Amazon Opens Kindle Stores In Spain & Italy, Abolishes Surcharge

Amazon opened Kindle Stores in Spain and Italy this morning, to add to the existing stores in the US, the UK, Germany, and France.

The basic Kindle model is on sale in both countries for 99 Euro – the price difference with the US arising from 15% VAT (EU sales tax), and the lack of a subsidized, ad-supported model.

In both stores, the Kindle is being marketed heavily as a Christmas gift item, with its launch taking over the home page of both Amazon Spain and Amazon Italy.

As with the launch of the French Kindle Store last month, the new Kindle Touch and Kindle Fire models are not available for purchase at this time. Indeed, given the amount of content deals that have to be in place for newspapers, magazines, movies, and television, I wouldn’t expect that to change any time soon.

Spanish and Italian customers will be able to purchase most of the items in the US Kindle Store (excepting those titles where the publisher doesn’t own the rights for Spain/Italy), as well as new, local-language content (some of which will also be available in the US, again, depending on rights).

In the case of Spain, there are over 22,000 Spanish language titles, around 1,500 titles in Basque, Catalan, and Galician, and approximately 1,000 free classics in Spanish. Amazon’s press release claims that they have around two-thirds of the local bestselling titles, indicating that some content deals are yet to be closed out. As for Italy, there are 16,000 local-language titles.

There is more welcome news for Spanish and Italian readers. As with the launch of the UK, German, and French Kindle Stores, the $2 surcharge that Amazon levies on e-book purchases from most international countries has been abolished.

This means that Spanish and Italian customers will have widespread access to very cheap e-books for the first time. Most of these, however, will be coming from self-publishers. E-books from the major Spanish publishers are generally priced between $10 and $14, with some higher profile releases costing up to $22. Italian prices are slightly lower.

Under Spanish law, print book prices are fixed by the publisher for the first two years, with Amazon only able to discount by a maximum of 5%. As with Germany, there is some dispute as to whether this law applies to Spanish digital content, but, for now at least, Amazon have agreed with local publishers that e-books will be priced at 30% less than the print editions.

Local competition

While the markets are small in both countries, Amazon faces significant local competition.

Casa del Libro – the leading Spanish bookstore chain – is estimated to have around 45% of the e-book market. They were purchased by Grupo Planeta – one of Spain’s Big Three – in 1996 and have a well established e-bookstore.

The rest of the digital market there is largely divided between FNAC (who have recently signed a partnership in their home country of France with Kobo) and the retail giant El Corte Inglés.

But there will also be competition from players outside the book trade – huge companies such as Telefonica.

The limited information I have on the Italian market seems to suggest that the market there is more splintered, with publisher-owned e-bookstores taking up a significant share.

In both Spain and Italy, Amazon won’t have as much freedom to compete on price (because of the above-mentioned restrictions). Cheap devices, however, which tie readers to their store, should see them make up ground quickly.

Self-publishers

For self-publishers, it’s two new markets where Amazon’s 70% royalty rate will apply. Previously, in both countries, Amazon applied the $2 surcharge – which had a dampening effect on growth (along with the lack of availability and high relative cost of devices).

Also, for sales in these markets, Amazon only paid self-publishers 35% on the pre-surcharge price, meaning that a book priced at $2.99 would retail for $5.74, but only earn $1.05 in royalties.

From today (as with France and Germany), the minimum price for the 70% royalty is 2.99 Euro (inclusive of VAT), earning self-publishers roughly 1.50 Euro (approx $2) per sale. In short, you will earn double the money per book – and you will be twice as likely to sell, as your book will be considerably cheaper.

Most self-publishers won’t see significant Spanish or Italian sales any time soon. Both markets are well behind the German market, which is itself at least a year behind the UK market. Happily, Amazon seem to be rolling all the Euro currency markets together in terms of meeting minimums and paying royalties.

As English-language reading is low in both countries, the greatest potential is limited to those who can arrange translations of their work. While the Italian and Spanish book markets are similarly sized, any translation efforts will probably remain focused on Spanish, given the huge potential markets in Latin America and amongst US-based Spanish speakers.

For self-publishers who want to maximize their footprint in Spain, they should note that they can get distributed to Casa del Libro through Xinxii (ISBN required).

On a personal level, I was gratified to see that the early Kindle bestseller list in Spain had five historical fiction titles in the Top 10 (the rest were three thrillers and two non-fiction titles). While the market is too small – and the store too new – to draw any conclusions, that’s something I would never expect to see in the US.

Finally, Spanish self-publishers are already getting in on the act. Award-winning journalist and author Rosa Montero has signed an exclusivity deal with Amazon for several titles she self-published through KDP. In addition, leading newspapers El Pais & La Canguardia have also brought out their own short-form titles – cutting out local publishers.

Cheap, local content, allied with much cheaper devices should help both markets grow dramatically over the next few years.

Where’s next?

Amazon opened the first ex-US Kindle Store in the UK in 2010. This year has seen the opening of four more in France & Germany, and now Spain & Italy.

The latter two had been flagged for some time. When the latest generation of Kindle models were launched, new foreign language options were included for UK English, German, French, Spanish, Italian, and Brazilian Portuguese.

Speculation will now turn to Brazil – which is unsurprising, given it’s a booming economy of almost 200 million people. It also has a severely underdeveloped bookstore infrastructure (many books are sold door-to-door – which has proved surprisingly effective). And while the digital market is tiny at present, it is leading the way in the region.

A big disappointment in today’s announcement, for me at least, is that Spain’s Kindle Store will not serve hundreds of millions of Spanish speakers in Latin America, especially considering that there are less territorial issues as Latin American rights tend to be bundled with Spanish rights. There are widespread reports that Argentine, Chilean, and Brazilian Kindle Stores will open in 2013.

However, I think it could be sooner than that. The above speculation comes from an Amazon executive’s comments at the recent Santiago Book Fair, where he flagged the opening of those stores within eighteen months, suggesting 2013 is the outer limit.

All the signs seem to point to Brazil being first. The government there has recently abolished the massive import duties on electronic devices – such as the Kindle – which made such purchases largely prohibitive.

In addition, The Digital Reader reported yesterday that the hiring process has commenced for the Brazilian Store. The article also notes that the French Kindle Store opened approximately eight months after the hiring process commenced (and if I remember correctly, that’s a similar time-frame to the Italian Kindle Store).

There have also been rumors of future Kindle Stores in China, Japan, and India. Although, while each of those markets has huge potential, they also present difficult and diverse logistical challenges.