The publishing industry was taken by surprised yesterday when Waterstones announced an unlikely business partnership with Amazon for the sale of Kindle devices and ebooks through in-store wifi. The predominant view, which I share, is sceptical of this deal for Waterstones but it will be interesting to understand better as more details emerge. The announcement is well covered on Digital Book World who ask the question ‘Is Waterstones Mortgaging Its Digital Future With Amazon Deal?‘.

This is one of a couple of deals I’ve heard of recently that made me think. Faber announced a partnership with Mumsnet which I thought was a smart move. It allows them to tap into the strong Mumsnet community and offer writing courses to a market you wouldn’t otherwise associated with the Faber brand. Also in something close to home for my business Future Publishing and Anova Books announced a tie-up around the new craft magazine Mollie Makes. This is another deal that sounds good on paper and we’ll wait to see the fruits of this.

Success in business partnership can certainly be challenging. Foremost, there’s the commercial challenge of sharing in financial performance and once a partner is involved this inevitably has an impact. You need to be able to agree goals and approach and this can be difficult as partners will have a different focus or culture, there’s the question of who owns the customer relationship, is the partnership equal and much more to overcome.

Nonetheless, what I like about Faber/Mumsnet and possibly Amazon/Waterstones (although the jury is out on the deal for Waterstones) is that these have been driven, you assume, by people putting the customer first to build the opportunity. Once you do that, it makes it easier to agree on the difficult terms that always need tackling and you can focus on growth and opportunity that make the time and investment well worthwhile.

Following the well reported sale of Waterstones to the A&NN group we’re beginning to get some sense of the strategic vision the new MD James Daunt has in his sights.

Daunt’s belief in creating great bookshops will no doubt get a lot of love from the beleaguered trade publishing community. But while this is certainly an admirable goal, the big question will be if this can really be made to work and can Daunt halt a downward sales trend with this plan?

It’s no surprise that this is a key initial theme to emerge. Daunt has had success in his previous business with this strategy and he’s clearly a great bookseller, but applying that same mentality to the near 300 Waterstones stores will be tough to achieve. Even if he can drive the cultural change here (and this should be possible as Waterstones were great bookstores not that long ago), he will need to work out how to back out of the strategy put in place around the distribution hub. Hand in hand with this is determining what to do with pricing and, as Daunt himself identified, if enough value is added to encourage consumers to shop in his new stores over Amazon, which he says are only selling on price.

I disagree with this last point. Price is absolutely what Amazon use to get deep market share but there is more to Amazon than this – the use of data to make recommendations to consumers, customer reviews that aid the purchase decision and the obvious benefit of being able to shop any time and have the book delivered the next day come to mind. Frankly I for one do enjoy shopping on Amazon when it suits me. What’s more, from a publisher standpoint I have a control of the presentation of books to purchasers on Amazon that I simply don’t have on the high street.

One store that Daunt will need to work on is Waterstones online. It’ll be very interesting to see how and if the local model can be applied here and then what next step Waterstones takes in ebooks. The obvious choice is to replicate, or do a deal with, Barnes & Noble to mirror the success of the Nook in the US and I’d be very surprised if there wasn’t an announcement of this nature soon.

It’s another fascinating turn in the industry and we await the first steps and more news of the strategic plan. In the meantime, this new investment is good news for publishers if for no other reason than the important role bookstores still play today in creating audience for books (even if they do then go and buy online).

Image Copyright R Sones. Reused under the Creative Commons Licence