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Publishers Become Retailers by Selling Online

October 20, 2005

FRANKFURT — Major book publishers have quietly begun selling directly to customers over the Internet, in a move that could transform the trade by putting them in competition with online retailers like Amazon.com.

The publishers, including Simon & Schuster, Random House and Penguin, claim to have limited retail ambitions and are simply trying to use their Web sites to help readers.

“We can offer features, services and guidance that might be difficult for another retailer to provide,” Penguin Group Chairman John Makinson said. “What we’re not going to be is competitors to Amazon or any other retailer in this area.”

Nevertheless, publishers have been none too thrilled about retailers like Barnes & Noble encroaching on their territory by self-publishing a range of books, including classics by Fyodor Dostoevsky and Mark Twain.

“The retailers have become publishers, so why can’t publishers become retailers?” said Pat Schroeder, president of the Association of American Publishers trade group. “It’s an experimental thing. Everyone’s trying to figure out what the right thing to do is.”

Indeed, publishers are struggling along with many of their media and entertainment peers to adapt to evolving technology that is forcing them to rethink their business models. The issue has been a hot topic of conversation at the Frankfurt Book Fair being held this week.

“The boundaries on publishing, retailing and distribution are getting blurred,” said Makinson. “We can’t rely any longer on the traditional assumption that we’re a publisher, he’s a retailer, we won’t retail, he won’t publish. We’ll have to accommodate one another.”

DISCREET MOVE

Random House, the world’s largest publisher of consumer books and a unit of German media conglomerate Bertelsmann AG, launched its online selling venture without fanfare this year, offering its entire catalog of titles in print.

It is giving no discounts, will not waive shipping and handling charges and only will send books to U.S. addresses.

Simon & Schuster, the book publishing arm of media conglomerate Viacom Inc., followed suit in September.

“We’re happy with how it’s been going,” spokesman Adam Rothberg said. “We never expected it would create an avalanche of sales, but it would have been foolish to pass up the opportunity to let visitors to our site buy a book they came to find out about.

“We feel like we’re offering a service and the immediate gratification to order the book right there and then.”

Amazon.com declined to comment and Barnes & Noble officials could not immediately be reached.

Romance novel publisher Harlequin was an early adapter, first selling directly in the nascent days of the Internet in 1995, the same year Jeff Bezos started Amazon.com.

Since rebranding the site on Valentine’s Day 2000, eHarlequin.com has sold millions of books with such racy titles as “Incriminating Passion” and “Silent Desires.”

Unlike its rivals, Ontario-based Harlequin does offer a 20 percent discount on all titles and in some cases free shipping.

But like other publishers, Harlequin prefers to shift the Internet conversation to other elements of its Web site, downplaying the notion that it might be poaching customers from the online retailers with whom it partners, and boosting its own profit margins in the process.

“I don’t think retailers are threatened by us at all,” Harlequin spokeswoman Katherine Orr said. “And they shouldn’t be.”




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