Those of us here in Europe have long been puzzled by Amazon’s go-slow international policy. I live in Stockholm, a wealthy city with a population that seems to be fond of their gadgets. Fancy laptops are everywhere, iPhones are ubiquitous, and iPads are becoming popular, despite high taxes and relative cost.
I have friends in Amsterdam, Warsaw, Munich, Prague, and Dublin who say the same thing. Only in London have Kindles started to make an appearance.
In Europe, the Kindle has only been officially launched in the UK and, just over a month ago, Germany. There, the Kindle is 50% more expensive than in the US. Plus, they haven’t bothered to translate the menus or instructions from English.
If you are outside the UK or the Amazon Germany countries, you must order from the US, pay customs surcharges, and it gets shipped with a US plug.
There are several issues holding back the growth of e-books in Europe, but instead of fighting them, Amazon is adding to them.
On top of the tax on e-books that Amazon is compelled to levy (which is 15% across the EU as Amazon can apply Luxembourg rates), they also add a $2 Whispernet surcharge if you are outside the official Kindle countries or Ireland.
This is added whether you own a Kindle or not. To all e-books. This kills the 99c market, and the lack of availability of cheap e-books holds back the e-reader adoption rate. And, of course, this charge is native to Amazon. Customers who purchase off Kobo, Smashwords, Sony, or Apple don’t have to pay it.
You would think this leaves the field wide-open for their competitors. However, most have been strangely slow to exploit this.
Barnes & Noble seem to have no interest in the international market. They don’t allow international self-publishers to upload direct to their store. Even stranger, they don’t allow international customers to purchase their books. You must have a US credit card.
Apple are selling a lot of devices in Europe. However, they seem to have little interest in actually selling books. When the first iPad was released, it wasn’t even shipped with the iBooks app – you had to go to the app store and download it separately.
It was only when it became the most downloaded app that they relented. Towards the end of 2010 they included it with all new iPads.
Even so, in their latest figures announced this week, the iBookstore has only sold 130 million books. That might sound like a lot, but it’s not. First, Apple have sold over 25 million iPads in the US alone, and over 100 million iPhones worldwide. Second, it includes free books.
Sony were early leaders in Europe, but have done little to maintain that position, and have slipped back considerably.
Until yesterday, the only company that seemed keen on contesting the international market was Kobo. They have made inroads into Australia, New Zealand, and Hong Kong, and have begun a roll out in Europe of local language e-bookstores in Germany, Spain, Italy, France, and the Netherlands.
Plus, they are shipping their e-reader with translated menus and instructions.
I know Amazon have a lot of balls in the air at the moment, but their international strategy seems all wrong. They have a wide open, fast-growing, largely virgin market, and they are ignoring it. I have long felt that a smart, fast-moving competitor could do them damage.
Some news from yesterday might wake them up.
Telefonica move into e-readers and e-books
Spain’s largest telecoms company, Telefonica, have announced the launch of their own e-reader and e-bookstore.
The e-reader will launch next week. It has a 6″ touchscreen, making it the same size as the Kindle 3 (and half the size of the iPad), and 2GB flash. The Wifi version will retail for 169 Euro or around $250. A 3G version will follow.
So why is this a big deal?
First off, the Spanish language market is huge, encompassing not just Spain, but every country from Mexico down to Argentina (excluding Brazil and Belize), totaling around 380 million people.
Telefonica might not be that well known in the US, but they are a huge global player – the 5th largest telecoms company in the world, with more subscribers than AT&T and Verizon combined. They own major carriers, broadband companies, and fixed-line operations across Europe and Latin America.
They are huge in South America, and own the second-largest carrier in Mexico, making them by far the biggest player in the Spanish-language market. They are also big in the Brazilian market (almost 200 million people), and have large operations in the UK, Ireland, Germany, and Eastern Europe.
The e-book market in Spain is very small, and the e-reader of choice is a smartphone. But a device this size, at this price, could change all that.
Now we have a telecoms company, with a huge network of stores across Europe and Latin America which will be pushing this e-reader, exposing e-books and e-readers to a whole new wide-ranging demographic.
However, Telefonica’s approach is not without its flaws. First off, it appears that this device can’t be used as a phone, and in any event, it’s probably a little large for comfortable calling.
If I was Telefonica, especially with Spain as my key market, I would have looked to develop something a little larger than an iPhone and a little smaller than a Kindle. I think somewhere in there is a sweet spot where you could have a killer device that could be phone, camera, e-reader, and browser, all-in-one.
If I was predominantly selling to a market where smartphones are the e-readers of choice, that would have been a major consideration.
Second, the choice of books is extremely limited. As Mike Shatzkin explained in a very thoughtful article yesterday, the history of bookstores shows us that the one with the biggest selection wins.
Telefonica is hoping to partner direct with the three largest Spanish publishers (Planeta, Random House, and Santillana), with the aim of building a catalogue of 1,500 books by September. The books are expected to be priced between 3 Euro and 12 Euro ($4.50 t0 $17.50)
That’s a tiny selection, and the books are priced way too high. Plus, the fact that they haven’t got these deals tied down yet is worrying for Telefonica.
Those same three publishers are combining to form their own e-bookstore which will operate both in Spain and across Latin America – in direct competition with Telefonica.
I can’t help but feel that if Telefonica had taken a more open approach, and allowed small publishers and self-publishers to upload directly, they would not only vastly increase the selection of titles available (and push down the prices), but they would also prod the Big 3 Spanish publishers into moving a little faster.
Competition is a spur, no doubt.
Hot on the heels of this news are rumours that Amazon is finally about to launch the Kindle in the Spanish language market (they are said to be hiring at the moment).
But why have they been so slow? Why do they willingly cede market share to competitors?
In terms of e-books, I don’t see either Telefonica or the Big 3 Spanish publishers’ combined effort becoming a big player. A closed system will never beat an open system. Amazon, Apple, and Kobo will just kill them on selection and price alone.
However, the e-reader could be very popular, and they have a global bricks-and-mortar retail network to push it. Time will tell.
Overall though, it’s great for readers. More competition will drive down prices, and should force Amazon to rethink its cautious international strategy.
Oh, and don’t forget, it’s more new markets for writers. Now, I must dust off that South American novel.
The Never-Ending Blog Tour
I dropped by fellow indie author Mary Pat Hyland’s diner for a chat this morning. Looking back at some of my answers, I think she might have put something in the coffee. Make your own mind up here.
EDIT: Telefonica changed the name of their carrier (and retail outlets) in Spain to Movistar, but the Telefonica name remains on many of the subsidiaries, and is still the name of the global holding company – just in case there is any confusion.