Sainsbury's buys a majority stake in a digital book retailer

The supermarket chain wants to expand in the digital entertainment market.

Abdul Montaqim

Britain’s third-largest retailer has bought a 64% stake in online electronic book retailer Anobii for a nominal fee of 1 pound ($1.56) from beleaguered music and entertainment media retailer HMV. Sainsbury’s says the acquisition is part of its strategy to sell shoppers electronic books and other digital content.         

“This acquisition is a valuable addition to our digital portfolio and shows our commitment to becoming a key player in the digital entertainment market,” says Mark Bennett, Sainsbury’s head of digital entertainment. “It further demonstrates how we are constantly looking to innovate and seize opportunities that will support the future growth of our business.”

According to PricewaterhouseCoopers LLP, digital entertainment and media revenues increased 17.6% globally in 2011.

Bennett adds that Anobii’s use of social media drew Sainsbury’s interest. In fact, Anobii is known principally as a social networking site, with around 600,000 users worldwide who rate and review books and share comments with other members. However, its shareholders include publishers HarperCollins, Penguin and The Random House Group. Largely as a result, Anobii has amassed a library of some 60,000 books, as the publishing houses use the site to distribute their books electronically.

Sainbury’s launched its strategy for the entertainment business in November 2010, teaming up with home entertainment distributor MBL Group to unveil a new web site—sainsburysentertainment.co.uk, offering music, videos, games and books.

“Online enables us to offer much more than we can in store. The new site will join seamlessly with our existing non-food online offer so customers can browse and discover their favorite music, films, books and games easily,” Richard Crampton, Sainsbury’s head of entertainment, said at the time of that launch.

A year later, it acquired Global Media Vault, an online digital entertainment business operating with Sainsbury's as its main client. It also launched a music download service earlier this year.

Sainsbury’s earlier this month reported strong growth in its e-commerce business in the United Kingdom in its first quarter earnings report. The company said online sales were up 20% year over year.



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