Digital Reading Company Kobo 'On Pace To Be A Billion Dollar Company

[taming]

From the Forbes article:

Kobo has chased the “heavy reader” segment in particular. Book buying resembles many consumer markets, where the 80/20 rule operates: 20% of the customers buy 80% of the product. So by Kobo targeting heavy users, they can efficiently sell a larger volume. It’s difficult to get comparable figures internationally, but according to management consultant (and my colleague) Brian O’Leary, the average U.S. consumer buys about 4 books per year, and the frequent buyer purchases 12 to 45 books per year. Humphrey reports that his readers via a Kobo device buy on average four books per month, or 48 per year.

Growth

Kobo is growing. “The trajectory for us,” says Humphrey about 2014, “is that we are on pace to be a billion dollar company.” Despite some reports about e-readers and digital book sales losing momentum, Kobo is not experiencing this. “We see no slow down in this business. Not only are we acquiring more customers, but those customers, both existing and new ones are just reading more

[Katsunami]

I find it a bit strange that Kobo codes are so easy to come by.

It's almost as if they're saying: "Yeah, if you are a heavy e-book reader, you'll probably be able to find the codes on the internet, and get cheaper prices. If you're not a heavy reader, or not willing/skilled enough to look into those coupons, you'll pay more."

Sometimes I wonder why they just don't lower their prices 40% or so. Their sales would probably skyrocket, if one takes into account what sort of buying sprees ensue on MobileRead only, if a multi-use 40%+ coupon gets known.

I have bought 16 books in a few days using the Sept50 coupon; more than I have ever bought in paper in one go.

This may be going the way of the tablet/phone apps: books could eventually drop to a price of $1 to $5, and they will sell like mad, making profit just by the numbers istead of margin. There are people and companies that became billionaires by selling one (1) $1 app on iOS/Android. Kobo has thousands, maybe even millions of books to offer.

Low prices, high volume doesn't work for everyone.

It doesn't work for high profile authors since people are already willing to pay high prices. (This would also be bad for Kobo.)

It doesn't work for no-profile authors since people can't find their products in the first place. (Neutral or good for Kobo, but bad for authors.)

[robko]

Originally Posted by Katsunami

I find it a bit strange that Kobo codes are so easy to come by.

It's almost as if they're saying: "Yeah, if you are a heavy e-book reader, you'll probably be able to find the codes on the internet, and get cheaper prices. If you're not a heavy reader, or not willing/skilled enough to look into those coupons, you'll pay more."

Sometimes I wonder why they just don't lower their prices 40% or so. Their sales would probably skyrocket, if one takes into account what sort of buying sprees ensue on MobileRead only, if a multi-use 40%+ coupon gets known.

From a business perspective, these days with a searchable internet they might as well take the higher margins where they can. Those who are really price sensitive likely going to do an internet search and find the discount codes anyway. The perception that they are more expensive than Amazon might hurt them, but my feeling is that the U.S. isn't necessarily Kobo's prime market anyway, so that may not hurt as much as it might first seem.

[Canuck_in_Japan]

Kobo has turned me into a huge book buyer. Before Kobo I probably bought 5 to 10 books per year. Now with their constant sale campaigns I often buy 5 books a month.