Waterstones (UK biggest bookseller) to sell Amazon's Kindle book reader

[elcreative]

Originally Posted by murraypaul

It would be suprising if Amazon felt that had to make that sort of concession (cut of each book sold). Kindles have a lot of retail presence in the UK, so it isn't as though this is breaking into retail for them.
Unless they just mean a cut of titles sold through the in-store wifi.

What in-store wi-fi??? You can connect to Waterstones store over the net wirelessly but none of the Waterstones I know have wi-fi available in the stores...

[fjtorres]

Originally Posted by elcreative

What in-store wi-fi??? You can connect to Waterstones store over the net wirelessly but none of the Waterstones I know have wi-fi available in the stores...

From the press release:

The agreement with Amazon will enable Waterstones to extend first class digital reading to its customers in-store. This will complement and strengthen the traditional attributes of the bookshops to which the company remains fundamentally committed.

The digital initiatives will build on the UK group's on-going investment plan to upgrade its 30-year-old retail chain. This incorporates a major refurbishment programme and other innovations including dedicated digital areas, free wi-fi access and new coffee shops, all planned for 2012.

http://www.waterstones.com/waterston...&awinaid=78888

Coffee shops, too!

The deal kicks-in by Sept so its a work in progress.

[Kali Yuga]

Originally Posted by Top100EbooksRank

I'm sure Waterstones will make a lot of money out of this. You don't shoot your own foot for no financial gains.

That's exactly what Waterstones has done.

Originally Posted by Top100EbooksRank

You don't invite your BIGGEST competitor to set up shop in your own store unless it makes financial sense for you.

For many years, Borders (US) did not set up their own website; they basically put a skin on Amazon's website. As a result, they were basically handing one of their biggest competitors a check and tons of user data every minute of every day. Along similar lines, they partnered with Kobo on ebooks.

Borders shut down last year. This wasn't the only reason why, but it certainly was a part of it.

In the short term, this is probably the best Waterstones can do. It would cost hundreds of millions of pounds to develop their own ebook reader, and it might never recoup the expenses. They could develop a tablet app, but would be hamstrung on the iOS platform.

In the long term, they've turned themselves into a showroom for Amazon, which is basically an inventive way of digging their own grave.

[elcreative]

Originally Posted by fjtorres

From the press release:



http://www.waterstones.com/waterston...&awinaid=78888

Coffee shops, too!

The deal kicks-in by Sept so its a work in progress.

OK, missed that... as a quote referring to the future... it seemed to be a present day point...

[ProfCrash]

I thought they were suppose to partner with Barnes and Noble so this comes as a huge surprise to me. I don't know that it is the kiss of death but it does not make a ton of sense to me.

At one point in time BN sold the Sony. That is where I first saw an e-reader and got interested in the idea. Granted, it was not well marketed and I ended up with a Kindle. My point? BN moved from selling the Sony to its own device. Perhaps Waterstone is working on something of its own and this is meant as a stop gap.

It still does not make sense to me. Unless this means that Waterstones will start carrying Mobi files and can sell books that can be read on the Kindle. Otherwise people are going to shop for their e-books from Amazon.

[fjtorres]

Originally Posted by ProfCrash

It still does not make sense to me. Unless this means that Waterstones will start carrying Mobi files and can sell books that can be read on the Kindle.

That is apparently what they're doing; setting up a website for Waterstone's customers to buy Kindle books.

[tomsem]

Originally Posted by fjtorres

That is apparently what they're doing; setting up a website for Waterstone's customers to buy Kindle books.

What is your source of this statement? The press releases make no mention of that. It's not an unreasonable conjecture, but I don't see why Waterstones could not continue to sell ebooks as before (in ePub/PDF format). They would not want to force their customers to get Kindles.

There is a sort of precedent for this sort of arrangement between competitors: Books-A-Million sells Nook (exclusively?) yet they retain their own ebook store and iOS/Android apps.

I don't pretend to understand how either the Amazon/Waterstones or the B&N/BAM deals are mutually beneficial...but it must be so. Perhaps Waterstones will get a cut of any ebooks purchased on the Kindles they sell.

[murraypaul]

Originally Posted by tomsem

What is your source of this statement? The press releases make no mention of that.

'As well as selling the Kindle device, Waterstones will allow Kindle users to digitally browse books and take advantage of Waterstones' special offers.

In a statement, James Daunt, managing director of Waterstones, said: "The best digital readers, the Kindle family, will be married to the singular pleasures of browsing a curated bookshop."'

[Top100EbooksRank]

http://www.thepassivevoice.com/05/20...e-chicken-run/

PG does not know any details of the Waterstones deal with Amazon, but here’s something he would have advised, had Waterstones asked for his help.

In addition to the discount from Amazon’s list price for Kindles that PG assumes any retailer would receive, PG would ask for a percentage of the sales price of ebooks sold through each Kindle account Waterstones originates.

Through its Amazon Associates program, Amazon is already willing to do this for any product it sells , paying between 4% and 8.5% of the sales price for items sold via Associates links (here’s more information). PG would just say, “Give Waterstones the same advertising fee you would give anyone else on sales Waterstones originates when it sells one of your Kindles.”

That way, whenever a Waterstones customer buys an ebook, Waterstones makes money. Instead of a lost sale, it’s new income.

Perhaps this has already been done.

The underlying strategy is to quit spending psychic energy and executive time trying to stop the Amazon tide and begin to figure out how to make money from Amazon.



Smart strategy actually.

The more Kindle Waterstones sell, the more $$$ Waterstones will get

1) from the Kindle device itself (profit margin)
2) a % of each ebook bought from the Kindle device that was sold at Waterstones





Waterstones has 4 choices

1) build its own ereader (this will cost hundreds of millions of USD, see Nook R&D expense for example. In addition, Waterstones will be competing against the Kindle in selling ebooks, which mean razor thin margin under wholesale It would makes sense under "no price competition" agency model with the guaranteed 30% cut but how long will agency last?)

2) partner with Nook
3) partner with Kindle
4) partner with KOBO

If it rules out #1, then which of the 3 partners will earn Waterstones the most $$$$? Look like, Amazon made the best sales pitch and won.

It is not in Waterstones interest to partner with Nook when Nook offer a worst deal.

[mr ploppy]

Originally Posted by gari189

Tesco's regularly sell the Kindles for £10 or £15 less than Amazon. Most people won't buy a Kindle from Waterstones - they can buy a Kindle anywhere and at cheaper prices, so even if they get a 50% cut its still poor income if they don't sell any.

Most of the money is to be made in the ebook sales and all of that will be going straight to Amazon, unless they somehow get a cut from Amazon downloads in Waterstones stores.

At a guess, Waterstones will get a cut for any digital sales that come from their IP range.

[HarryT]

Originally Posted by Top100EbooksRank

[I]PG does not know any details of the Waterstones deal with Amazon, but here’s something he would have advised, had Waterstones asked for his help.

Who is "PG"?

Waterstones has 4 choices
1) build its own ereader (this will cost hundreds of millions of USD, see Nook R&D expense for example. In addition, Waterstones will be competing against the Kindle in selling ebooks, which mean razor thin margin under wholesale It would makes sense under "no price competition" agency model with the guaranteed 30% cut but how long will agency last?)

2) partner with Nook
3) partner with Kindle
4) partner with KOBO

If it rules out #1, then which of the 3 partners will earn Waterstones the most $$$$? Look like, Amazon made the best sales pitch and won.

It is not in Waterstones interest to partner with Nook when Nook offer a worst deal.

I notice that you don't mention that Waterstones previously had a partnership with Sony. Any reason you don't think that has any future potential?

[fjtorres]

Originally Posted by HarryT

Who is "PG"?

PG = Passive Guy, the blogger in residence at the PASSIVE VOICE web site.
An IP lawyer by trade, reportedly.
It's an interesting blog covering publishing (mostly) from the writer's point of view. (At least in the time I've been dropping in.)

[MikeB1972]

Well, it will be interesting to see how they handle the changeover from epub to mobi.

When whsmiths formed a deal with kobo (I think the deal stated that smiths get a cut of all sales in the uk from kobo) your library was (more or less) transferred over to kobo which worked fine as it was selling the same ade epubs.

Now I'm guessing that a number of people (me, for example) shopped at waterstones as well as other places. This means that a bunch of your books will not be available for re-download if the library is moved over to the kindle - could be the first public backlash against drm as the public get scuppered when getting a new device (having part of their library in epub and part in mobi).

[fjtorres]

Originally Posted by Top100EbooksRank

Waterstones has 4 choices

1) build its own ereader (this will cost hundreds of millions of USD, see Nook R&D expense for example. In addition, Waterstones will be competing against the Kindle in selling ebooks, which mean razor thin margin under wholesale It would makes sense under "no price competition" agency model with the guaranteed 30% cut but how long will agency last?)

I remember a report from last year that Waterstone's was considering doing a walled garden of their own. Most of the commentary at the time was that they were at least one year too late.

Apparently they agreed.
It may also be that they've taken notice of the recent plateau-ing of reader sales in the US. Since UK adoption isnt all that far behind...

BTW, Waterstone's could have theoretically partnered with Sony...
...if Somy were interested in a tight partnership. (No way of knowing if Sony was even in the running.)

From the outside it looks like Sony only offers one model, a more limited ebook catalog, and higher operating costs as they also rely on ADEPT DRM and thus pay the Adobe Taxes.
Also, Waterstone's has been selling ADEPT epubs themselves (from before Sony launched their bookstore) so partnering with Sony wouldn't buy them any greater ebook share than they had before Sony launched their UK store, just the hardware revenue.

It might even be that Sony launching their UK epub store is what nudged Waterstone's towards Amazon.

If it is true that Kindle commands 80% UK reader share, they might be better off trying to get a piece of ebook sales from the Kindle pool than fighting Kobo and Sony for a piece of the 20% epub pool. And if Nook really shows up...

One could say Waterstone's is betting it is better to be a pilot fish than an anchovy.

[HarryT]

Originally Posted by MikeB1972

Now I'm guessing that a number of people (me, for example) shopped at waterstones as well as other places. This means that a bunch of your books will not be available for re-download if the library is moved over to the kindle - could be the first public backlash against drm as the public get scuppered when getting a new device (having part of their library in epub and part in mobi).

No bookstore guarantees to be able to keep your purchases available forever, Mike, and ePub books are not like Mobi books in needing to be redownloaded for a new device. Being a sensible chap, I'm sure that you have your ePub books safely stored in your ADE library?