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Research Shows Change in Online Media Selling
19/5/01



New research released by Forrester describes how media giant Bertelsmann is to merge BOL.com, its dot-com retailer, with its offline book and music clubs. Many believe that this shows how Bertelsmann, and the media industry in general, is seeking to change the way media products are sold online.

Forrester’s new study reports that, as a result of this change, BOL's central operation in London will be dissolved. Local BOL units will now become profit centres within regional club operations. In Denmark and Norway, where no club operations exist, BOL will close. Bertelsmann's eCommerce Group Chief Executive Andreas Schmidt has stressed that the integration of BOL and the clubs will cut costs and encourage cross-selling.

BOL will probably transform itself into a book and music club whilst owner Bertelsmann will probably turn its back on the current online selling model. In this sense, Bertelsmann will reduce its available range, emphasising only high-margin products produced within the group or bought at a discount. It might also gradually restrict sales to qualified, financially committed customer groups only.

Forrester’s study continues by describing how Bertelsmann will probably only bring back broad ranges when it can avoid physically warehousing and delivering hundreds of thousands of titles. Its investments in digital distribution services such as Napster, Digital World Services, and Booktailor.co.uk will provide the company with early access to technology that can cost-effectively extend its offering beyond its core range.

In conclusion, the research notes that other retailers will follow or go niche. This means that other online media sellers, such as Waterstones, are likely to come to the same conclusion as BOL.com and realise that without tremendous scale, expansive online ranges of physically delivered media products are simply not profitable.