Further Dissension in the Ranks
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Amazon.com (NASDAQ: AMZN) will be facing a harder road during their entry into producing physical books. Last week Barnes & Noble announced their intention to ban Amazon books from their shelves in a stunning move that rocked the publishing industry citing Amazon’s tendency to limit access to authors among their reasons.
Over the weekend Barnes & Noble (NYSE: BKS) was joined by Canada’s Indigo Books and Music (TSX: IDG) and Books-a-Million (NASDAQ: BAMM). Both companies have decided to side with Barnes & Noble on the same principles that brought about the ban to begin with.
Indigo Books and Music is one of Canada’s largest retail chains founded by Heather Reisman, wife of Onex Corporation's (TSX: OCX) CEO, Gary Schwartz. Indigo acquired their largest competitor, Chapters, in 2001 and by extension also gained a chain of small format bookstores called Coles.
Janet Eger, vice-president for Indigo, told The Globe and Mail, “in our view Amazon’s actions are not in the long-term interests of the reading public or the publishing and book retailing industry, globally. Indigo Founder and CEO Heather Reisman has congratulated Barnes & Noble for taking a leadership stance on the matter and offers kudos.”
Books-a-Million is the second largest chain in the United States with over 200 locations country wide. The store was founded in 1917 as a corner newsstand in Alabama. Since then the company had found solid footing in the industry offering the public small express outlets and major superstore outlets as well as a strong online presence.
Considering the direction in which Amazon would like to take their company, having these major retailers refuse to carry their print works does present an obstacle in the path. This dissention of retailers also puts a limit on available access to Amazon’s exclusive authors such as Penny Marshall, Ron Paul, and Tim Ferris.
The Wall Street Journal wrote: “By denying Amazon’s authors access to its vast network of consumer stores, Barnes & Noble is sending a signal to future authors, agents, and publishers who may now be less tempted to sign such agreements.” The addition of Indigo and Book-a-Million makes this statement even more foretelling.
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