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Sainsbury’s to Split up, Relaunch eBook Community Anobii as an eBookstore

sainsburys[1]The UK grocery retailer Sainsbury’s has just announced that the ebook community Anobii, which was acquired in June 2012, is going to be split asunder.

anobii-logo[1]According to a notice posted to the Anobii Beta website, Sainsbury’s is going to be taking over the beta website and renaming it as eBooks by Sainsbury’s. The beta site had been designed with the goal of introducing ebook sales to the Anobii website, so it makes perfect sense that Sainsbury’s would wish to make better use of their subsidiary. The notice goes on to state that the existing Anobii ebook community will continue to exist in its current form.

Here is where things get complicated. Sainsbury’s already has a very nice looking ebookstore called eBooks by Sainsbury’s. They even have apps for iOS and Android, and Anobii is credited for developing all three.  With that in mind today’s news is more of a consolidation than a simple renaming.

According to the Anobii blog, Anobii had been working to develop the Beta site and sell ebooks since at least May 2012, about a month before Sainsbury’s bought the 64% controlling interest from HMV Group. The ebookstore sells Epub ebooks (Adobe DRM) and was only open to UK residents at that time.

Now this is an interesting way to get into ebooks. Rather than partner with the juggernaut Amazon (like Waterstones) or the mighty mite Kobo (like WHSmith), Sainsbury’s is choosing to go it alone. They spent a pound to buy Anobii and then spent (I’m guessing) a few million quid in development costs. Sainsbury’s could have followed a similar path and partnered with B&N, but by going it alone this retailer might be in a position to make more money from selling ebooks than either WHSmith or Waterstones.

The thing is, Sainsbury’s won’t be earning the tiny commission that WHSmith and Waterstones receive from their respective senior partners. Instead Sainsbury’s is acting as their own retailer so they will be getting the full 30% retail commission on agency priced ebooks. Even with a smaller market share that could potentially be more money.

Of course, I don’t know that very many people are buying ebooks from Sainsbury’s yet (the apps have only a few reviews), so I could be reading too much into this.

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fjtorres January 23, 2013 um 4:38 pm

It depends on their brand strength.
They could easily hijack Nook, Sony, and Kobo ereaders through the back door. Theoretically, some brits might like the Nook hardware but be leary of the Nook ebookstore since B&N doesn’t have the brand loyalty that it has in the US. And recent bad news might scare some away from the ereader DRM.
Of course, anybody selling generic ADEPT in the UK needs to contend with Sony, Kobo, and Google.
(Not to mention Amazon, but realistically that is an entirely different world.)

Shamalamadingdong January 24, 2013 um 5:16 am

I love it when people who don’t develop websites come up with figures on costs. Few million quid? Where are you getting numbers like that? Presumably Anobii already had an in-house development team, and the site seems to be just a re-brand with less features than before (their target being more a store front than a social site). If you take those staff as running costs, then their spend was probably tiny.

Nate Hoffelder January 24, 2013 um 6:23 am

I thought the salaries, commercial software licenses, and server space would drive the costs up to around 1 million pounds. I overshot on purpose. It’s far easier to have cost overruns than to keep the costs down.

Shamalamadingdong January 24, 2013 um 10:25 am

I sincerely doubt they have any "commercial software licences" to pay. Server space is cheap as chips these days. Their development costs will be salaries alone.

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