How German Booksellers Are Responding to the Digital Challenge

In German Buch News by Guest Contributor

This article originally appeared in Über:blick — German Book Industry Insight, a publication produced by the Frankfurt Book Fair. DOWNLOAD: the complete Über:blick issue (PDF).

By Tamara Weise

The Internet has changed everything — from the way people use media to their buying habits. For many Germans, finding out more about a book online and also buying it on the Web has long become as normal as having a cup of coffee with breakfast. Additionally, customers can now access for free online information for which they previously had to pay. This is creating a drain on sales which, say many, will never be recouped. The fact is that traditional bookstores, both large and small, spent a long time hesitating before putting together their own attractive alternative to the likes of Amazon — yet now they’re busy making up for lost time.

digital media frankfurt book Fair

Digital media at the Frankfurt Book Fair. © Peter Hirth / Frankfurter Buchmesse

Groups Opt for Multichannel Concepts

Another new store here, yet another one over there: for a few years, it looked as if the largest book chains’ trend toward expansion knew no bounds. This all came to a shuddering halt in 2008. Since then, the chains have been growing at a significantly slower pace and have even pulled out of some locations entirely. Their main problem: the Internet.

The book chains are therefore leaving no stone unturned when it comes to increasing their reach on the Internet. They are turning to multichannel approaches — setting up Internet terminals in their stores and expanding their online outlets. They are active on social networks, maintaining blogs and communities, offering online reading excerpts, and integrating videos. And what they’re also doing is investing in the business of e-books and e-readers — especially Thalia and DBH (whose brands include Hugendubel, Buch Habel, Heron Jokers, Weiland, Weltbild and Wohlthat).

The European e-book market is facing an imminent breakthrough, and brick-and-mortar bookstores must change to meet the needs of a digital marketplace.

With this aim in mind, Thalia, in particular, has forged a Europe-wide alliance. Working together with Chapitre, a subsidiary of the Direct Group France (Bertelsmann), the Dutch chain Selexyz which is active in Poland and Ukraine, the company has developed an e-reader, the OYO. The reading device has been available exclusively from the partners of the alliance since the end of October 2010 (prices start at €139). Those who purchase it receive mobile access to thousands of e-books. In the case of Thalia, that number is even in the hundreds of thousands. “The European e-book market is on the cusp of its breakthrough moment and will develop just as rapidly as it did in the USA,” said Thalia CEO Michael Busch with customary confidence during the presentation at the Frankfurt Book Fair. “In Germany alone, we calculate that e-books will account for 10 per cent to 15 per cent of sales in 2015.”

Carel Halff, head of Verlagsgruppe Weltbild and a member of the DBH advisory board, is familiar with such forecasts, but would rather focus on the here and now. “E-books have, in reality, been a non-existent market in Germany to this point,” he explained in an interview (Wirtschaftswoche, 5 Oct. 2010). The catch, in his opinion, is that very few e-readers have hitherto been sold — and on top of that, they have also been of little use because of a lack of attractive content. “The range of titles available from German publishers is much too meagre,” he criticised. “There are currently only 40,000 titles available — but for the average user, e-readers will only become interesting when there are at least 300,000 to 400,000.” That number of titles will be available in summer 2011. For this reason, Weltbild is initially striking from another direction: the company, which has its e-book store supplied by partner, is selling the first e-reader priced under €100 (Aluratek Libre, €99.99; available since October 2010).

This is unlikely to bother Thalia, which is taking a different approach: The retailer is bidding to take both the technology (OYO) and content into its own hands. In order to present a product line in its online shop, which will stock over 40,000 German e-books from the very outset, Thalia has acquired titles from the widest variety of sources available in the market — including international suppliers. This was the only possible way to launch a promotional tour featuring hundreds of thousands of titles.

Independents Cooperate with Service Providers

The small, owner-operated bookstores continue to approach the hype surrounding the e-book with caution. They have, however, started to overcome their initial timidity. The question that booksellers are posing today is no longer whether they should be entering the digital content business but, rather, how they should be doing so. Little by little, they are seeking to find their own way in the digital world — and service providers are helping them.

The independents are, in fact, now being inundated with offers from all sides: from the wholesalers (KNV, Libri, Umbreit), from download platforms and, commencing in 2011, also from market research firm Media Control (through Ceebo) and Google (through Google Editions). In a word, a huge wave is engulfing the book trade — but libreka! remains a beacon among all of these offerings. The industry platform has been developed collaboratively over the past few years under the umbrella of the German Publishers & Booksellers Association’s subsidiary MVB.

The linchpin for most of these strategies is the website of the bookseller, to which an e-book store can simply be attached (white label solution). If that is not enough, retailers can choose from other models. Take the Libri model, for example: the wholesaler has now negotiated exclusive contracts for proprietary e-book shops with two device manufacturers, Acer and Samsung. Booksellers that want to sell their customers the Acer Lumiread e-reader or the Samsung Galaxy Tab, a tablet PC, now benefit from their downloads at the same time — because the e-book store integrated into the devices refers customers to them (individualised shop).

Tamara Weise is an editor for Börsenblatt. Wochenmagazin für den deutschen Buchhandel.

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