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Amazon looks to cut publishers out of book business

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Online retailing giant Amazon is to try and to cut publishers out of its e-reader business model by acquiring the rights to a mass of new & old book titles, according to reports.

The Daily Telegraph says that the e-tailer believes it can cut out the “middle-men” and boost its margins by becoming a publisher itself and selling certain electronic titles exclusively via its Kindle device.

Amazon currently has a majority of the e-reader market, selling around 70 per cent of all digital titles, but competition is increasing with the latest version of Apple’s iPad hitting the shelves and the WHSmith-backed Kobo also proving popular.

Profits dropped dramatically for the retailer & online marketplace last year due to its huge investment in its Kindle devices, and this latest move is testament to how important it sees the e-reader market to its future.

“All we care about is the Kindle. Strategically, it is the number one priority, and the number two and three,” an Amazon source told The Daily Telegraph.

In a sign of things to come, Amazon has already bought the US rights to Ian Fleming’s James Bond novels, and it is understood that the global giant is in discussions with countless authors and literary agents to quickly expand the number of e-books it can sell exclusively.

Amazon has already fundamentally changed the nature of the publishing industry by providing wide reaching distribution and visibility to amateur or unknown authors who in the past may have been neglected by traditional publishers.

Senior Consultant at retail analyst group Conlumino Joseph Robinson, commented: “This has the potential to help Amazon, with its Kindle device, further tighten its grip on the UK books market. The move will allow the pureplay retailer to cut out the middle man, while inevitably also providing opportunities to offer exclusive material.

“Such a strategy is sensible against the backdrop of the rising penetration of Apple’s iPad, and WHSmith’s renewed focus on its alliance with Kobo.

“However, with relations between Amazon and some of the largest publishers deteriorating, in the long term the retailer should be wary to avoid a backlash from its perceived aggressive practices”.

Published on Monday 23 April by Editorial Assistant

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