of the WH Smith deal.

Pointing out Google’s withdrawal from its e-book retailing partnership with U.S. indie bookstores, Serbinis said, “It’s important to have bookselling partners.” Asked if Kobo wants to provide a turnkey e-book retailing program for U.S. indies, Serbinis said, “We can partner with U.S. booksellers—we’re doing it around the world.” Serbinis emphasized, “It’s something we’re interested in. We think Kobo would be a great indie bookstore solution for the U.S.”