New Ebook Player? UK Supermarket Giant Sainsbury’s Buys HMV’s 64%b Stake In Anobii For £1

A sudden, but perhaps unsurprising, bit of e-book M&A today in the UK: the music and entertainment company HMV is selling its 64 percent stake in e-book retailer Anobii to the supermarket chain Sainsbury’s, for the princely sum of £1 ($1.55).

The deal will give Sainsbury’s a jump start into the e-book market as part of its stated strategy of becoming a bigger player in digital media business. It has been gradually building this up since 2010, although without much fanfare: in November of that year it launched its Sainsbury’s Entertainment brand; in November 2010 it bought online entertainment company Global Media Vault; and earlier this year it started its own music downloading service. It also gives Sainsbury’s a window for international expansion: Anobii currently has 60,000 customers — not just in the UK but internationally.

The acquisition is a clear move on the part of Sainsbury’s to compete more directly with its big UK supermarket rival Tesco, which has its own e-books portal and resells e-reading devices like the Kindle from Amazon. Tesco’s has a modest number of titles in its catalog at the moment — 221,504 books at the moment, compared to the 600,000 titles in the Anobii catalog.

From the looks of it, for now Anobii’s other shareholders are remaining on board. They include HarperCollins, Penguin and Random House UK. The four will continue to invest in the company to develop its services overseas.

Sainsbury’s is making much of Anobii’s strength not just in e-book retailing for multiple devices but also its social and engagement aspects. ”Anobii’s innovative use of social media is a clear differentiator. This acquisition is a valuable addition to our digital portfolio and shows our commitment to becoming a key player in the digital entertainment market,” said Mark Bennett, Sainsbury’s Head of Digital Entertainment, in a statement.

Still, this is not exactly unique in online book retailing, considering that Amazon and others also offer reader reviews and ratings.

As both Tesco and Sainsbury’s continue to shift more of their business online — the UK supermarket industry has a thriving online shopping/ home delivery service, something pioneered by Tesco — they are additionally looking for more products to shift through that infrastructure, and for ways of more comprehensively competing against companies like Amazon, which continue to encroach on their territory.

On HMV’s side, the company, built primarily on the troubled music market, has been in a tight situation for some time now and has needed to shed assets and fast — as evidenced by the very low pricetag on the Anobii sale. That also points to the challenges that Sainsbury’s and existing shareholders will continue to face to make headway in an industry that is dominated by Amazon, with several other big retailers like Waterstones in the UK linking up with the U.S. giant to make the playing field even less even.