From The Economist:
JAMES DAUNT, the managing director of Waterstones, once described Amazon as a “ruthless moneymaking devil”. On May 21st he announced a Faustian pact with the online retailer. Mr Daunt will not only sell Amazon’s Kindle e-reader in his stores, but will also streamline the process by which customers can buy Amazon’s e-books while they browse the shelves. The aim, he says, is to improve the Waterstones shopping experience.
Critics think he is mad, comparing the move to Sainsbury’s inviting Tesco to set up shop within its branches. Earlier noises about a partnership between Waterstones and Barnes & Noble, an American bookstore chain with a rival e-reader, could have created competition for Amazon. This deal, by contrast, seems to strengthen the internet giant. Amazon has already cornered some 90% of British e-book sales, according to Enders Analysis, which tracks the industry. Waterstones’ plan threatens to send yet more customers towards e-books and Amazon, reinforcing its stranglehold on the market.
. . . .
But Mr Daunt, who took charge of Waterstones last July, defends the deal by explaining that while readers like e-books, they also like bookshops, particularly those with well-curated choices, helpful staff, Wi-Fi and a café. He laments that Waterstones moved too slowly to launch its own e-reader, but insists it is now wise to accommodate the device most people prefer. Customers still buy print books, he adds.
. . . .
Though e-book sales are rising, Mr Daunt is gambling that they will level off at around a third or even half of the market. He can take heart from the music industry, says Benedict Evans at Enders Analysis. Though music is “the perfect digital medium”, there is still a decent, albeit declining, market for CDs—more than 86m albums were sold in Britain in 2011. “Books will be even more resilient,” he says. Publishers and sellers hope so.
Link to the rest at The Economist and thanks to Hunter for the tip.