As Amazon Soars, Bookstores Creep

Two surveys released over the past several weeks put the share of the consumer book market controlled by online retailers at between 21% (R.R. Bowker) and 30% (Fairfield Research), growth that has been fueled, in large part, by the expansion of Amazon. In discussing their 2007 results, both Penguin's David Shanks and Simon & Schuster's Carolyn Reidy said the e-tailer was their fastest-growing account last year, while Quarto Group chairman Laurence Orbach noted that sales of its MBI Distribution subsidiary have increased by more than 10% at Amazon in each of the last three years.

The growth of Amazon has easily outpaced gains made by its bricks-and-mortar competitors. Although the e-tailer doesn't break out book sales separately, it does report North American media sales, which grew 29% in 2007, to $4.63 billion. In contrast, bookstore sales, as measured by the Census Bureau, increased 1.0% in 2007 to $16.76 billion (a figure that may be revised later). Over the last five years, sales through bookstores rose a meager 3.6%, while sales through Amazon jumped a remarkable 104%. In addition to books, Amazon's media segment includes sales of movies, music, software, digital downloads, videogames and videogame consoles. And Amazon's book sales include much more than new trade books, since the e-tailer is a major outlet for used books, professional books and textbooks. Still, a comparison with bookstores remains relevant since the Census Bureau definition of a bookstore is an outlet that generates half of its sales from books, but includes sales of all items in its overall figures.

With Amazon's growing power in book sales, it's understandable that publishers may be a bit anxious on learning that in Amazon's 10-k filing with the Securities and Exchange Commission, the company lists among its many competitors not just bookstores but also publishers.