How Rakuten Kobo’s Michael Tamblyn Is Reimagining the Future of Publishing
Canadian Business is back. Today’s CB is all about profiling and connecting innovative leaders who are changing Canada for the better.
CB gives these leaders—and those who want to learn from them—the resources, networking opportunities, and inspiration to innovate, connect and continue to challenge the status quo. One of the ways we are doing this is through the Canadian Business Leadership Circle, CB’s leader-in-residence program where each month we engage a different C-suite-level executive making an impact in their field. As part of the program, readers will have the chance to connect with these execs for mentorship and professional development through exclusive content, virtual fireside chats and more.
Our leader-in-residence this month is Michael Tamblyn, president and chief executive officer at Rakuten Kobo. Tamblyn spoke with CB about the future of books, how the pandemic impacted the digital publishing industry, and how Rakuten Kobo is adapting for the future.
You’ve been a key member of Rakuten Kobo’s leadership since its inception in 2009. How did you get your start in digital publishing and bookselling, and what drew you to a company like Rakuten Kobo?
I had the privilege of coming into books through a legendary independent bookstore, The Bookshelf, in Guelph, Ont. where I worked while finishing a degree in classical music composition. After discovering that composing in Canada is a beautiful way to starve slowly, I got together with some like-minded, very gifted people including The Bookshelf’s co-owner. We started Canada’s first online bookstore, bookshelf.ca. That was later acquired to become Indigo.ca, and I went on to become Indigo’s first VP of online operations.
From there, more start-ups, some consulting, and then founding BookNet Canada, the not-for-profit technology change agent for the Canadian book industry. After six years as CEO, I was ready for something new right as eBooks were starting to gain traction. I got a call from my former boss, Heather Reisman, and her then-CTO Mike Serbinis, and visited the basement of Indigo, where the skunkworks that would become Kobo was first taking shape. Just like when we were starting bookshelf.ca, there was that sense of an industry on the verge of remaking itself, where there was a narrow window of opportunity for a new entrant to break out and go global. I jumped on board and the rest is history.
You became CEO in 2016 as Rakuten Kobo was undergoing an intense period of acquisition, restructuring and change. Were there any values that acted as a lodestar for you as a leader? What lessons did you take away during this period?
Rakuten Kobo is a perfect company for the intellectually restless. It sits at the intersection of so many of the biggest themes in technology and society right now: E-commerce; bricks-and-mortar retail; mobile; digital assets; hardware; and D2C and B2B. There were lots of considerations around international and regulatory nuance, supply chains and manufacturing, culture, content creation, publishers and authors, moderation versus curation and censorship versus free speech. Above all, I’m running a “born hybrid” 500-person company that has built a great culture with remote staff all over the world with offices in Toronto, Dublin, Darmstadt and Taipei.
Interestingly, the theme I kept coming back to is one that I took from music school: The awesome responsibility that conductors take on when they lead an orchestra. Yes, you study, train and work your way up to the podium, but then you find yourself in front of a group of people, each of whom have dedicated their lives to getting to that chair, who are striving to be the best that they can be. It’s your job to collect and focus all that expertise, effort and ambition to make something new and amazing. It’s not about you. It’s about being a lens or a conduit—the bottle in which you catch lightning.
How did COVID-19 impact the industry—globally and in Canada—and how did Rakuten Kobo respond?
Across all industries, about 20 per cent of businesses have been hit very hard and are really suffering. Around 60 per cent are getting by, or are as they were before, and the remaining 20 per cent had a product or a service that people wanted or needed during the pandemic. We were fortunate to be in that latter segment. It turns out that a lot of people want the escape or the depth of understanding that books provide.
That said, we also made some of our own luck. We had an early warning of the pandemic as it hit our factories in China and Taiwan. We also have a strong business in Italy, the first European country to experience the full force of the pandemic. During the first lockdown in Milan and Lombardy, we worked with the Italian government to distribute free eBooks to people isolating at home. Publishers donated books, and the government supported and promoted the initiative. Then we replicated it as each country had their own first wave of stay-at-home orders. We gave away more than 20 million books during the first six months of the pandemic.
For a lot of people, that was their very first exposure to an eBook, and it came at a time when bookstores and libraries were closed and when e-commerce sites were prioritizing groceries and PPE. I generally believe that people remember the companies and organizations that were there for them in times of crisis. We made a lot of new friends, many of whom have stayed reading with us even as restrictions loosened.
What trends in digital publishing have you observed since becoming CEO and how have these been augmented or accelerated during the pandemic?
The biggest trend—the steady transformation of reading from print to digital—is macro rather than micro. Now, about 20 per cent of all books purchased for personal reading are delivered digitally. It’s a different pace than music or video—evolutionary rather than disruptive—but inexorable all the same. If you agree with the idea that we probably won’t be pressing ink into dead trees to do most of our reading fifty years from now, then all we have to argue about is the slope of the curve.
In the meantime, the micro trends are fascinating. Ten years ago, an author was only an author if they had a publisher. Now, a quarter of the books we sell in Canada come to us directly from the author through our Kobo Writing Life service. Authors have flourishing careers and access to millions of potential readers with no publisher required. In 2010, the eReader was considered transitional technology, to be supplanted as soon as everyone had new technology like a smart phone or an iPad. As it turns out, a smart phone, with all its alerts and notifications, isn’t a great medium to get that feeling of escape or immersion that a book provides. And eReaders improved, with front-lit high-resolution screens, waterproofing, styluses, and an open notepad for writing in margins and capturing thoughts while you read. They became devices that encourage focus at a time when a lot of us feel like we have had enough distraction.
You’ve been speaking out about ageism in tech, and how platforms are committing a strategic error by ignoring older consumers. How is Rakuten Kobo designing products and services that are inclusive of older users, and what insights and benefits have you gained as a result?
This is a particular mission for me. More than almost any industry, tech is focused on youth. Speaking as a former young founder, our biggest blind spot is that we make products for ourselves and our friends. Only after our company has scaled up and we hire some marketers do we start thinking about demographics and customer cohorts. Even then, older adults fall to the bottom of the list. But founders and investors are ignoring the biggest demographic shift of the century, the biggest markets in the world getting older, more and more disposable income in the hands of those people aged 50 and older. Figuring that out was a matter of survival at Rakuten Kobo.
Books are the first analog-to-digital transformation that isn’t being driven by 18- to 25- year-olds, and our engine for growth is powered by 45- to 70-year-olds. When we bring in a new marketer, industrial designer or product manager, the first thing we say is: “If you want to know who our customer is, think about your mom or even your grandmother—you’re building for her.” This sounds weird for a company that is all mobile apps, hardware innovation, high-performance e-commerce and global marketing. But it works its way into everything we do, from usability and customer service to font selection and how keyboards on eReaders are laid out. There is still plenty more to do, but it is a big reason why we are doing as well as we have been.
What does the future of publishing, content and IP look like?
In the book industry, disruption happened between the author and the publisher. About 25 per cent of the books we sell don’t have a publisher, and the customer doesn’t care. The book they bought had a great rating, great reviews and was in a category they like. Self-published books chart on our bestseller lists and regularly outsell similar books by traditionally published authors. They are being written and published by individual independent authors who are contracting their own editors, hiring their own cover designers, outsourcing their marketing and doing everything themselves. Can you imagine how much angst would exist in the music or video industry if 25 per cent of consumption was being produced in garages outside of the traditional studio system?
What upcoming projects, initiatives or developments at Rakuten Kobo are you excited about?
We are booksellers at heart, so the joy that sits in the centre of this business is putting the right book in the right person’s hands at the right time. But there are two big developments that expand the notion of bookselling in interesting ways. Among the many media trends that were supercharged by COVID-19, there is the unmistakable rise of subscriptions. We all went into lockdown with one or two streaming services, and we all have a lot more now. The idea of buying individual movies or music tracks is being supplanted. We’re meeting that moment for eBooks with Kobo Plus, our all-you-can-read subscription service with more than a million titles to choose from. We’ve discovered that people read differently when you take away the uncertainty of a single purchase or the friction of availability with library borrowing. People are more adventurous in their choices, more willing to take a chance on an author they haven’t heard of, or to go deep into an area of nonfiction that interests them. It’s fascinating to watch.
The second is adding stylus and writing to eReaders with Kobo Elipsa and Kobo Sage. Writing on tablets has been around for years, and there are eInk devices that do a good job of imitating a piece of paper. But there is something freeing about being able to write in the margin of a book you are reading, to underline, asterisk, or circle a word. In many ways, our product isn’t an eBook or an eReader. It’s focus. Lack of distraction. The opportunity to follow a story to its conclusion or let one idea spark another without it getting blown away by a notification, of escaping the digital environments that ones you to click more, shift focus, be a little more anxious or outraged. Right now, that is definitely something we need more of.