“Little deals often signal bigger things to come.”
The other day I heard a young author saying that book publishers had it all wrong, they spent too much time publishing new books and not enough time selling the ones that they had already published. Well, while I tend to agree that book sales are often built on publishers’ marketing dollars, rather than the quality of the product, or the author, consumers don’t buy books from publishers. They buy them in shops, or online, and both also have an incentive to sell and a big part to play in the sales process. Interestingly, the balance of power between the two is shifting day by day.
According to the Booksellers Association the number of bookshops in the UK has been in steady decline for 6 years. If you exclude supermarkets their membership has declined by 20% in that time and the total number of bookselling outlets has declined from 4496 to 3683. Sadly, last year my local childhood bookshop, the Harbour Bookshop in Dartmouth,Devon, closed too. When I was young it was actually owned by Christopher Robin, AA Milne’s son. As “bricks” have declined “clicks” have increased with sales of ebooks rising by 318% in 2010 alone and many predict that 50% of all books sold will be digital within 10 years. My guess it is something like 10% now.
Waterstones, the UK’s biggest bookstore with nearly 300 stores, has just announced that it will be selling Amazon’s Kindle and we will be able to buy ebooks from a local wifi network in each of its stores. Quite a turnaround this for James Daunt, Waterstones’ MD, who recently called Amazon a “devil”. In an interview with the Independent newspaper in December he branded Amazon a “ruthless, moneymaking devil”. He now seems to think that Amazon “would complement and strengthen the traditional attributes of the bookshops to which the company remain fundamentally committed.” So, why this Faustian pact?
In Aurora Leigh, an epic novel/poem by Elizabeth Barrett Browning, she suggests, in my headline quote, that the worst devil is a respectable one and Amazon is certainly very respectable these days. Arguably, ebooks still have to prove themselves and they have yet to cross Geoffrey Moore’s “chasm” to the mass market. Traditional “bricks” distribution would seem to be able to help a lot to speed this process up.
It was thought that Barnes & Nobles’ Nook ereader would be chosen by Waterstones, rather than the Kindle, but to my mind Amazon is a much better partner for one simple reason. Amazon dominates online book retailing which is rapidly substituting Waterstones’ traditional place in the value chain. As things become increasingly electronic Amazon will just become more powerful and at some point may even get closer, or even buy, Waterstones and other similar businesses around the world. This deal gives Waterstones a better, perhaps even its best, potential exit from the rather depressing but inevitable decline in its trade.
Even though we don’t know the commercial detail yet, Amazon is gaining significant control over ebook distribution in the biggest bookshop chain in the UK. I wouldn’t be surprised if traditional bookstores like this also morph into the public library space too over time, which is also rather prominently undergoing radical reformation in most western cultures.
Amazon is in control of this game and playing a rather smart hand. That Waterstones’ destiny is in the hands of this increasingly respectable devil is clearly signalled by this move.