Kobo CEO On The Future Of E-Readers And Google Books


Now that electronic readers have touchscreens, color support and can play Flash video, what’s next for these gadgets?

Kobo’s Reading Life app. The company plans to add additional social features and rewards to its e-reading software.
Michael Serbinis, Chief Executive of Toronto-based e-reading company Kobo, sees a future marked by innovations in social sharing and mobile commerce. He expects to see book purchases facilitated by social networking sites and to offer mobile coupon rewards to frequent readers.

Both services represent an evolution of current e-reader features, which thus far have implemented social networking as content-sharing, not purchases, and limited rewards to non-monetary prizes. Both ideas could increase the e-reader audience by expanding the ways and places to buy e-books and providing real-world incentives for reading.

“You will see social networks get into the content-selling business,” said Serbinis in an interview. He anticipates companies like Facebook will soon let members buy books, music and movies through their sites. Purchases could be paid for with Facebook Credits, the virtual currency payment system Facebook introduced in 2009, added Serbinis.

Kobo, Serbinis says, would benefit by being one of the e-book providers. The company already has a social networking feature called Reading Life that is integrated into Facebook. Kobo readers can use the site to share the books they are reading, see what their friends are reading, get book recommendations and compare reading statistics.

Though Reading Life was built with Facebook’s open developer tools, Serbinis contends that the site would be interested in working directly with Kobo. “Our investment in Reading Life makes us the most attractive e-book provider for social networks,” he said.

One of the most popular features of Reading Life is the ability to earn rewards for reading. Serbinis said Kobo will offer “awards with benefits” in the future. Someone who reads Kobo books a few times a week at a Starbucks, for instance, could earn a coupon for a free latte.

Such rewards may be Kobo’s answer to Amazon’s advertising-supported Kindle e-reader, which uses ads to subsidize the device. (Amazon’s “Kindle with Special Offers” costs $114, $16 less than Kobo’s latest e-reader, the Kobo eReader Touch. Kobo’s older e-reader, Kobo Wireless, is cheaper, however, at $99.)

“Rewards are offers, not ads, but we’re going to start there,” Serbinis said. Though Kobo has traditionally offered lower-cost e-readers than its big-name competitors, Amazon and Barnes & Noble, Serbinis downplayed the prospects of an ad-sponsored Kobo. The challenge, he noted, is that the people most likely to buy ad-supported e-readers may not be prolific readers. If users don’t spend much time on the devices, Kobo wouldn’t be able to sell many ads for them, he added.

Kobo isn’t averse to adopting other ideas from its rivals, such as color screens. “The next big thing will be color,” said Serbinis. Publishers, he pointed out, are beginning to make more color content like cookbooks and children’s books available in digital form. (There have been technical upgrades, too. EPUB, the e-book standard that Kobo uses, now supports the kind of fixed layouts found in many cookbooks and reference books.)

When the number of available color books reaches the tens of thousands, companies like Kobo will want to offer a color-enabled e-reader, Serbinis hinted. It’s an idea Barnes & Noble implemented first with its Nook Color, which was introduced in October 2010.

Some noteworthy features in the Kindle and Nook won’t be coming to future Kobo e-readers. Cellular connectivity is one. Bundling 3G with Kobo devices the way Amazon does with its Kindles would raise their prices and hamper sales. “Most people are okay using Wi-Fi,” said Serbinis. “3G is not a priority now.”

Nor are Kobo e-readers likely to sport built-in app stores like Nooks do. “We’ve stayed clear of app stores,” said Serbinis. “These devices are not designed for ‘Angry Birds’.”

Kobo will need more than a few buzzy features to climb from its No. 3 rank among global e-reader makers to its goal of becoming No. 1. Serbinis acknowledges that Amazon and Barnes & Noble enjoy advantages, such as household names and extensive distribution networks, particularly in the U.S. It’s one reason why Kobo has begun opening demonstration kiosks in highly-trafficked areas like New York’s Grand Central station. “Getting our brand recognized is important, both in bookstores and increasingly out of bookstores,” said Serbinis. “We will do more kiosks.”

One rival that doesn’t trouble Serbinis is Google Books. Though the search giant announced the first dedicated Google Books e-reader yesterday – the Story HD manufactured by South Korean electronics company iRiver – Serbinis believes Google will remain a niche player in e-readers.

“Google is launching in a market that already has advanced services like apps, commerce and gifting,” contends Serbinis. “It takes more than a giant database of books in the cloud and a Web interface to build a leading e-reading business.”

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