The e-book store market may be dominated by Amazon, Barnes & Noble, and Apple, but a few independent online e-bookstores, patterned after bricks-and-mortar retailers, have carved out a lucrative niche. Some were emboldened as far back as 2003, when Barnes & Noble.com initially exited the e-book market that September. Others began ramping up before Amazon upped the ante by purchasing Mobipocket in March 2005. And some stores have recently begun extending their reach “now that,” as Stephen Cole, founder and CEO of Australia-based eBooks.com, puts it, “we can see what’s left now that that plague of locusts that was Amazon have passed through the market.” In March Paris-based Feedbooks.com raised one million euros in its first round of venture capital funding. EBooks.com is looking for “significantly more” later this fall, Cole says.
The eponymous science fiction book publisher Jim Baen launched one of the first independent e-book stores in 1999, BaeneBooks.com. The store’s original name, Webscription.net, harked back to the publishing house’s sci-fi roots and serialization in pulp magazines. According to Jim Minz, manager of third-party e-book distribution at Baen, the company’s founder simply wanted to sell more e-books and had been an early adopter of another technology, CD-ROMs, which were bound into the backs of many of Baen’s books. “Pre-Kindle, we were one of the top five e-book retailers in the country,” says Minz. “For the last five years, we’ve had over seven-figure annual sales.”
Although the Department of Justice has been particularly interested about e-book pricing, Minz says, “We chuckle about pricing issues.” In part, that’s because Baen has found a unique work-around for low-cost e-books, which typically retail for $4 to $6. The company, which sells only DRM-free titles, offers e-ARCs, typos and all, for $15 to $17, before the finished book is available. Devoted customers often buy them along with advance serializations and finished e-books.
“From my perspective, the pricing of e-books is still problematic,” says Brian Altunian, who purchased Wowio.com two years ago, the only site to offer free ad-subsidized e-books. “Pricing is going to have to come down. My children consume all their content on devices, and they’re used to seeing ads in Angry Birds.” Wowio takes public domain content like H.G. Wells’s The War of the Worlds and turns it into what Altunian calls “a real experience” with original art from the magazine where the book was first serialized and sound clips, including one with Orson Wells.
Five-year-old Feedbooks is also a destination for readers looking for free content. “We get a lot of eyeballs that way,” says cofounder Hadrien Gardeur. Feedbooks, too, takes public domain titles and “improves” them by dividing books into chapters, parts, or sections, and adding a cover. However, what distinguishes Feedbooks is its international focus. When it launched five years ago, its Web site was in French and English. Since then it has been translated into German and Spanish and will release an Italian version this summer. “Getting the content in all these markets is, of course, a lot of work. But we’re dedicated to providing a full catalogue in all the major European markets along with the English-speaking countries,” says Gardeur, whose goal is to be the “top indie retailer worldwide.”
Bob LiVolsi started BooksOnBoard.com in Austin, Tex., in November 2006 to feed his own e-book reading habit after B&N left the e-book arena. His store, which sells mostly DRM titles, rose to the #3 spot in e-book retail, then sank back in 2010, when the agency model was introduced. As a result of the transition, BooksOnBoard lost a significant part of its book catalogue—and customer base. “Kobo, Sony, and Apple overtook us“ says LiVolsi, who spent the next six to 10 months restoring his inventory.
“The agency model fundamentally shut us off from a capital standpoint,” says LiVolsi. “It was a pretty ugly thing and pretty insensitive to the channel.” Today BooksOnBoard is starting to bounce back. Its business is up 14% above where it was when agency came in. According to LiVolsi, the e-store has the largest collection of books available for territories outside the U.S., and more than half of BooksOnBoard’s revenue, roughly 69%, comes from outside the U.S.
AllRomanceeBooks.com, too, launched in 2006, but with 18 publishers and a very specific mission reflected in its name. “Barb [Perfetti] and I wanted to open a romance bookstore so all the publishers could have their books in one place,” says cofounder Lori James. They soon found that many of their customers read more broadly and wanted to buy all their books in one place. So three years later they added a sister bookstore, OmniLit.com, which carries close to 500,000 general titles. Then in 2011, they added a third integrated site, AReCafe.com, to serve as a social space.
“Our vision,” she says, “was to try to replicate what it’s like to walk into an independent bookstore.” To foster a sense of discovery they read as many books as possible to be in a position to handsell titles when customers call with questions. Other ways James looks to make books easier to find is to place books in multiple categories and to add tags. Now that the three linked sites are up and running, this year James says that AllRomanceeBooks will focus on purchasing. It is working with PayPal to reduce the number of clicks.
Cole also patterned eBooks.com after an independent. In his case, it was the Lane Bookshop in Perth, which he and his wife, Trudy, owned before opening eBooks in 2000. Their offices are located above their former store. Since 2004, says Cole, the company’s been returning dividends in large part because of the success of its academic library service, EbookLibrary (eblib.com), which was up 70% in the first quarter of 2012. “We’re the only company with a significant retail brand and an academic brand that has established contracts with publishers representing 2,000 imprints,” he says. Cole attributes eBooks not losing any contracts when the agency model came in to the fact that he was on the phone “round-the-clock.” The company, which has two offices in Australia and two in London, is about to expand further into the U.S., planning to open an office in either Boston or New York by the end of the year.
“I’m very bullish on independents right now. We’re not tied down to this hardware thing. The fact that everything is made to work on as many devices as possible opens up opportunities,” says Scott Redford, founder of eight-year-old Diesel-eBooks.com, based in Richmond, Va. He likes to describe his e-book store in terms of Che Guevara, because its newly launched eFreedom app allows consumers to read on any device. In addition to the app, Diesel is creating new opportunities by bundling up to six digital e-books and by relaunching its dedicated e-bookstore for romance and erotica: ebook-eros.com. Last month Diesel inked a partnership with Koinz Media to supply e-books for loyalty programs with banks, airlines, and hotels.
Like Redford, Martijn Leenders, managing director of one of the oldest e-book stores, eBookMall.com, also sees this as a time of opportunity for indies. “I’m not saying we were excited when the agency plan was introduced. There were challenges getting those titles back,” he says. “It forced us to renew our Web store and try to see it as a positive thing.” EBook Mall was founded in 1999 and is now based in the Netherlands Antilles. As part of reinventing itself, last week eBookMall introduced a new writing contest, America’s Next Author. As Leender sees it, it’s not just about an author winning the $5,000 grand prize and a book contract. The contest, which takes its name from TV reality shows, will provide increased exposure for novice authors’ work. EBookMall is also in the midst of upgrading its browsing experience and will introduce a new book discovery feature in the next few weeks.
Whether Cole is right that independent e-book stores are poised to pick up the pieces that Amazon has left remains to be seen. But like Redford, he and many others that survived the agency model transition, and many did not, are bullish about the possibilities going forward—whatever new contracts the DoJ settlement may impose.
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