[LINK] "Kobo CEO faces uphill e-book battle against Apple, Amazon"

[rfmcdonald]

The Globe and Mail's Shane Dingman wrote about the issues of Canadian-originating e-book retailer Kobo.

Michael Tamblyn finds himself in an unenviable position. He has a great job – he’s the new CEO of Rakuten Kobo Inc. – but the easy days of e-book sales seem to be over, and industry estimates suggest 2015 was a flat year for e-book purchases in North America.

That said, Kobo has 26 million users and a library of 4.7 million e-books and magazines in 190 countries, and it appears to be making strides. “January was Kobo’s best e-book sales month ever,” says Tamblyn, who estimates e-books make up 18 per cent of Canadian book purchasing. Kobo’s most dedicated customers buy an average of one e-book a month and 16 print books a year. And while industry-wide numbers can be tough to precisely pin down, Kobo is regarded as the No. 3 retailer in e-books worldwide, behind Amazon and Apple.

On Feb. 12, though, Rakuten, Kobo’s Tokyo-based parent company, announced a goodwill writedown that wiped out close to $95-million of the Canadian division’s value, thanks to missed financial targets.

Tamblyn “represents a company that’s clearly an underdog,” says Thad McIlroy, a publishing analyst and author of the Future of Publishing blog. “They have managed to innovate in the quality of the hardware, and are only a step or two behind Amazon.”

Kobo, once one of Canada’s hottest tech startups, became the country’s champion in the e-reading space until it was sold. Now, although still based in Toronto, it’s a division in a much larger Japanese e-commerce company with many competing interests. And with limited resources, Kobo will have to perform sales and technology miracles in order to keep pace in the e-reading market and provide a meaningful third option to Amazon.com Inc. and Apple Inc., behemoths that offer customers far more than just digital books.