US threat to publishers

Giant online bookstore expands to Britain

IN A MOVE that threatens UK book publishing and retailing, Amazon.com - the "Earth's biggest bookstore" - is expanding into Britain.

The online bookstore is to establish a British depot to serve Britain and other European countries. This will significantly reduce the delivery times and costs of books from Amazon.com and make internet book-selling even more competitive in this country.

"Jeff Bezos, our founder, is interested in shipping books as swiftly and as cheaply as possible. We are planning for an international expansion," said a company spokeswoman.

Amazon.com currently lists 2.5m books, compared with the 150,000 to 200,000 stocked by a large British bookstore. It offers discounts of up to 40 per cent on American prices - which are already lower than their British equivalents.

Birthday Letters by Ted Hughes currently sells for pounds 14.99 at Dillons in Kingston-on-Thames, London - Amazon.com's price is pounds 8.50 ($14). Amazon.com discounts 400,000 books, cutting the price of paperbacks in the US market by 20 per cent and hardbacks by 30 per cent. Add in the generally higher cost of books here, and British buyers using the internet retailer stand to save 40 per cent on purchases.

The world's biggest online bookseller is enjoying phenomenal growth. Sales last year reached $148m, compared with $16m in 1996. Its customer accounts rose seven-fold to 1.5 million, and half its orders were repeats. "We intend to continue to invest aggressively in building our business and brand," said Mr Bezos.

Barnes & Noble, a bitter American rival of Amazon.com, has already announced it will be setting up a book depot for its internet service in Britain, after failing to find a superstore site in central London. Barnes & Noble, the world's largest bookselling chain, has been engaged in a price war with Amazon.com and offers equally competitive discounts through the internet.

The online retailers threaten to change the British publishing industry. General publishers fear that Amazon.com and Barnes & Noble could undermine margins on British books. Imports of American books from Germany already pose a threat to the regional copyrights held by British publishers and sold by their authors. Territorial rights could ultimately become unsustainable, creating one world market for English-language books. The great beneficiaries would be multinational publishers such as Harpers & Collins, Bertelsmann and Penguin.

Janice Hughes, director of Spectrum Strategy Consultants, fears that online bookselling could cripple one of Britain's important creative industries. She says: "Internet retailing will bring the globalisation process to publishing. The global market does not care where a product is made, the only thing that matters is price. It will undermine the local book industry and its links to creative talent."

Internet use is soaring in Britain and clearly set to become a mass-market retail channel. According to NOP, 9m adults will have used the internet by next June and usage by women and the important young adult consumer groups is soaring.

The trend will receive a further boost when digital terrestrial television is introduced by Carlton at Christmas. This technology will ultimately make the internet, currently restricted to 1.5m personal computers, available to 22m domestic television sets.

Bookselling is proving to be one of the great retail successes of the internet. Customers clearly like the wide choice and the discounts. Mr Bezos said: "Businesses can do things on the Web that simply cannot be done any other way. We are changing the way people buy books."

Browsing an internet bookstore is a different experience to a physical bookstore. Amazon.com and Barnes & Noble have extremely attractive websites, which offer newspaper book reviews, interviews with authors, images of dust-jackets, chapter-long excerpts and readers' reactions.

Above all, they are the best way to find a specific book. Clive Bradley, the retiring chief executive of the Publishers' Association, said: "There is cause for the conventional bookshop to worry. Their great advantage is that they are excellent for searching for books."

This advantage has enabled bookshop.co.uk plc, the British-based internet bookstore, to take off. Founded in 1993, the company, whose shares are traded on Ofex, claims to be Europe's largest internet bookseller. It offers only limited discounts and does not discount its list of best- sellers but has nevertheless seen soaring sales growth, recording 51,000 orders in the three months before Christmas.

Darryl Mattocks, managing director of bookshop.co.uk, said: "We are slightly larger than a large city-centre bookseller. We will be much larger than that by the end of the year." Mr Mattocks expects to have to reduce prices once Amazon.com and Barnes & Noble start offering discounts on British books. "The internet is inherently a low-cost selling channel, with much lower costs."

The arrival of Amazon.com and Barnes & Noble in the UK comes at a time of upheaval in British book retailing. WH Smith is to sell its Waterstone's chain to EMI, which will merge the chain with its Dillons and HMV chains. Borders, the US book-selling giant, has acquired Books Etc for pounds 40m and is to open an American-style cultural superstore offering books, CDs, cake and coffee on a 39,000 sq ft site in London's Oxford Street this summer.

The high-street chains and the book publishers will come under considerable pressure if, as Mr Mattocks believes, online retailers force prices lower and take 15 per cent of the pounds 2.5bn British book market.

Publishers are just recovering from the abolition of the Net Book Agreement in 1995, which has not proved the disaster anticipated as higher sales have offset the lower book prices.

Figures from the Office of National Statistics show spending on books rising sharply, and the advent of internet bookselling may not be bad news for all. The innovative marketing it brings could expand the book market even faster than is currently anticipated.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
Phillips Idowu, Stella McCartney and Jessica Ennis
fashionMcCartney to continue designing Team GB Olympics kit until 2016
Sport
Shinji Kagawa and Reece James celebrate after the latter scores in Manchester United's 7-0 victory over LA Galaxy
football
Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Sport
Farah returns to the track with something to prove
Commonwealth games
Life and Style
fashion Designs are part of feminist art project by a British student
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Junior Research Analyst - Recruitment Resourcer

£18000 - £20000 per annum + OTE £25K: SThree: SThree Group has been well estab...

Senior Analyst - Financial Modelling

competitive: Progressive Recruitment: This really is a fantastic chance to joi...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Commonwealth Games 2014: Great Scots! Planes and pipers welcome in Glasgow's Games

Commonwealth Games 2014

Great Scots! Planes and pipers welcome in Glasgow's Games
Jack Pitt-Brooke: Manchester City and Patrick Vieira make the right stand on racism

Jack Pitt-Brooke

Manchester City and Patrick Vieira make the right stand on racism