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'Book chains are caught in a pincer movement'

13 March 2006

A session on 'Getting a focus on 21st century issues' at the London Book Fair, sponsored by Publishing News, put the issues facing publishers and booksellers, both in the UK and internationally, squarely on the table. Moderated by Tim Hely-Hutchinson, CEO of Hachette Livre, the panel discussed the major challenges currently facing the book trade.

Victoria Barnsley, CEO of HarperCollins UK, said that she felt that Amazon was a greater threat to booksellers than Google. Alan Giles of Waterstone's admitted that the bookseller did now need an online presence. It closed down Waterstone's Online some years a go and has since been relying on working through Amazon itself, which does not look like the best strategy in view of the online bookseller's rapid growth into a major competitor.

Agent Gill Coleridge also criticised Waterstone's for its emphasis on bestsellers and loss of the range which had in the past been such a distinctive feature of the chain. In effect the book chains are caught in a pincer movement, with Amazon at one end of the spectrum, offering range, and catering for heavy book-buyers who know what they want. The supermarkets are grabbing market share at the other end, led by Tesco, now capturing £1 out of every £8 spent on books. Giles said that it is unlikely that the supermarkets will abandon this policy, which is a good way of attracting people into the stores and showing their commitment to value.

Stephen Page, CEO of the leading independent Faber, thought that publishers needed to 'aggregate power' by building an alliance with the reader, citing Faber's work in this direction with its poetry list. Faber is the leader in the Independent Alliance of publishers working together to provide a powerful selling force for their books, with sales totalling £30 million.

It is an uneasy time in the book world, and this is especially true in the UK. Publishers and authors have every reason to be distrustful of the power of the chains and anxious about the decline in independent bookshops. Waterstone's attempt to buy Ottakar's has damaged both chains and is currently being considered by the Competition Commission. In the meantime Permira has just launched its second hostile takeover bid for Waterstone's parent company, HMV. Increasingly the market sees books as just another commodity, and one which can be sold by discounting like any other. It is in the bookshops that the battle for market share will be decided. But both Amazon and the supermarkets must be feeling pleased with their progress.