The battle for eBook retail supremacy
Amazon is the undisputed king of the hill in the ebook market right now. They sell more ebooks than anybody else, and their Kindle ereader is dangerously close to becoming a synonym for ereader the way Kleenex did for facial tissue. Then there is this little company out of Toronto that you may have heard of once or twice. Kobo. I think they could take Amazon down, or at least give them a run for their money (which is considerable!). More on why further down.
Ebook Retail Marketshare
First, the numbers. Apple claims to have 20% market share, while experts outside of Apple put them at about 10%. For this article, I'm going to split the difference and call it good. Amazon Kindle is anywhere from 50-60%, so again I'll split the estimated difference. Barnes and Noble Nook is at 25%. Kobo and Google together are 2% max. I'll give them each 1%.
Based on those numbers, here is what ebook market share sales look like:
Amazon Kindle: 55%
Barnes & Noble Nook: 25%
Apple iBookstore: 15%
Google: 1%
Kobo: 1%
But Scott, you ask, doesn't this leave a few percentage points shy of 100%? Yes, it does. We're estimating, so give that extra 3% to whichever of the bigger 3 you want. The point is that Amazon is the Goliath in this story.
Why I think Kobo has a fighting chance
Now, looking at the numbers, why in the world would I say that Kobo has the best chance of challenging Amazon for supremacy in the ebook market?
Here are some excerpts from Alex Hern's great breakdown on NewStatesman:
Amazon is the business you don't want on your turf... If it decides to compete with you, your options are dramatically limited: you can't undercut it, because it doesn't care about profits. You can't live in an under-served niche, because Amazon's scale lets it serve every sector out there. And you can't really pivot into a new business, because if you can, Amazon can too – and will.
But Kobo's strategy seems to be make use of the one thing Amazon doesn't have: friends.
The distinction is clearest when it comes to retail partners. WHSmith's [has a] working relationship with Kobo... the two companies are now selling Kobo readers in a shop-within-a-shop in WHSmith's Oxford Street branch, and plan to expand that to 100 shops around the country. And the deal is reciprocal: while Kobo gets to sell in WHSmith locations, the latter now has a white-label ebookstore where customers can buy Kobo books.
That's a far cry from Amazon's relationship with brick-and-mortar retailers, which is basically to make them cry.
That's a good rundown of the situation in the ebook market right now.
Amazon is bigger than everyone else combined. And they are not shy about throwing their weight around.
Rather than try to be flahsier with software or something online, though, Kobo is working on creative relationships with independent bookstores and trying to present itself as the eReader for the discerning reader. And I think they are on to something.
Here are 5 reasons:
1. Device Differentiation: The Kobo e-readers are freaking awesome. They are, in every sense, the luxe version of what you want an ereader to be. They have great design, good lighting, sweet UI, and they have handy little apps where you can collate all your vacation ticket and hotel details along with your ebooks. So, while you're reading and want to check the details, you can do it real quick on the same device! They are by far the smartest lifestyle designers in the ebook device game.
2. Luxury & Afficianado Market: In addition to courting the luxury market, they are also positioning themselves as the ereader for people who read a lot. That's a small group, but it is the group who talk the most about reading. So, if they can get 100,000 avid readers to tout their product, that's a huge percentage of the online community mavens who readers turn to for recommendations. Oh!
3. International Markets: Kobo may be just 1% of the ebook market in the U.S., but they are much stronger internationally. They have 20% of the world ereader market and they make somewhere close to 10% of the world ebook sales.
4. Vision: Kobo's CEO is one of those rare but real inspiring and visionary leaders. He is doubling down on making a great ereader and expanding the business internationally. So, that means that not only does Kobo have one of the better ereaders out there right now already and a solid chunk of the international market, they are putting all of their money on building off of their strengths. Contrast that with Barnes & Noble who have abandoned the bookstore model in favor of trying to compete with Amazon or Google who are trying to do something in an industry that has nothing to do with their core product.
5. Community: Kobo has also been aggressively working with independent bookstores around the country. Independent bookstores do not get along with Amazon because Amazon does not play well with them. I think that as the industry figures out the new relationship models, the strong independent bookstores will be the ones who have readers and authors on their side, and Kobo will be with them if they keep up the courtship.
What do you think? Does Kobo have a chance to challenge Amazon and the others? Do you own a Kobo and what do you think? Do you like it better than other ereaders?
Image source: Lead by maha-online, middle by DonkeyHotey, both via flickr