Kobo: What Do eBook Customers Really, Really Want? (Michael Tamblyn at Tools of Change 2011)

Michael Tamblyn @mtamblyn

EVP Content, Sales & Merchandising @kobo

20 minutes

Four users

how we look at readers and reading

and to answer the question:

“What happens when...

...a group ofreading-obsessed technophiles...

...get their hands on the richest data set...

...in the history of the book industry?”

A bit about Kobo

global ebook retailer

2M+ registered users

200 countries

34,300 employees 24,100 employees 170 employees!!

May 2010 $149

obsessed

segments

Geography Reading PlatformPricepoint Tolerance Reading History Lifetime Value Free vs. Paid

can get complicated quickly

<$5 80% free

<$5 80% free~$11 100% paid

complicated

4 users

eInk Reading Machine

eInk Reading Machine Gold-A Kobo2Jun-2010 Fiction100% Paid

eInk Reading Machine Gold-A Most valuable Lifetime Value cohort Kobo2Jun-2010 Fiction100% Paid

eInk Reading Machine Gold-A Most valuable Lifetime Value cohort Kobo2 Cohort GoldJun-2010 Silver Fiction Bronze100% Paid

eInk Reading Machine Gold-A Most valuable Lifetime Value cohort Kobo2 Cohort Gold 1st Day Average 7 orders /Jun-2010 $35 $25 month Silver Fiction Bronze100% Paid

eInk Reading Machine Gold-A Most Productive Sales Channels (% conversion) Kobo2 1. Web 2. Kobo eReaderJun-2010 3. Kobo-powered Readers 4. iPad 5. Android Fiction 6. iPhone100% Paid

eInk Reading Machine Gold-A Kobo2 Purchase frequency is increasingJun-2010 overall. eBook buying is accelerating. Fiction100% Paid

eInk Reading Machine Gold-A A customer who starts in Kobo2 June 2010 buys 44% more in their ﬁrst month as a customerJun-2010 than a customer who started Fiction Dec 2009.100% Paid

eInk Reading Machine Gold-A Kobo2 A customer joining Nov. 2010 buys 70% more in their ﬁrstJun-2010 month than a Dec 2009 customer. Fiction100% Paid

eInk Reading Machine Gold-A Why? Kobo2 Better apps Better devicesJun-2010 Better marketing Fiction More titles Better customers100% Paid

Gold-A Kobo2Jun-2010 Fiction100% Paid

Health Religion Business eInk Reading Machine Gold-A Juvenile Fiction & YA Kobo2Jun-2010 Biography Fiction History Self- Fami help ly100% Paid

Gold-A Kobo2Jun-2010 Fiction100% Paid

Small-screen ReaderBronze-E iPhone Nov-10Romancepaid+free

Small-screen ReaderBronze-E Largest segment in terms of numbers iPhone Nov-10Romancepaid+free

Small-screen ReaderBronze-E Largest segment in terms of numbers iPhone Cohort Gold Nov-10 SilverRomance Bronzepaid+free

Small-screen ReaderBronze-E Largest segment in terms of numbers iPhone Cohort Gold Nov-10 Silver 1st Day Average 1 order /Romance Bronze $15 $11 monthpaid+free

Small-screen ReaderBronze-E Least Productive Sales Channel (% conversion) iPhone 1. Web 2. Kobo eReader Nov-10 3. Kobo-powered Readers 4. iPad 5. AndroidRomance 6. iPhonepaid+free

Small-screen ReaderBronze-E iPhone Small screen device = Nov-10 lower price-point tolerance.Romancepaid+free

Bronze-E iPhoneNov-10Romance50% paid

Actual Selling Price vs. Purchasing PlatformCan$10.00 8.84 8.53 Can$7.50 7.80 7.92 7.85 7.82 Bronze-E 7.42 6.81 Can$5.00 iPhone P Can$2.50 Nov-10 Can$0 All d der p oid b ne rry iPa kto We Romance o kbe r Rea iPh And Des c oe Bla Kob 50% paid

Small-screen ReaderBronze-E iPhone Small screen device = Nov-10 less likely to stick aroundRomancepaid+free

Small-screen ReaderBronze-E iPhone Nov-10 churnRomancepaid+free

Small-screen ReaderBronze-E Platform User Longevity 1. Kobo eReader iPhone 2. Kobo-powered 3rd-party eReader 3. Desktop Nov-10 4. Android 5. WebRomance 6. iPad 7. iPhone 8. Blackberrypaid+free

Histori cal Erotica Mystery Small-screen Reader GeneralBronze-E Romance iPhone Nov-10Romance Science Fiction Literarypaid+free

iPad SocialiteGold-B iPadDec-10General90% paid

iPad SocialiteGold-B Not as good as the Reading Machine, but still pretty great. iPadDec-10General90% paid

iPad SocialiteGold-B Not as good as the Reading Machine, but still pretty great. iPad CohortDec-10 Gold SilverGeneral Bronze90% paid

iPad SocialiteGold-B Not as good as the Reading Machine, but still pretty great. iPad CohortDec-10 1st Day Average 4.5 orders / Gold $22 $16 month SilverGeneral Bronze90% paid

iPad SocialiteGold-B iPadDec-10General90% paid

December 2010

(just launched for iPhone too!)

How does social change eReading?

Quite a lot.

33% more time in app

Reading behaviour atdifferent times of day

Average Time in App vs. “Time of Day” Awards60%45%30%15% 0%-15%-30%-45%-60% mute ch hift Hour time or Lun yard S Prime e Com Happy ooks f Grave Kill th I Eat B

Average Time in App vs. “Time of Day” Awards60% 7-9am45%30%15% 0%-15%-30%-45%-60% mute ch hift Hour time or Lun yard S Prime e Com Happy ooks f Grave Kill th I Eat B

Average Time in App vs. “Time of Day” Awards60% m m-n o o n -9a 9a 745%30%15% 0%-15%-30%-45%-60% mute ch hift Hour time or Lun yard S Prime e Com Happy ooks f Grave Kill th I Eat B

Average Time in App vs. “Time of Day” Awards60% m m-n o o n -9a 9a 745% 12 -2pm30%15% 0%-15%-30%-45%-60% mute ch hift Hour time or Lun yard S Prime e Com Happy ooks f Grave Kill th I Eat B

Average Time in App vs. “Time of Day” Awards60% m m-n o o n -9a 9a 745% 12 -2pm30% 2- 4pm15% 0%-15%-30%-45%-60% mute ch hift Hour time or Lun yard S Prime e Com Happy ooks f Grave Kill th I Eat B

Average Time in App vs. “Time of Day” Awards60%45%30%15% 0%-15%-30%-45%-60% mute ch hift Hour time or Lun yard S Prime e Com Happy ooks f Grave Kill th I Eat B

Average Time in App vs. “Time of Day” Awards60%45%30%15% 6-8pm 0%-15%-30%-45%-60% mute ch hift Hour time or Lun yard S Prime e Com Happy ooks f Grave Kill th I Eat B

Average Time in App vs. “Time of Day” Awards60%45%30%15% 6-8pm am 12-1 0%-15%-30%-45%-60% mute ch hift Hour time or Lun yard S Prime e Com Happy ooks f Grave Kill th I Eat B

Average Time in App vs. “Time of Day” Awards60%45%30%15% 6-8pm am 12-1 8-10pm 0%-15%-30%-45%-60% mute ch hift Hour time or Lun yard S Prime e Com Happy ooks f Grave Kill th I Eat B

Average Time in App vs. “Time of Day” Awards60%45%30%15% 6-8pm am 12-1 8-10pm0-12pm 0% 1-15%-30%-45%-60% mute ch hift Hour time or Lun yard S Prime e Com Happy ooks f Grave Kill th I Eat B

Bet ter i nB ed Prim etim e Sle epin g In Hap py H ourAfte rno o nR ush Hou r Pla ying Hoo kyI Ea t Bo oks for Lun ch Kill the Com mu te Number of Awards Issued Gra vey ard Shi ft Wit chin gH our

1 Bet ter i nB 0-1 ed Prim 2pm etim e Sle epin g In Hap py H ourAfte rno o nR ush Hou r Pla ying Hoo kyI Ea t Bo oks for Lun ch Kill the Com mu te Number of Awards Issued Gra vey ard Shi ft Wit chin gH our

1 Bet ter i nB 0-1 ed Prim etim e 8-10 Sle epin g In 2pm pm Hap py H ourAfte rno o nR ush Hou r Pla ying Hoo kyI Ea t Bo oks for Lun ch Kill the Com mu te Number of Awards Issued Gra vey ard Shi ft Wit chin gH our

8pm-midnightebook shopping primetime

The Freegan

The Freegan*FreeganWebsite Apr-10 Fiction100% free

The Freegan*Freegan “Below Bronze-F”Website Apr-10 Fiction100% free

The FreeganBronze-FWebsite Apr-10 Fiction100% free

Free Books Accessed The FreeganBronze-FWebsite Apr-10 Web ne roid iPad ed ktop rry der iPho wer kbe a And Des eRe -po Blac Fiction o o Kob Kob100% free

Side-loadingZero investment International

Not everyone who readsfree books is a freegan.

Lots are paygans.

Customers with Free Books The FreeganBronze-FWebsite Apr-10 Fiction e es es es es es es es es im im im im im im im im tim 1t 2t 3t 4t 5t 6t 7t 8t 9+100% free Number of Free Books in Library Customers with FreeBooks

Customers with Free Books eBook Training wheels The FreeganBronze-FWebsite Apr-10 Fiction e es es es es es es es es im im im im im im im im tim 1t 2t 3t 4t 5t 6t 7t 8t 9+100% free Number of Free Books in Library Customers with FreeBooks

Customers with Free Books eBook Training wheels The FreeganBronze-F “I Jane Austen”Website Apr-10 Fiction e es es es es es es es es im im im im im im im im tim 1t 2t 3t 4t 5t 6t 7t 8t 9+100% free Number of Free Books in Library Customers with FreeBooks

Customers with Free Books eBook Training wheels The FreeganBronze-F “I Jane Austen” “Freegans”Website Apr-10 Fiction e es es es es es es es es im im im im im im im im tim 1t 2t 3t 4t 5t 6t 7t 8t 9+100% free Number of Free Books in Library Customers with FreeBooks

1t im e 2t im es 100% free 3t im es 4t im es 5t im es 6t im esCustomers with FreeBooks 7t im es 8t im es 9-1 4t im es 15 Number of Free Books in Library -25 Customers with Free Books tim 26 es -50 tim 51 es -10 0t Mo im re es tha n1 00 tim es

1t im e 2t im es 100% free 3t im es 4t im es 5t im es 6t im esCustomers with FreeBooks 7t im es “Freegans” 8t im es 9-1 4t im es 15 Number of Free Books in Library -25 Customers with Free Books tim 26 es -50 tim 51 es -10 0t Mo im re es tha n1 00 tim es

Customers with Free Books Freegan Librarians “Freegans” e es es es es es es es es es es es es im im im im im im im im im tim tim im tim 1t 2t 3t 4t 5t 6t 7t 8t 4t 0t -25 -50 00 9-1 -10 n1 15 26 51 tha Number of Free Books in Library re100% free Mo Customers with FreeBooks

Customers with Free Books Freegan Freegan Librarians Hoarders “Freegans” e es es es es es es es es es es es es im im im im im im im im im tim tim im tim 1t 2t 3t 4t 5t 6t 7t 8t 4t 0t -25 -50 00 9-1 -10 n1 15 26 51 tha Number of Free Books in Library re100% free Mo Customers with FreeBooks

The Freegan*FreeganWebsite Apr-10 Fiction to Mar keting Res istant100% free

make reading better

know the reader,sales will follow.

Michael Tamblyn | @mtamblyn | mt@kobo.com

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Kobo: What Do eBook Customers Really, Really Want? (Michael Tamblyn at Tools of Change 2011)

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