September 22, 2016
Another UK player bows out of the ebook market…
by Nikki Griffiths
Back in May, we reported that Waterstones would stop selling e-books directly from 14th July and would instead be partnering with Kobo.
Only two months later and (rather recent) history is repeating itself. This time it’s UK supermarket giant Sainsbury’s who will be closing their “Entertainment on Demand” business, which incorporates e-books, also choosing to partner with Kobo instead of selling directly. Planning on completely discontinuing services by 1st December 2016, they issued the following PR statement earlier this week:
Over the last four years we have enjoyed providing our customers with eBooks, MP3 music, digital magazines, and movies and TV on demand. We have made some great progress and learnt a lot about the digital entertainment market. However, following a detailed review of our service we have made the difficult decision to close Sainsbury’s Entertainment on Demand and focus on our core businesses.
Sainsbury’s first began selling e-books back in 2012, when it purchased majority shares in start-up ebook company Anobii. And it was only in March this year that Sainsbury’s snapped up Nook’s UK business when Barnes & Noble, the US bookseller behind the Nook brand, decided to pull out of the UK. The BBC reported the news at the time, quoting CCS Insight analyst Ben Wood: “It’s pretty tragic — it shows that Amazon is the powerhouse in the e-book market despite the best efforts of everybody else… But it’s a sensible move — if it’s clear that the growth opportunity doesn’t exist, it’s better to pull out of the market than keep flogging a dead horse.”
Sainsbury’s also follow in the footsteps of Tesco, the largest supermarket chain in the UK, who sold off their online video service Blinkbox Movies to mobile operator TalkTalk, Blinkbox Music to streaming business Guvera, and Blinkbox Books, their direct-to-consumer e-book offering, to Kobo in 2015.
It does feel a little as though Kobo are picking up the crumbs Amazon cannot be bothered to clean. Amazon maintains absolute dominance in the UK with an estimated 90-95% of all e-book sales. Their growing self-publishing business certainly contributes to their stranglehold on the market, with self-published ebooks now making up 22% of all e-book sales, compared to 14% in 2012, according to a Nielsen report compiled this April.
Competing with Amazon and Kindle might seem like a losing battle, but I can only applaud any company that continues to fight against the “empire.” Good luck, Kobo, and please don’t leave us!
Nikki Griffiths is the managing director of Melville House UK.