Category Archives: Blinkbox Books

Alas, Poor Waterstone's, I Knew Thee Well. The UK’s Biggest Bookstore Shuts The Door On Ebooks.

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The UK’s prestigious Waterstone’s bookstore chain (the British equivalent of B&N for those unfamiliar) has finally called it a day with its token ebook store, and customers have until mid-June to transition to Kobo.

I’ve been with the Waterstone’s ebook store since the beginning. It helped make one of my titles the eleventh bestselling ebook in the UK back in 2011, and while sales hardly compared to Kindle UK, they were well worth having.

That was then. In recent years Waterstone’s sales have dwindled dreadfully (to be fair possibly a reflection of my shift to children’s titles the last two years, which are generally less rewarding as ebooks) and it’s long since become clear the Waterstone’e book store had lost the will to live. Waterstone’s chief James Daunt knows a futile battle when he sees one. I’m just surprised it took this long.

It’s another notch on Amazon’s bedpost. Waterstone’s joins Sony UK, Nook UK, Txtr UK, Tesco Blinkbox and the subscription service Blloon in the Uk ebook graveyard, leaving token players like Hive, Blackwell’s and Lovereading to compete with the bigger stores.

The bigger stores being Amazon Kindle, of course, along with Apple and Google Play. In addition Kobo has both a localized UK store and a partnership with WH Smith.

The other small but significant player is Sainsbury, but no indie access to that store.

Playster is also in the UK with its subscription service. Indies can get into Playster through StreetLib and I’m expecting an announcement from Draft2Digital soon.

Future competition in this sector may come from subscription service Storytel-Mofibo (or whatever it will rename itself in the wake of the merger), and a subscription service with trad pub titles in number may well find a niche to compete with KU.

But safe to say that now, as opposed to if it had happened back in 2011, the closure of Waterstone’s ebooks will make a difference to no-one but the Waterstone’s clients who will be transferred to Kobo.

Alas, poor Waterstone’s ebooks, I knew thee well.

How well?

Back in 2011 my titles were topping the Waterstone’s e-charts and while Kindle was bringing in far more, of course, the Waterstone’s money was not to be sneezed at.

Bear in mind Kindle UK only kicked off in summer 2010 and ebooks were still a novelty and possibly a fad. In early 2011 you could top the Kindle UK charts with just 20,000 sales a month.

James Daunt only took over at Waterstone’s in May 2011, at which time the Waterstone’s ebook store (it still had a sensible apostrophe back then) was ticking over nicely. There was almost zero indies to compete with (I think Waterstone’s was Gardner’s supplied then – OverDrive came later) which meant the handful of indies that were in could do well.

Daunt took over an effectively bankrupt bookstore chain (backed by Russian money) with a token ebook store and rumour kicked off about a B&N Nook partnership. Clearly at that time Daunt was hedging his bets. He even dropped the apostrophe in the name of the store to make it more on-line-friendly.

No-one was sure what way the ebook wind would blow in the UK, but B&N’s straddling physical and digital with the Nook project seemed (back then – hindsight is a wonderful thing) as good a bet as any.

At that time the Waterstone’s store sold iRiver and Sony ebook readers and displayed them quite prominently.

Then came the surprise Kindle partnership – presumably an offer Daunt couldn’t refuse – to pre-empt the Nook partnership. Why Daunt took it is anyone’s guess, but I suspect Daunt understood the long-term conflict that B&N was later to face – that you can’t cannibalize your physical stores by promoting ebooks.

Under the original B&N model that wouldn’t have been an issue, because the ebooks and print books were all from the same supply base. No problem. Ebooks and print books sold in tandem and complemented one another.

The phenomenal rise of self-publishing tipped over that apple-cart, and instead of ebooks complementing the print titles, ebooks began to cannibalize print.

B&N exacerbated the problem with the self-pub portal, making it easier for indies to sell on the Nook platform (back then Smashwords was the only realistic alternative route into Nook).

Daunt possibly had the foresight to see that coming. After all, at least one indie in the Waterstone’s ebook store – no names mentioned – was outselling the biggest names in publishing and was the most searched for brand in store for three months solid.

I was disappointed to see the Waterstone’s ebook project effectively shelved. The store remained open, but hidden, and the Kindle partnership was never taken seriously. Kindle devices were never displayed to their best advantage and staff studiously avoided being helpful when customers asked about them.

From public statements by Daunt in the last year or so it’s clear the ebook store had dwindled to irrelevancy. He was going out of his way to belittle its impact, suggesting the revenue from ebooks wouldn’t buy a coffee at the Waterstone’s Costa coffee bar. Back in 2011 the Waterstone’s royalties I was collecting would have kept me in coffee for a year, and I drink a lot of coffee!

Even allowing for some exaggeration (de-aggeration?) by Daunt, it was clear the Waterstone’s ebook store was not pulling its weight.

How much that was market economics and the obviously powerful impact of the Kindle store, and how much deliberate policy by Daunt, is unclear.

By 2013 it was obvious Daunt had no intention of developing the Waterstone’s ebook store, and by 2015 obvious it was on borrowed time. The only surprise since is that he’s kept the Waterstone’s ebook store open this long.

I suspect Daunt has ideological as well as commercial antipathy towards ebooks, but all credit to him for turning around an all-but bankrupt bookstore chain to the pont where it’s now expanding, showing that print bookstores can thrive in the face of ebook and on-line print sales from a far bigger competitor.

Without the burden of the Nook – a valiant attempt by B&N, but one destined to fail because the two arms cannibalized instead of complementing one another – B&N might be in a far stronger position, as Waterstone’s is in the UK today.

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Where Next For Nook?

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When it comes to indecisive it doesn’t get much worse than the management of Barnes & Noble and what they are going to do with Nook.

As of summer 2014 it was definitely being sold off, and summer 2015 was the deadline. (LINK)

As of late February of this year it was definitely being kept. (LINK)

As print sales settle after the early disruption of digital it’s clear retailers like Barnes & Noble, along with the big publishers, are feeling more relaxed and confident than at any time since 2011-12, when one struggled to find an industry blog that wasn’t full of doom and gloom about publishing’s future.

How thing’s change.

There’s a new vibrancy and confidence in the industry as the shake-out’s new landscape becomes clear. Print sales are doing just fine, book stores are thriving. And ebook stores are thriving too.

Yes, there have been casualties. In the ebook field small players like Diesel, that simply couldn’t hack it, and unexpected casualties like the Sony Reader Stores and Tesco’s Blinkbox, both sacrificed because of problems at the parent companies.

And then there’s Nook.

While the Kindle store has probably been profitable for a good few years now (humungous market share in the US and UK, assisted by subsidized ereaders and tablets) Kobo is only expected to break even later this year, and Nook, while seeing its losses dwindle, is still far from profitable in its own right.

But with US market share at around 10%, tucking in behind Apple, Nook still is a significant player, and still has a lot to offer.

Barnes & Noble could, if Nook was such a dead loss as the naysayers would have us believe, simply call it a day, write off the Nook legacy, and move on. There is absolutely no point piling on the losses if there is no knight in shining armour on the horizon to rescue this damsel in distress.

So why hasn’t B&N just called it a day and shut shop?

Our guess is that B&N do see a knight in shining armour on the horizon. One (or one of several) with deep pockets and big ambitions, but not yet in a position to make a move. Perhaps they have already signalled interest. Perhaps B&N are just smart enough to see the way the wind is blowing.

You see, no matter how much we indies (and sadly it is largely we indies – still locked into this arcane us-and-them mentality that sees print publishers and print retailers as the enemy) ridicule Nook, the fact remains that Nook is a close-to-profitable business with a lot to offer a prospective buyer looking to gain a significant foothold in the US digital media market.

Not just a substantial customer base (who wouldn’t want 10% of the massive US market in a single grab?), but the marketing contacts and infrastructure (both US and UK publishers), and the not insignificant global potential.

At one stage Nook was fielding thirty or so international ebook stores, albeit only with a Windows 8 app. But it means they had the contractual infrastructure in place with publishers in those countries.

Nook also has a functional self-publishing portal across several countries and, slightly more controversially, a print and publishing services arrangement with Author Solutions. Plus of course some nominal digital media action beyond the ebook element.

Then there’s the existing range of Nook hardware in readers’ hands and the contractual infrastructure in place with manufacturers to build on same.

All of which collectively amounts to a significant package for a forward thinking, globally-minded, deep-pocketed operator with an eye on the US and international digital media markets.

Who might that be? Here at EBUK we’ve long been warning that the centre of digital gravity is shifting east, and it from the east we feel that Nook’s knight in shining armour will most likely come.

B&N’s management will not be unaware of the manoeuvrings of the big Chinese e-commerce titans as they gear up for global domination. If Alibaba is leading the pack right now, expect Tencent and JD among many to be not far behind.

And then of course there’s Rakuten, across the water in Japan. Any thoughts that Rakuten was regretting its buy-out of Kobo and was writing off ebooks were laid firmly to rest when Rakuten bought out the US and global digital distributor OverDrive earlier this year.

Nooks’ 10% US market share would make a fine addition to Rakuten’s US Kobo and US OverDrive presence, as well as both company’s substantial international reach.

The OverDrive buy-out, along with the plans for Viber, make very clear Rakuten’s vision for a digital future. More on the latter in another post shortly.

B&N’s management will surely be looking at these up-and-coming players – any one of which could buy Nook (and B&N itself) out of pocket change – and see the potential for a lucrative sale down the road if it can just get Nook back on the right path.

Getting by with Nook for another year, as B&N now appear to be intent on doing, may be more sensible than it at first appears.

 

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As Blinkbox Books Prepares To Depart This Mortal Coil, Kobo And Sainsbury Step Up Their Game. Txtr To Follow Blinkbox.

DiversifyIn20152015 is not off to a good start, with news that the ebook store Blinkbox Books and the audiobook store Bardowl are both folding. And as this post goes to press it looks like the Berlin-based ebook operator Txtr is insolvent. To which we can add continuing uncertainty over two of the Tolino Alliance stores in Germany, with a cloud hanging over the future of both Weltbild and Thalia.

But let’s keep things positive.

Too soon for any details on Txtr, so lwe’ll stick with Blinkbox and the silver lining in this news for indies.

With the tragic announcement that Tesco’s Blinkbox Books ebook store was to close, there was briefly some doubt about what would happen to its customers, but that problem, at least, has been resolved.

Kobo will be taking over the Blinkbox customer list in the UK, which will almost certainly see a boost in indie sales in the UK as Blinkbox readers see indie titles for the first time this March. Blinkbox was a trad-pub only outlet.

As well as the Kobo UK site, readers can buy from Kobo via WH Smith, which recently re-opened its doors to indie titles.

But Sainsbury have jumped in early to grab some of those customers. Sainsbury is the rival UK supermarket chain with an ebook store, and like Blinkbox owners Tesco, Sainsbury deals directly with the big publishers, so no indie access as yet.

For those still partying like is 2009, when high trad pub ebook prices meant an open goal for indies, it’s worth looking at Sainsbury’s latest newsletter today, offering 300 nectar points (worth £3.00 in-store) for an impressive run of trad pubbed titles at just £1.99 – well below what many indies are charging in the UK right now. (LINK) Throw in the nectar points and effectively you are being paid a pound to buy an ebook from Sainsbury!

Amazon will of course price-match, meaning more cheap trad pubbed titles on Kindle UK to compete with too. Hey, no-one ever said selling books was going to be easy!

For readers it’s win-win, at least in the short term.

For writers… Well, that’s down to us. No question things are harder nowadays, but also no question there are more opportunities for authors now than ever there was in 2009.

We all have the choice to sit back and pretend nothing has changed and nothing ever will… or to study the changes, look for opportunities that suit our particular circumstances, our genre niches and our readership ambitions, and seize them.

Those that do will likely still be around on the writing circuit to see what 2020 brings. Those that don’t…

Ebook Bargains UK

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Far more than just the UK.