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Daunt: 'tens of millions' going into Waterstones refit

The Waterstones decision to sell Amazon Kindles and e-books has provoked widespread discussion in today's national press, with many commenting on m.d James Daunt’s previous criticism of the internet retailer. Daunt has also revealed that owner Alexander Mamut is putting "tens of millions" into the Waterstones store refurbishment programme.

The Times says Waterstones has “embraced what many had thought was its self-declared arch-enemy” by agreeing to sell Amazon’s e-reading devices and e-books, comparing Daunt’s plans to refurbish stores with wi-fi areas to stores of Amazon’s US rival, Apple.

The article says Daunt’s move has “disappointed traditionalists” but features Daunt defending his move not to bring his own e-reader into stores, as he was rumoured to be doing with Barnes & Noble’s Nook. Daunt tells The Times: “The reality is that the investment you require to produce really compelling devices is enormous. Amazon were the first to start and have thrown about as large and unlimited a budget as its possible to throw – exercising it extremely well.”

In The Guardian newspaper, Daunt says partnering with Amazon to provide digital zones in stores will increase the sales of physical books and adds that Waterstones’ Russian billionaire oligarch owner Mamut is putting "tens of millions of pounds" into the store refurbishment programme which will see roughly 100 of its stores refitted this year.

“Digital is very much an adjunct to the reading of physical books," Daunt told the newspaper. "They in no way replace the pleasure from having a bookshelf at home, and the tactile experience of reading a physical book. This will complement and strengthen the traditional attributes of the bookshops to which the company remains fundamentally committed."

The Daily Telegraph suggests the arrangement with Amazon, to come to stores in the autumn, may lead to Waterstones offering “Kindle bundles” giving discounts on the e-book version of any hardback that a shopper bought, which Daunt said was a possibility. Daunt told the newspaper: “The whole focus is what can we do to give customers what they want? We have all sorts of ideas and we are talking to publishers about them."


 

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To me this is such a massive volte-face on the part of Daunt. It seems such an unequal deal. It's easy to see what Amazon get from it - branding and phyicality etc - but I can't really see how it benefits Waterstones longer term? Would the 'tens of millions' have been better spent on their own eReader? What happened to their talks with B&N and Nook? It all leaves a very uncomfortable feeling concerning the future of good bookshops.

It must have been a hard decision for James Daunt to swallow his pride and join the dark side, but it's a wise move. Whatever e-reader Waterstones could have come up with would be, at best, Betamax compared to Amazon's VHS. Amazon have saturated the market and taken ownership of e-books and e-readers.

Daunt knows that his shops are increasingly becoming showcases for Kindle e-book purchases - I've spoken to Waterstone's shop floor staff and heard how frustrated they are when 'customers' furtively tap book details into their smartphones, downloading the titles from Amazon. It's only going to get worse, so at least now Waterstones will generate some revenue from these people.

In an ideal world, the management of Waterstones would have seen the writing on the wall five years ago and followed Barnes and Noble's example, but they didn't, so James Daunt's options were limited.

The only way to challenge Amazon now is to develop an e-reader that is at least as good as the Kindle and effectively give it away, hoping to recoup the investment through future ebook sales. It's not a gamble I'd take.

Daunt's decision isn't a solution, but it's a damage-limitation exercise that may help the company contract to its natural size in a less destructive way.

The Bat says: Interesting to wonder how much of a cut Waterstones will get from eBook sales considering the author gets 70%...and how much from coffee sales? Will it be enough to recoup those tens of millions...?

Perhaps I misremember, but wasn't Waterstones' original online sales portal driven by Amazon, then ditched in favour of their own? So now we come back, full circle. Welcome to the Amazone...

To me this is such a massive volte-face on the part of Daunt. It seems such an unequal deal. It's easy to see what Amazon get from it - branding and phyicality etc - but I can't really see how it benefits Waterstones longer term? Would the 'tens of millions' have been better spent on their own eReader? What happened to their talks with B&N and Nook? It all leaves a very uncomfortable feeling concerning the future of good bookshops.

It must have been a hard decision for James Daunt to swallow his pride and join the dark side, but it's a wise move. Whatever e-reader Waterstones could have come up with would be, at best, Betamax compared to Amazon's VHS. Amazon have saturated the market and taken ownership of e-books and e-readers.

Daunt knows that his shops are increasingly becoming showcases for Kindle e-book purchases - I've spoken to Waterstone's shop floor staff and heard how frustrated they are when 'customers' furtively tap book details into their smartphones, downloading the titles from Amazon. It's only going to get worse, so at least now Waterstones will generate some revenue from these people.

In an ideal world, the management of Waterstones would have seen the writing on the wall five years ago and followed Barnes and Noble's example, but they didn't, so James Daunt's options were limited.

The only way to challenge Amazon now is to develop an e-reader that is at least as good as the Kindle and effectively give it away, hoping to recoup the investment through future ebook sales. It's not a gamble I'd take.

Daunt's decision isn't a solution, but it's a damage-limitation exercise that may help the company contract to its natural size in a less destructive way.

The Bat says: Interesting to wonder how much of a cut Waterstones will get from eBook sales considering the author gets 70%...and how much from coffee sales? Will it be enough to recoup those tens of millions...?

Perhaps I misremember, but wasn't Waterstones' original online sales portal driven by Amazon, then ditched in favour of their own? So now we come back, full circle. Welcome to the Amazone...