Tuesday, January 8, 2019

Amazon will he save the book?

By Philbert Carbon.
An article from Iref-Europe


Amazon, to take just one example, is expected to achieve nearly half (48% accurately) of US online trade revenue in 2018. A revenue growth of 29% over to 2017 which places the firm far ahead of its direct competitors that are Ebay and Walmart. According to analysts of the sector, Amazon will capture, still in 2018, 80% of the growth of American online commerce.


With 540,000 employees worldwide and $ 250 billion in sales, Amazon, created 24 years ago, largely dominates its market. And nothing seems to stop him. For his only service Premium (Premium until very recently in France), the American company has 100 million paying subscribers in the world.

In France, where it was established in 2000, Amazon became the leading non-food retailer in 2016. It created 5,500 direct jobs on permanent contracts and was to create 2,000 new ones in 2018. Its six warehouses cover an area of ​​485 000 m2. In 2017, its accounts receivable assets in France were estimated at more than 24 million per month.


Let us point out, for those who do not know, that Amazon is also a marketplace (market place, in French), that is to say that the company sells on its site products for third-party traders. The latter, for a commission, use the Amazon sales area and, in return, benefit from its functionality and access to millions of potential customers. This activity accounted for 17% of Amazon's revenue in 2016.


Amazon is also online advertising, and services cloud who make up the group's cash cow. For example, online commerce accounts for only half of Amazon's profits versus two-thirds just two years ago.


Such success can only mean one thing: Amazon delivers the services that consumers expect. Why else would they rush to the US giant's website?

If Amazon today sells almost all products, this was not the case at the beginning of the adventure. The Seattle firm was, in fact, originally an online bookstore. If this product has become almost marginal in its turnover, it remains symbolic. So much so that if we asked the question in the street, it is likely that many passersby would associate the word book to that of Amazon.


Moreover, Amazon is regularly accused of killing French bookstores. What is it exactly?


A book market that works on the head


Let's start with some figures on the book market in France. This is relatively stable over ten years, since it lost 4% in volume between 2007 and 2016. Of course, according to the publishing sectors, the figures are mixed. Thus, the sales of dictionaries (-38%), maps and atlases (-31%), textbooks (-30%), fall significantly. On the contrary, certain segments are progressing: leisure and practical life (+ 16%), youth (+ 15%), history (+ 4%), comics (+ 3%). In 2017, sales volume decreased by 1% (and 1.2% in 2016). The market is therefore rather gloomy.

In 2017, more than 80,000 books were published in France (+ 4.2% compared to 2017), including more than 68,000 new and new editions. In this considerable production, only a few works have an exceptional circulation. In 2017, Asterix and the Transitalique sold 1.6 million copies, far ahead of the award winning books. Goncourt high school students sold 443 000 copies, Goncourt 398 000, Renaudot 220 000, Femina 83 000. Some authors also pull sales, as Guillaume Musso (1.5 million books sold in 2017), Raphaëlle Giordano (1.1 million), Michel Bussi (931,000), or Marc Levy (762,000).


The bestsellers are some trees that hide the forest of books. Indeed, in 25 years the number of new titles has been multiplied by 2. And if the average circulation of a book is a little more than 5,000 copies, some are only sold a few units since the number of different titles available in 2017 was 775,000.


The fact is that more and more books are sold only very few copies. Books with annual sales of less than 100 copies account for more than 90% of the growth in the number of references sold in the publishing market over the last decade, and those whose sales do not exceed the threshold of ten sales account for more than two-thirds (68%) of this same increase.


But how could it be otherwise as the publishing market produces more references each year and sales stagnate or even fall?


More than 100,000 copies of books are sold in quantities of 120 to 130, while those sold in very small quantities are still more numerous. This growth in low audience books can be partly explained by the steady increase in the number of publishers. In ten years, the number of small publishers has increased by 50%. This trend does not seem to stop. It is even reinforced by the digital which facilitates editing and self publishing.


This plethoric production, which drives a book on four with the pestle, is not without asking questions. Of these, two are of particular interest to us: how can the consumer be informed about editorial production? And how does he find the works he has heard about?


The multiplication of references favors online commerce


According to a figure dating from 2014, the media had spoken of just over 15,300 books, less than 20% of the books published. A large majority of books go unnoticed by the public.


Another way to discover books is to go to a bookstore or other point of sale. France lists 25,000 on its territory. The largest libraries offer about 50,000 references. An average bookstore devoted 100 m2 to books has only 15 000 references. And many points of sale have much less references, not having, such press houses and kiosks, as small areas.


Bookstores, with 22% of sales in 2017, are in second place. The first is held by large specialized cultural areas (25.5% of sales). In fourth place are non-specialized superstores (19%), ie super and hypermarkets with a relatively small book radius.


It will not be surprising then to find the third step of the podium, with 20% of the market, sales by internet. Because it is, a priori, the place where one can find the greatest number of works supposed to be available for sale.


Take the example of a Frenchman who hears about a book on the radio in the morning when he shaves. He is interested and he quickly notes the reference on a piece of paper. When he goes shopping at the supermarket, he does not have the paper on him and does not remember the title anymore. In any case, the choice is poor. "The best," he said to himself, "is to go to bookstores". He plans to move especially to the bookstore closest to his home the following Saturday. But the demonstrations of Yellow Vests make him give up his project. In your opinion, what does the reader do, now accustomed to having everything right away? He orders on the internet, for sure! And again this is a mediatized work. If it is a book that is recommended, an author and an unknown publisher, it will go on the web directly.


Muriel Penicaud, Minister of Labor, said on France Inter, about yellow vests, that"We are in the process of enriching American platforms, Amazon type, and meanwhile we kill small businesses that are already in survival mode for a few weeks." Words that Muriel Beyer, deputy executive director of the Humensis group (PUF, Belin), who confirmed at Figaro : "The numbers of the edition were already not excellent before the movement, and it is obvious that the Yellow Vests did not arrange things. People do not go much in stores, and therefore in bookstores, while the Christmas period is very important for publishing.


Amazon, an easy culprit


If book sales stagnate or even regress, the culprit is not Amazon first. The movement of the yellow vests is, hopefully, only an epiphenomenon. But it has probably pushed to buy on the internet new consumers who may take on this occasion new habits.


At least three other officials are to be quoted before the American giant. The French first, who read less and less for lack of time and because they devote their free time to other leisure. Nevertheless, 52% of French people have bought at least one book in 2017, and 91% say they have read at least one book in the last twelve months. But the big readers are becoming more and more rare and the young readers - potential future great readers - are also always fewer.


Other managers: the publishers themselves, who, by producing ever more books, force the booksellers to turn them on their shelves, undermining their cash (because the booksellers buy the books, then are credited books returned to the home). publisher who, meanwhile, has benefited greatly from the gap between billing and reimbursement). Some experts also claim that publishers give the booksellers insufficient margins (about 38% of the price of a book).


Finally, we would like to forget the public authorities who, on the one hand assault traders and tax artisans, and on the other hand try to drive the car out of the city centers, penalizing the physical trade.


Amazon, bookseller online, but also in store and same publisher


In the interview already quoted, Muriel Beyer stated: "I would say today that it's Amazon that sells books. He will probably be the Christmas winner for many other sectors ". Amazon would be more of a chance for publishing. It is an editor who affirms it!


Moreover, according to Professor Ryan Raffaelli, the Harvard Business SchoolAmazon did not hurt the independent bookstores in the United States, which grew by 35% between 2009 and 2015. It was rather the chains that suffered, like Borders or Barnes & Noble.


In France, according to Matthieu de Montchalin, president of the Syndicat des Libraires, who spoke in The echoes, "There is no excess mortality of independent bookstores". Here too, it is the chains that clink, such as Virgin or Chapter. And if the neighborhood bookstores resist, it is because they organize events, participate in festivals, trade shows, are always more attentive to their customers than they are loyal.


Let's show that Amazon has opened its own stores in the city since November 2015 in the United States. The twentieth Amazon Books has opened in Denver in August 2018. A space of 470 m2 with only bestsellers, a notation by stars as on the site, shopping facilities for members Premiumetc.


Amazon is publisher since with Amazon Kindle Direct Publishing (KDP), the American group offers the possibility to authors to publish their own books within 48 hours, without going through a publishing house. The authors are thus freed from the classic publishers who have often very long response times, who make a severe selection (98% of the manuscripts are refused) and who request the transfer of copyright for their benefit. Nothing like Amazon KDP gives free access to the platform and takes a percentage on each sale of books.


Finally, Amazon has saved bookstores old books or occasion of certain death. These have considerably increased their catchment area by putting it online. These sales now make most of their sales at the same time as the happiness of readers looking for rare pieces, often not found before.


It seems, then, that Amazon renders insignificant services to both authors and readers. Why then overwhelm this company with a new tax?


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