Nobody likes a good heavyweight fight more than I do. I remember the days of Mohammed Ali, Joe Frasier and George Foreman and their epic battles. Who can ever forget The Thrilla in Manilla or The Rumble in the Jungle?
And now another epic battle is shaping up:
Introducing in the blue corner, the challenger – Walmart/Kobo and in the white corner, the reigning heavyweight champion – Amazon/Kindle.
Walmart Taking on Amazon in eBook Space
Walmart and Japan’s largest e-commerce site Rakuten (owner of Kobo) announced the launch of Walmart eBooks. Its initial offerings will make available more than 6 million titles from the Kobo library, including all categories of books from fiction to children’s books and from large publishers to Indie authors.
The first punch thrown by Walmart is to undercut the cost of a subscription to an audiobook service to $9.99 ($5.00 cheaper than Amazon’s Audible subscription).
As an incentive, Walmart is offering digital book cards with 40 titles in 3,500 stores as well as selling the Kobo Aura eReader in 1,000 of its stores and on its growing online e-commerce site. Walmart’s e-commerce platform is starting to eat into Amazons once untouchable market share.
Why would Walmart decide to get into a declining market segment? After all eBook purchases have been declining steadily and now only represent 17% of book sales, while at its peak that number was 23%. One small reason is that audiobooks are the fastest growing segment of the publishing industry with growth of 34% since 2016.
But the main reason is CONTENT. With Walmart expecting to launch its own “prime service” in the near future, they need to be able to compete with Amazon with all the same content Amazon provides its best customers.
Another main reason is driving traffic to its brick-and-mortar stores. With Amazon’s purchase of Whole Foods and their push into same-day grocery delivery, along with the opening of Amazon Bookstores, Walmart’s core business is being threatened. The more interesting products they can provide to their customers the more they feel they can compete.
Two big questions remain for publishers and authors; one is how will it affect them (will they sell more books?), and the second is if there is a price war will reduced prices be forced up the supply chain which will reduce profits for publishers and cut royalties for authors.
Stay tuned, we will keep your scorecard updated as to how who wins each round!
This fight is only just beginning, but it promises to be a bloody one since both Goliaths are relentless and have shown no inclination to back down from a good brawl.