BertelsmannOnline Aims to be Europe’s Top Media Shop

GUETERSLOH, Germany – Bertelsmann, the German media giant, kicked off a drive this spring to make its multimedia arm, BOL (BertelsmannOnline), Europe’s leading media product merchant.

It launched online book services in France and Germany in February with a selection of 900,000 book titles. It followed that in the UK last month with more than 1 million titles and launched a Dutch Web site at the end of March. Spain, Switzerland and Scandinavia are to follow.

In this interview, DM News International editor Tom Weyr talks to Dr. Klaus Eierhoff, CEO of the multimedia division, about Bertelsmann’s online growth plans.

DMNI: What is Bertelsmann’s e-commerce strategy to become Europe’s number one media product merchant?

KE: Lets look at Europe’s e-commerce market first. More and more customers are discovering the Internet as an information and distribution channel.

In the past year e-commerce turnover in Europe jumped dramatically, especially during the holiday season. The upward trend continued in the first quarter of this year. As one of the world’s leading media companies Bertelsmann thus faces major challenges and opportunities. Using the Internet’s new distribution channels, we plan to offer customers our entire range of media products, including publishing, music and broadcast activities.

Three things are of central importance for the development of our e-commerce strategy:

First, Bertelsmann’s strength lies in content production. We are the largest English-language trade publisher in the world and belong among global leaders in the music, TV and magazine business. Moreover, our book clubs have given us decades of experience in direct contact with customers.

Second, we recognized the importance of the Internet early on and in Europe built up strong joint ventures in the online field. The selection of offerings on CompuServe, AOL and Lycos are among the most often visited pages on the Web.

The third ingredient for our success is the service providers for software solutions and logistics – Bertelsmann MediaSystems and Bertelsmann Industrie AG – that are part of our company.

As an e-commerce enterprise, you cannot shine only at the front end. The back end and the delivery system must be in place as well. As you can see, Bertelsmann is in a great position for the e-commerce business.

DMNI: How will you handle the language issue on the BOL Web site? Will customers be able to buy in several languages or only in that of the country from where the site is accessed?

KE: Dealing with the various linguistic and cultural regions and the differing mentalities of our clients on the European market is essential.

As a media company that operates in a very decentralized manner in our individual markets, this is one of our major strengths. At the same time, however, we are linking BOL’s product range for the separate markets.

We have 900,000 titles available in Germany and France. For the launch in Great Britain we dispose of over a million titles. After BOL starts in Spain and Holland we will have more than 4.5 million books available. We will expand that range in response to client demand.

DMNI: is trying to gain a foothold in Europe. Do you expect them to become a serious competitor here?

KE: Amazon is a strong competitor. But there is room for several suppliers in this rapidly growing e-commerce market. There are good reasons for assuming that the sales volume will increase strongly.

For one thing the number of online households in Europe is growing by 35 percent a year. For another, use of PCs is becoming much easier. And finally, customer confidence in secure electronic payment is increasing.

By 2002 online book sales in Germany, Great Britain and France are expected to pass the $1 billion mark.

Anyone who hopes to be successful in this growth business needs, in our view, to offer a stable online system and first class service. What our young team has done from the start is impressive.

We are proud of the fact the Wall Street Journal Europe recently gave BOL Germany higher marks than it did Others have praised us just as much.

Q: When will you add CDs, videos and other entertainment items do your product range. And do you plan to follow Amazon into the pharmaceutical market?

A: We started with the online sale of books, not only books from our own publishing houses but with product from many other publishers. During the course of this year we will expand our media product range, for example to music.

But as I told you at the beginning, we will focus on media products. That’s where we have been experts for many decades. And that is essential in order to offer our clients the possible service.

It is our ambition to make BOL into Europe’s leading virtual media shop.

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