At BookNet Canada’s Technology Forum 2010, I condensed down 12 months of learnings, lessons, mistakes, and improvements into 40 minutes (ok, maybe 45.) This also had pieces from the “missing” Tools of Change presentation that I couldn’t give in February, so it’s really two presentations in one. So rather than having to fire up your own hyperdynamic, warp-speed-running ebook startup, you can get the benefit of all of our best insights from the comfort of your own home. Includes: * Two early mistakes we made and how we fixed them * 5 things that every publisher must have to win in ebooks * Why Kobo jumped into the eInk game with the $149 eReader * A day (and a week!) in the life of a digital reader * The answer to the age-old question: “If Charlotte Bronte fought Stephenie Meyer, who would win?” * The four other meanings of Kobo.

5. crazy sh*t happens

7. 12 months
of learnings
about
ebooks
in 40 minutes

8. (a love story)

9. (and data-rich)

10. (delicious & nutritious)

11. #bnc10

12. #gatheringofbeautifulnerds

13. Michael Tamblyn
@mtamblyn

14. #kobo

15. 40 minutes

16. 12 things we’ve learned

17. 2 early mistakes

18. and how we fixed them

19. what we learned

20. about selling ebooks

21. about the ebook reader

22. devices

23. apps

24. in the past 12 months

25. 175,200 : 1

26. highly loss-y

27. 00:03

28. marchaprilmayjune
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29. (happy birthday)

30. February 27th, 2009

31. September 2009

33. Estimate:
Lose 5-10% of print sales
to ebooks in 5 years

34. Choice:

35. a) Let someone else take 5-10%
of Indigo’s sales.

36. b) Enter the ereading market
and take it ourselves.

37. Strategy:
Build Your Own Competition

39. People are pressed for time.

40. Available time is fragmented.

41. Therefore...

42. Offer a reading experience that
works with devices they already
have...

43. ...with a mix of long and short
content.

44. 3 out of 4 were true.

45. Pressed for time
Time is fragmented
Devices they already own
Long and short content

46. ✔ Pressed for time
Time is fragmented
Devices they already own
Long and short content

47. ✔ Pressed for time
✔ Time is fragmented
Devices they already own
Long and short content

48. ✔ Pressed for time
✔ Time is fragmented
✔ Devices they already own
Long and short content

49. ✔ Pressed for time
✔ Time is fragmented
✔ Devices they already own
✖ Long and short content

50. ✔ Pressed for time
✔ Time is fragmented
✔ Devices they already own
✖ Long and short content

51. Mistake #1

52. eBooks
chapters
short stories
articles
blogs
magazines
newspapers

53. eBooks
chapters
short stories
articles
blogs
magazines
newspapers

54. Long form reading is alive and
well on mobile devices.

56. 756 pages

57. 756 pages
1074 pages

58. 756 pages
1074 pages
528 pages

61. eBooks
chapters
short stories
articles
blogs
magazines
newspapers

62. ...we had changes to make.

63. Focus on ebooks. Fast.

64. And we did.

65. (Make mistakes,
adjust, move on.
As fast as humanly
possible.)

66. marchaprilmayjune
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67. Massive software rebuild.

68. Optimized for ebooks.

69. Mistake #2

70. marchaprilmayjune
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71. Too long.

72. New Rules:

73. Release early, release often.

74. Small, cross-functional
development teams.

75. Mix: UX, Dev, QA

76. Agile Development Process

77. Lightweight
specifications

78. Release-ready software every
two weeks

79. New releases every 4 weeks

80. Web
iPhone
Blackberry
Palm Pre
Android
Core/Infrastructure
Content Processing

81. Release early, release often.

82. marchaprilmayjune
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83. I joined Kobo.

84. Content, Sales &
Merchandising

85. What do customers want?

86. What do they read?

87. Escape first,
information second.

89. Fiction dominates for now
(smartphones and eInk
favour text)

90. Illustration-heavy
categories with
illustrated works are
handicapped,
but not for long...

91. When do they read?

92. Average Purchases by Day
Mon Tues Wed Thurs Fri Sat Sun

93. Sales consistent through day and evening

94. Sales consistent through day and evening
Lunchtime

95. Sales consistent through day and evening
Lunchtime Commute

96. Sales consistent through day and evening
Lunchtime Commute Before bed

97. Sales consistent through day and evening
Newspapers
Lunchtime Commute Before bed

98. This is a new release market.

99. New releases sell well…
19

100. unless the ebook release is
delayed.

101. Sales impact of windowing.
20

102. (Obsessive customer analysis)

103. Paging vs. scrolling

104. We got ripped.

105. Scrolling vs. Paging
25% scrolling
75% paging

106. Scrolled pages are 4x as long.

107. marchaprilmayjune
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108. Price.

109. $9.99

110. $10

111. Price and Value

112. “Defend the price of hardcovers”

113. “Preserving the perceived value of
the book.”

114. ebook price
=
print price

115. What do readers think an ebook
is worth?

116. Warning: this next section of slides has
been presented at a previous conference,
but the presenter really likes them and
hopes you will too. Frequent publishing
conference-goers may experience
deja-vu, ennui, or a desire to check email.
Snarky twitter comments may begin now.

117. Publisher-Provided List Price (Trade)

118. Publisher-Provided List Price (Trade)
First
formats

119. Publisher-Provided List Price (Trade)
Trade First
paper formats

120. Publisher-Provided List Price (Trade)
Mass Trade First
market paper formats

121. Publisher-Provided List Price (Trade)
“Old Mass, Mass Trade First
Self pub” market paper formats

122. People will not buy $20
trade ebooks.

123. Publisher-Provided List Price (Trade)
“Old Mass, Mass Trade First
Self pub” market paper formats

124. Unit Sales by Price Point (Trade, in USD)
Unit sales by price-point

125. Unit Sales by Price Point (Trade, in USD)
The Mass
Market
Foothills
Unit sales by price-point

126. Unit Sales by Price Point (Trade, in USD)
The Mass
Market
Foothills
Unit sales by price-point
The Garden
of the Lovely,
Old, Unique
and Weird

127. Unit Sales by Price Point (Trade, in USD)
The
Pinnacle of
The Mass Negative
Market Margin
Foothills
Unit sales by price-point
The Garden
of the Lovely,
Old, Unique
and Weird

128. Unit Sales by Price Point (Trade, in USD)
The Mass “The Hurt
Market Locker”
Foothills
Unit sales by price-point
The Garden
of the Lovely,
Old, Unique
and Weird

129. Unit Sales by Price Point (Trade, in USD)
The Mass “The Hurt
Market Locker”
Foothills
The Barren,
Unit sales by price-point
The Garden Rocky Plain of
of the Lovely, Publisher
Old, Unique Wishful
and Weird Thinking

130. Unit Sales by Price Point (Trade, in USD)
The Mass “The Hurt
Market Locker”
Foothills
Unit sales by price-point
The Garden
of the Lovely, **For print
Old, Unique only**
and Weird

131. Unit Sales by Price Point (Trade, in USD)
Unit sales by price-point

132. Unit Sales by Price Point (Trade, in USD)
$9.99
Unit sales by price-point

133. Unit Sales by Price Point (Trade, in USD)
$9.99
<$9.99
Unit sales by price-point

134. Unit Sales by Price Point (Trade, in USD)
$9.99
<$9.99 +$9.99
Unit sales by price-point

135. razor thin margins
a lot of scale
multiple markets

136. Unit Sales by Price Point (Trade, in USD)
$9.99
Unit sales by price-point

137. Publisher-Provided List Price (Trade)
First
formats

138. $8.76*

139. $8.76*
*excluding textbooks/STM

140. “Could prices be
higher?”

141. 2 schools of thought

142. #1
Consumers would pay
more, we’ve just never
asked them to.

143. #2
eBooks have both lower
cost and limitations on
their use.
Therefore ebooks should
be much cheaper than
paper.

144. Both are true.

145. Which one is more true?

146. #1
Consumers would pay
more, we’ve just never
asked them to.

147. Instant. Can buy whenever, wherever.
Cost savings vs. print.
Convenience - easier to carry.
Not tied to a particular device.
Read on mobile devices/smartphones.
Read offline (don’t need an internet
connection.)
Highlight/annotate.

148. 1. Instant. Can buy whenever, wherever.
2. Convenience - easier to carry.
3. Not tied to a particular device.
4. Read on smartphones/mobile devices.
5. Cost savings vs. print.
6. Read offline (don’t need an internet
connection.)
7. Highlight/annotate.

149. Suggests there is some
room to move price.
(Just not much.)

150. #2
eBooks have both lower
cost and limitations on
their use.
Therefore ebooks should
be cheaper.

151. Also true.

152. ~$14.15

153. what’s missing

155. eBook
$9.99

156. mysterious print premium
$4.16
eBook
$9.99

157. mysterious print premium
$4.16
eBook
$9.99

158. eBook
$9.99

159. Can’t lend it.
Can’t share it with family.
eBook
$9.99

160. Can’t lend it.
Can’t share it with family.
May be tied to a device.
eBook
$9.99

161. Can’t lend it.
Can’t share it with family.
May be tied to a device.
May be tied to a retailer.
eBook
$9.99

162. Can’t lend it.
Can’t share it with family.
May be tied to a device.
May be tied to a retailer.
Proprietary DRM.
eBook
$9.99

163. Can’t lend it.
Can’t share it with family.
May be tied to a device.
May be tied to a retailer.
Proprietary DRM.
Lacks the permanence of
eBook paper.
$9.99

166. “That will be $14.15...

167. ...and I need you to sign
this license.”

168. “It says...

169. These terms apply to all users of the Service, whether or not you are a Registered User.
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171. edit, copy, display, publish and distribute any material made available on the Service by you. The foregoing does not apply to
literary works provided to Kobo for sale on the Service by a publisher or other content provider.
D. You may not obscure or misrepresent your geographical location, forge headers, use proxies, use IP spoofing or otherwise
manipulate identifiers in order to disguise the origin of any message or transmittal you send on or through the Service. You
may not pretend that you are, or that you represent, someone else, or impersonate any other individual or entity.
E. You are prohibited from violating or attempting to violate the security of the Service, including, without limitation:
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(b) attempting to probe, scan or test the vulnerability of a system or network to breach security or authentication measures
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Kobo's systems or networks, or any systems or networks connected to the Service or to Kobo'
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means of "denial of service" attacks, overloading, "flooding", "mailbombing" or "crashing";
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Violations of system or network security may result in civil or criminal liability. Kobo will investigate occurrences which may
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172. “...only you can read it...”

173. “You cannot lend it.”

174. “Or sell it used.”

175. “You don’t really own it.”

176. “You’ve licensed it.”

177. “Enjoy.”

178. Wouldn’t you want to pay
less?

179. That’s the pricing dynamic
we’re in.

180. “Cheaper” is not the only
perceived value in ebooks.
Or the most important one.

181. Ignore customer price
tolerance at your peril.

182. The less a customer
can do with an ebook
(vs. paper), the lower
the value.

183. marchaprilmayjune
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185. Time to raise money!
Creative Commons: Mark Coggins

187. The App Store doesn’t care
about your VC meeting.

188. The App Store doesn’t care
about your VC meeting.
^
board

189. The App Store doesn’t care
about your VC meeting.
^
budget approval

190. The App Store doesn’t care
about your VC meeting.
^
product launch date

191. The App Store doesn’t care
about your VC meeting.
^
mom’s birthday

196. 8 1/2 weeks

198. multiple platforms

199. marchaprilmayjune
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200. multiple platforms

201. Why should a customer
ever be tied to a single
device?

203. These terms apply to all users of the Service, whether or not you are a Registered User.
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you shall not post or transmit through the Service any material that contains advertising or any solicitation with respect to
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means of "denial of service" attacks, overloading, "flooding", "mailbombing" or "crashing";
(g) forging any TCP/IP packet header or any part of the header information in any e-mail or newsgroup posting;
(h) disrupt network nodes or network services or otherwise restrict, inhibit, disrupt or impede Kobo's ability to monitor or
make available the Service; or
(i) taking any action in order to obtain services to which you are not entitled.
Violations of system or network security may result in civil or criminal liability. Kobo will investigate occurrences which may
involve such violations and may involve, and cooperate with, law enforcement authorities in prosecuting any user (whether or

206. “You have to keep this
book on a bookshelf in
your house that I will sell
you...”

207. “...for $259 USD
(plus shipping & handling).”

208. “You may not put books on
this shelf that you have
bought from other stores.”

209. “If the shelf breaks, you
may lose your books.
Or not. We’ll decide.”

210. “If you find a shelf made
by someone else you like
better, too bad.”

214. There are great devices out there.
There will be more.
They will get better.
They will get cheaper.

215. Let the reader choose the right
device for them.

216. “Your whole reading life, always
with you.”

217. The perfect reading machine hasn’t
been created yet.

219. Opus Shelving, Sean Yoos

221. Equation Bookshelf
Marcos Breder

222. Stairs
Shakespeare & Co., Paris

223. We say:
Take your books with you

224. to any device

225. If you find a better device,
move your books there.

226. A book that you can’t take
with you is worth less.

227. September 15th

228. Downloadable ePub
+
Adobe Content Server
+
Digital Editions

229. 60%

230. 40%
PRS-300 Reader Pocket Edition . PRS-505 Reader Digital Book .
PRS-600 Reader Touch Edition . PRS-700BC Reader Digital
Book . Aluratek Libre eBook Reader Pro . Asktak EZ Reader, EZ
Reader Pocket Pro, Mentor . Barnes & Noble Nook . BeBook
One . BeBook Mini . Bookeen Cybook Opus . Bookeen Gen 3 .
COOL-ER Classic . Elonex eBook 600 . HanLin eBook (V3, V5) .
REX Digital Reader 1000S . Neolux NUUT2

231. marchaprilmayjune
julyaugustseptember
octobernovember
decemberjanuary
februarymarch

232. 5 things

233. 1. Digital sales and
marketing

235. 2. Pristine metadata
(ONIX 2.1, ONIX 3.0?)

236. 3. Well-crafted ePub files.

237. 4. ePub at the end of the
production workflow.

238. 5. An adventurous and
courageous heart.

239. marchaprilmayjune
julyaugustseptember
octobernovember
decemberjanuary
februarymarch

240. Season of Giving

241. December 15th

242. Raised $16M in funding

243. Largest bookseller in Australia,
New Zealand and Singapore
Largest bookseller in Canada
Second-largest bookseller in US
15 telecom carriers, 10,000 retail
locations in UK, EU, Asia

244. Gave ourselves a new
name

247. Japanese for “workshop”

248. Small unit of Nigerian
currency.

249. A small town in Ethiopia.

250. Slang in Trinidad for
“vulture”

251. The first name of both a
famous author and a sumo
wrestler

252. a rearranging of the letters
in“book”.

253. December 14th

254. Started giving away 1.8
million books

257. 120 libraries in 5 countries

258. 180 languages

259. 400 million pages

260. add about 1,000 new titles
every day

261. We receive listings via
OPDS
(Open Publishing
Distribution System)

262. Given us a lot of insight
into the value of “free”

272. !"#$%&'(#)*+$,)-('').%%/#)
!" #" $" %" &" '" (" )" *" !+" !!" !#" !$" !%" !&" ,"!&"

273. !"#$%&'(#)*+$,)-('').%%/#)
eBook
Training wheels
!" #" $" %" &" '" (" )" *" !+" !!" !#" !$" !%" !&" ,"!&"

274. !"#$%&'(#)*+$,)-('').%%/#)
eBook
Training wheels
“I Jane
Austen”
!" #" $" %" &" '" (" )" *" !+" !!" !#" !$" !%" !&" ,"!&"

275. !"#$%&'(#)*+$,)-('').%%/#)
!" #" $" %" &" '" (" )" *" !+" !!" !#" !$" !%" !&" ,"!&"

276. !"#$%&'(#)*+$,)-('').%%/#)
“Freegans”
!" #" $" %" &" '" (" )" *" !+" !!" !#" !$" !%" !&" ,"!&"

278. OPDS to
Indigo, Borders,
REDgroup

279. Holidays on (dev)ice.

280. People don’t buy ebooks as
gifts (yet)...

281. ...but they do buy devices...

282. ...and the people who
receive devices buy
ebooks.

283. December 24th

284. Week after Dec 25 =
highest volume of 2009

285. Without gifting or gift
certificates.

286. marchaprilmayjune
julyaugustseptember
octobernovember
decemberjanuary
februarymarch

288. 200
Countries
Largest markets:
US, Canada, UK, India, Australia, China

289. Very different levels of
ePub availability.

290. Territorial rights capability
is critical.

291. Territorial rights metadata
is critical.

292. Expect to see Kobo in
more languages

293. marchaprilmayjune
julyaugustseptember
octobernovember
decemberjanuary
februarymarch

294. And then things started to
go mental.

297. “How much higher
could ebook prices
go?”

298. “What if they didn’t have a
choice?”

299. We’re about to find out.

300. Agency.

301. 1. Publishers set prices.

302. 2. eBook prices are lower
than print prices.
(new releases: $12.99-14.99)

303. 3. eBooks are released
simultaneously with print
books.

304. 4. Retailers can’t discount.

305. 5. 70/30 revenue split
Publisher/Retailer

306. Unit Sales by Price Point (Trade, in USD)
$9.99
Unit sales by price-point

307. Unit Sales by Price Point (Trade, in USD)
Unit sales by price-point

308. Unit Sales by Price Point (Trade, in USD)
$9.99
Unit sales by price-point

309. Unit Sales by Price Point (Trade, in USD)
Unit sales by price-point

310. Publisher gets control of
pricing.

311. but makes less.

312. List Net
Wholesale
Can$24.00 Can$12.00
(50%)
Agency
Can$12.99 Can$9.09
(70%)

313. The bet:

314. Consumers want the
books enough to absorb a
$2-5 jump.

315. Unit Sales by Price Point (Trade, in USD)
$9.99
from here...
Unit sales by price-point

316. Unit Sales by Price Point (Trade, in USD)
Unit sales by price-point

317. Unit Sales by Price Point (Trade, in USD)
$9.99
Unit sales by price-point

318. Unit Sales by Price Point (Trade, in USD)
...to there.
Unit sales by price-point

319. First time a media
industry has raised the
price of an existing

320. Bonus:
Also limiting the tactics a
retailer can use to
motivate the consumer.

321. Publishers are going to
have to get good at:

322. Price sensitivity analysis

323. Understanding loyalty
and user motivation

324. Purchase frequency
drivers

325. *Metadata*

326. April 1st

327. April Fool’s Day

328. “The Day We Turned the
eBook Market Upside
Down and Shook it Until
it Rattled.”

329. Could be great.

330. All agency agreements are
being written, negotiated
and signed...

331. ... in less than 30 days.

332. Average time to close an
ebook agreement with a
major publisher in 2009:

333. 3-4 months

334. marchaprilmayjune
julyaugustseptember
octobernovember
decemberjanuary
februarymarch

337. “Powered by Kobo”

338. APIs
software development kit
mobile storefront
custom integration
over 2 million titles

339. eInk devices
tablets
laptops
netbooks
smartphones

340. support for sync/connect
via USB, Bluetooth, WiFi,
3G

342. “Why?”

347. Where is
“the ereader for
everyone?”

348. $149 USD SRP*
* for a limited time

350. No wireless.
USB + Bluetooth

351. No wireless.
USB + Bluetooth
(like your digital camera,
video camera, iPod)

352. Simple.

353. And if you find a better
device,

354. ...or want to read on your
smartphone on the way to
work...

358. your reading life is always
with you.

359. marchaprilmayjune
julyaugustseptember
octobernovember
decemberjanuary
februarymarch