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Book buying online surges, captures market share

A new publishing industry study shows that the number of books purchased over the Net surged last year, snatching market share away from traditional booksellers.

Book buying over the Internet surged last year, snatching market share away from traditional booksellers, according to a new publishing industry study.

The Internet also helped reverse the decline in sales that was seen by booksellers in 1998, fueling a 3 percent overall increase in book buying, according to the study released by the Book Industry Study Group (BISG), an independent nonprofit group.

Consumers bought more than 50 million books on the Internet, accounting for 5.4 percent of total sales in 1999, up from 1.9 percent in 1998. All other outlets for book sales registered declines in 1999, according to the study.

Large chain bookstores accounted for 24.6 percent of sales, slipping from 25.3 percent in 1998. Independent bookstores continued their slide, drawing 15.2 percent of book sales in 1999, compared with 16.6 percent in 1998. Book clubs also dropped their market share to 17.7 percent from 18 percent in 1998.

"Ninety-five percent of books were still bought the old-fashioned way," said Barrie Rappaport, a senior account executive at NPD Group, who worked on the study. "But Internet sales are going to grow as more and more people have access to the Internet at home and at work."

The study underscores the increasing jitters felt by traditional booksellers as the Internet transforms the industry. First came online books sales, and now bookstores see on the horizon the emergence of digital versions of books that can be downloaded from the Web.

The landscape is bleak for many booksellers. While large chains like Barnes & Noble and Borders have continued to expand their market share, several chains have already crashed or are in a tailspin. Lauriat's went bankrupt and closed all of its stores, while Crown Books also closed some stores as it operates under bankruptcy protection, Rappaport said.

The death-knell for independent bookstores has been even more severe; almost half have become extinct since 1994, according to the American Booksellers Association.

But chains and independent stores are taking on the trappings of online sellers. Barnes & Noble created and spun off its Barnesandnoble.com site, while independent sellers recently launched Booksense.com, a site that brings together widespread Internet stores set up by independent booksellers.

The surge in Internet sales has helped Amazon.com show a profit--at least in its books unit. For the second quarter in a row, Seattle-based Amazon said its book business was profitable, but declined to give the bottom line number for that particular business.

Rappaport said her group plans to study whether the Internet is expanding the book buying market or simply shuffling around the available market share.