Gerrman media giant Bertelsmann, part owner with Pearson of Big Five behemoth Penguin Random House, is reportedly closing its direct-to-consumer book sales business in Europe, Der Club, and its few retail bookstore premises. According to the Wall Street Journal report, “The company’s retail locations as well as the online store, branded under the ‘Der Club’ label, will cease operations in Germany, Austria and Switzerland by the end of 2015, spelling the end to almost all of Bertelsmann’s remaining bookselling activities.” A residual business will continue to operate in Russia, the Ukraine, and Spain.
As the German press remarks, this decision has long been expected. Coverage cites both competition from the likes of Amazon and Bertelsmann’s own enhanced negotiating muscle with distributors, including Amazon, through its partnership with Pearson. Hence Bertelsmann’s move says less about the viability of the print book business than about the current economics of publishing and book distribution. It simply makes no sense for Bertelsmann to continue to operate a limited distribution and sales network of its own when most of its attention and resources are focused on producing content. Actual distribution logistics are now the purview of a separate division, Arvato.
Interestingly, Markus Dohle,the new Penguin Random House CEO, was formerly head of the Arvato Print division at Bertelsmann. Distribution experience may stand an individual or a company in good stead, but as a business focus, it seems to be a different story.