Amazon to acquire The Book Depository, Pearson to acquire REDgroup online

By | 4 July 2011 | 12 Responses

I was going to post on the Pearson acquisition as part of our regular Tidbits post, but I know that many Aussie romance readers will find the Amazon acquisition of great interest, so I’m posting these two bits of news out of schedule.

Amazon and The Book Depository

I just saw this on Twitter (via @kate_elham), but it looks like Amazon will be acquiring The Book Depository, subject to all the legal stuff that has to happen for the acquisition to go ahead. I couldn’t find a direct link to the Amazon media release, but I’m assuming it won’t be long now.

UPDATE #1: Eoin Purcell speculates on his blog that one of the reasons for the acquisition could be to build a better market position in Australia. Wow. We matter! *happy sob*

UPDATE #2: On Twitter, TBD has stated that ‘The Book Depository will continue to operate independently.’ Then again, it’s early days yet. (Or no days, given that the sale hasn’t happened yet.)

UPDATE #3: Philip Jones at Futurebooks makes this comment: ‘[TBD] is big in those areas where Amazon isn’t, and in Australia competes head-on, with some success. Most importantly, it has established networks and routes into those countries, which Amazon simply does not. And I suspect it is these, rather than the turnover, that Amazon is most interested in.’

This is something that came up in one of the panels I attended at the 2011 Australian Romance Reading Convention. I believe Christina Lee from Mills & Boon brought it up. Here’s an excerpt from the tweet feed (I’ve removed off-topic tweets):

@BookThingo: The reason Book Depository is really cheap… Started with ex-Amz ppl. They use extra shipping container space to do free shipping #arrc2011

@BookThingo: Speculation that Amazon will one day buy Book Depository. Shock! Horror! No more free shipping! #arrc2011

@SuzsSpace: @BookThingo Really? What about their shipping rates through Royal Mail? What do they pay #arrc2011

@melscott: @BookThingo Book depos also gets UK govt subsidy for shipping, I think? #arrc2011

@BookThingo: @SuzsSpace No idea. That was from the publishing people. #arrc2011

These were some of the responses (I’ve removed off-topic tweets):

@bookbinge: Would be BAD! RT: @BookThingo: Speculation that Amazon will one day buy Book Depository. Shock! Horror! No more free shipping! #arrc2011

@ReneeRBA: Noooo. >.< RT @bookbinge: Would be BAD! RT: @BookThingo: Speculation that Amz will 1 day buy Bk Depository?No more free shipping! #arrc2011

@genrelibrarian: RT @BookThingo: Publishers constantly underestimating their readers. US readers don’t just read US setting! Risk averse industry. #arrc2011

@obsidiantears83: RT @BookThingo: Speculation that Amazon will one day buy Book Depository. Shock! Horror! No more free shipping! #arrc2011

@UGOTGOT: This must NEVER happen RT: @BookThingo: Speculation that Amz will 1 day buy Bk Depository?No more free shipping! #arrc2011

Clearly this is a concern for a lot of readers, especially those in smaller, protected markets like Australia. If free shipping disappears, we will be deeply unhappy. But if Purcell is right, it may mean that Amazon is seriously looking at officially entering the Australian market.

On the other hand, I know many independent Australian booksellers attribute the decline of their market on The Book Depository, much more so than Amazon. I wonder how they’re taking the news. I also wonder what publishers are thinking, especially those with parent companies overseas.

Pearson and REDgroup online

According to BOOKSELLER+PUBLISHER, Pearson will be acquiring REDgroup’s online business, including Borders and Angus & Robertson. There seems to be some change to the agreement with Kobo. I don’t know what it means, but it sounds like the link between Kobo and Borders/A&R will be less tight than it used to be (my interpretation only). No decision on loyalty programs, yet. Lucky I kept my loyalty card!

What’s probably of more concert to the industry is that a publisher now owns an online retail shop. My understanding is that publishers have so far been careful not to upset retailers by undercutting them on online pricing. The Pearson acquisition many seem ominous to bookshops. I don’t work in the industry, so I don’t have any insights. I guess we’ll see how it all develops—there’s a Twitter hashtag already: #REDgroupPearson.

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Kat

Killer of Fairies
Kat Mayo is a freelance writer, Twitter tragic and compulsive reader. She is the editor of Booktopia's Romance Buzz and hosts the Heart to Heart podcast for Destiny Romance. Her articles have been published in Books+Publishing, the AWW Challenge blog, and the ARRA newsletter. Kat firmly believes in happy endings. She kills fairies with glee.

12 comments »

  1. Edie

    I’m not sure where the idea came from that it about us.. Amazon has never really been interested in us before. Unless it the Royal Mail shipping rates and other schemes BD has in for cheaper postage. Unless BD has some interesting numbers about Australian buyers that have suddenly caught Amazon’s eyes??
    Though I think I am leaning more to the fact that BD was grabbing some of their market share, US and international, and they want it back.

  2. Kat (author)

    I think it’s Purcell’s speculation via his blog and via Twitter. He adds a few more thoughts on Australia in the comments to his post.

  3. Edie

    It’s also on one of the yahoo finance pages, and I think one of the Irish publisher/bookseller blogs as well.
    But will head back to his comments.

  4. Kat (author)

    Purcell is an Irish publisher/publishing analyst — might be the same source?

  5. Marg

    It will be interesting to see what happens with this. If Amazon fundamentally changes anything about the way The Book Depository operates (ie free postage) then many people will be looking for another new source of books.

  6. Kerry

    I’m almost exclusively an ebook reader these days anyway. If I can no longer buy books from overseas with free shipping they will simply become too expensive for me to purchase. All that will happen is that (perhaps with very few exceptions) if I can’t get it in paper I won’t buy it at all. Lost sales all round.

  7. Edie

    The more I think about it, I don’t think they’ll lose the free shipping.
    I guess my main concerns are really to do with the slice of market BD will give Amazon.
    P.S. Kat you were right, they are one and the same peoples. *blush* Teach me not to look more closely at the articles.

  8. Nomes

    eep (!) bummer. have to wait and see what happens, eh?

    i love TBD for books that Aussie publishers do not pick up ~ can get so many titles there. i also use BETTER WORLD BOOKS which has free world wide shipping and prces comparable to TBD (plus second hand books)

    thanks for the info

    x Nomes

  9. Kat (author)

    It’s going to be interesting too see if the Australian government will intervene, given that local bricks and mortar bookshops have to apply the GST and comply with PIR, whereas Amazon+TBD don’t…and they’ll potentially have the biggest share of the market.

    Also, an update to the Pearson news: The ABA has asked the ACCC to investigate the acquisition on the grounds that it’s anti-competitive.

  10. Edie

    I am pretty sure the Govt won’t step in on the BD/A thing. I am pretty sure BD etc were all part of the pitch to get rid of PIR. And that didn’t fly.

  11. Kat (author)

    PIR needs a revamp to keep up with technology. The 30/90 rule is waaay too long to wait for a book. And I think many Aussie bookshops are desperate for a decent ebook wholesaler to compete with Kindle, TBD, etc.

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