In a stunning reversal against the digital book market, the Wall Street Journal reports that a successful author has turned to phyiscal paperbacks through a contract with a traditional publisher. The article, authored by Jeffrey A. Trachtenberg, is entitled “E-Book Author Tries New Format: Real Paperbacks” (August 23, 2011, p. B4).
The author, John Locke, was the first self-published writer to sell more than one million digital books on Amazon.com. The contract with CBS Corporation’s Simon & Schuster will distribute eight of Locke’s thrillers that feature Donovan Creed, a former CIA assassin.
Despite the trend of books moving to the digital format, and despite the trend of traditional bookstores such as Borders closing, the good news is that “there are still lots of retail outlets for books,” according to a quote in the article from Adam Rothberg, a spokesperson for Simon & Schuster.
Are you surprised by this?
Let’s talk about it really soon!
I have never been on board with electronic books. I am not excited about any of the devices such as Kindle, Nook, or iPads. I like a book. I like to hold it, carry it, display it, and engage in conversations about it when others see what I am reading.
I thought it was interesting in the Wall Street Journal on May 9, 2011, when Penguin Books CEO John Makinson claimed there is still a future for physical books. The article is entitled “Penguin CEO Adjusts to E-Books but Sees Room for the Old” (p. B9). The link to the full article appears below, authored by Jeffrey A. Trachtenberg.
Notice that he says that physical books will always be published. “As we add value to the physical product, particularly the trade paperback and hardcover, the consumer will pay a little more for the better experience. I looked the other day into the sales of public-domain classics in 2009, when all those books were available for free. What I found was that our sales had risen by 30% that year. The reason is that we were starting to sell hardcover editions—more expensive editions—that people were prepared to pay for. There will always be a market for physical books, just as I think there will always be bookstores.”
And, even with the closing of Borders’ bookstores, he finds a strong future for such retail outlets. “There is a future in book retailing. A lot of the issue is not just that there are too many bookstores, but that they are too big. How do you diversify the offerings to consumers in order to make productive use of space without losing the experience of being in a bookstore?”
Finally, as I have stressed in other posts on this blog, there is a strong emotional link that book owners experience that goes beyond mere content. Makinson notes that “When you look at the structural competitive advantages Amazon.com has over any physical bookstore, it is overwhelming. But people will willingly pay a higher price in an independent bookshop knowing they can buy [the same book] for less down the road. That’s because consumers feel an emotional engagement with the bookstore and feel that bookstores are providing a public service as well as a commercial service. I see no evidence that independent bookstores will become obsolete.”
I am excited and energized by the fact that a leading, credible authority in the business remains in the physical book arena. While he reads manuscripts in digital devices, he reads physical books as well.
What do you think? Let’s discuss this really soon!
News item: Borders to file for Chapter 11 bankruptcy.
I have shopped at bookstores since I was… well, since well before I was old enough to drive. I had my favorite bookstore in Beaumont, TX, in the Los Angeles area, and in Dallas. (My favorite, of all time, was Acres of Books in Long Beach, a used bookstore that was, truly, acres of books. Not attractive, dusty, “old,” wonderful! It is now closed, as I read on Wikipedia).
When we moved to Dallas in 1987, I shopped at Taylor’s Bookstore. A locally owned “small chain,” it’s location in the outer parking lot of NorthPark Center was ideal. I could always park right in front, and get lost for a few hours.
The big national chain stores put Taylors out of business, and I switched to Borders. For some reason, I always liked Borders better than Barnes & Noble – no, I don’t know why. Just the feel of the store.
But I helped put Borders out of business. Because, for the last few years, I have spent far more at Amazon.com that I do at the physical stores. So, it’s partly my fault – but it is still sad.
The bookseller’s finances crumbled amid declining interest in bricks-and-mortar booksellers, a broad cultural trend for which it had no answers. The company suffered a series of management gaffes, piled up unsustainable debts and failed to cultivate a meaningful presence on the Internet or in increasingly popular digital e-readers.
The article seems to imply that Borders’ problems are significantly Borders’ fault. But, let’s say that Barnes & Noble is better managed, better run, with its Nook, and on-line business, developed in a pretty timely manner. Here’s the thing: I’m loyal to Amazon on-line, and have never once even checked Barnes & Noble’s site.
And, it really doesn’t matter. Here’s the future, from later in the article:
Online shopping and the advent of e-readers, with their promise of any book, any time, anywhere, and cheaper pricing, have shoppers abandoning Borders and Barnes & Nobles bookstores as they did music stores a decade ago.
“I think that there will be a 50 percent reduction in bricks-and-mortar shelf space for books within five years and 90 percent within 10 years,” says Mike Shatzkin, chief executive of Idea Logical Co., a New York consulting firm. “Bookstores are going away.”
“Bookstores are going away.” It’s a sad day.
And for this blog, which focuses on business issues and ideas and business books, here’s the question – are you in a business that can shift and change and adapt with the times, or are your days numbered also?
(let’s call this a lesson in business focus).
No, I don’t know the future of the book business, (or the restaurant business, or the car business — or any business, for that matter.). I don’t know if physical books will survive in the e-books era. I don’t know if people will be able to read anything much longer than a Tweet or a text message in years to come.
But in reading about the fall of Border’s (it may be nearing the end…), I was reminded of a story told by David Halberstam years ago.
First, Borders. In What Went Wrong at Borders by Peter Osnos at the Atlantic site (read it here), Mr. Osnos closes with this:
Len Riggio, Jeff Bezos of Amazon, and the successful independent proprietors, whatever their other business virtues and flaws, really have a deep attachment to books and the people who read them. But when Borders expanded, they brought in executives from supermarkets and department stores (all of whom insisted they were readers), and the result was a shuffle of titles and more downsizing against a backdrop of financial engineering, which only seemed to make matters worse. Ultimately, a successful bookstore, on any scale, depends on a specific understanding of how to make the most of the outpouring of books and the digital transformation that will attract readers. Whatever else Borders does in the months ahead, it needs to recover its belief that real book-selling is an art (with all the peculiarities that entails), as well as a viable business.
It’s such a subtle point, yet so clear – it simply seems like really obvious common sense. If you want to succeed in the book business, it might help if you love books. A supermarket and department store expert may know a lot about a lot of other stuff, including management and sales – but he/she may not love books.
I confess — I think I would love working in a book store. I would walk the aisles during my breaks, and always spend every available dollar buying as many books as I could afford (and probably quite a few I could not afford). Walking up and down the aisles of supermarkets or department stores just does not have the same allure to this book lover (although, I might like to sample a whole lot of Häagen-Dazs – better keep me away from there!)
Now to the Halberstam story (Told from memory – I heard it in an interview from somewhere long forgotten). Years ago, he told of a time when Walter Mondale, while Ambassador to Japan, toured the largest steel plant in Japan. After a while, he asked his host’s opinion of (now dissolved) Bethlehem Steel. After 30 minutes of very careful Japanese politeness (“father of the industry; great company; great legacy…”), his host finally asked “why is Bethlehem Steel buying banks?’ It was then that Mondale realized that the steel makers in Japan loved steel. Whereas in America, the steel makers loved money. And in the steel business, the steel lover has a definite advantage over the money lover.
I don’t know who the last physical book seller will be. But I think I know this – whoever it is will love such books to the end, and he or she will hate to see the books go every bit as much as he/she hates to see the job end.
I hope you love what you do.
In my first “adult/out of college” job, c 1972, I served as a Youth Minister in Beaumont, Texas. (My wife once killed a mosquito so big that she mailed the dead mosquito to her mother). I quickly discovered a little bookstore. Owned by a woman whose name I have forgotten. I would go in weekly – sometimes more than that. Always spent more than I had budgeted to spend on books. I spent hours in that store. It was definitely locally owned… and the owner was my friend, confidante, counselor. I’ve never hung out at bars, but that book store owner was the best bar tender I ever met…
First, my disclaimer: I have never shopped at Legacy Boos: An Independent Bookstore in Plano. It was just too far from my neck of the woods – in fact, I never even saw it.
But, when I first moved to Dallas in the late 1980’s, I shopped at Taylor’s books. It was in the far north parking lot of Northpark Mall, just across from the two movie screens where I watched JFK, and many other films. Now, both are gone – Taylor’s, and the movie theater.
This could be just another “big box puts local business out of business” story. Legacy was, after all, a “local” store in the era of Barnes & Noble and Borders. And, they built and opened in 2008, just about the worst possible date to start anything, because of the economic conditions
But, it’s not that simple.
Barnes and Noble is also not doing well, and has just been put on the sales block. The final chapter? The world’s best-known bookstore puts itself up for sale:
Browse a while, sip a coffee, buy the shop
IT COULD be the title of an offbeat thriller: “Billionaire Party Boy Versus The Ted Turner of Books”. On August 3rd the board of Barnes & Noble decided to “evaluate strategic alternatives”. In other words, the world’s leading bookstore is for sale. The coming battle for control will involve colourful combatants. It will also have serious implications for the future of publishing.
And Borders has not been healthy for quite some time.
(ON the Barnes & Noble news, Border’s stock was up 3 per cent Wednesday as part of the speculative frenzy – to $1.36. Its penny-stock status reflects its leverage and perceived also-ran status in e-books)
Borders Group Inc. president and Thomas Nelson Publishers chief publishing officer Tami Heim to lead a new brand development and consulting division.
In a scenario that feels like a repeat of the music industry’s woes, digital consumption of books has eroded the traditional distribution channels and revenue streams the traditional publishing industry is built on. It also has created rights disputes for titles written before the advent of e-books and led to declining royalties since e-books are sold cheaper than physical copies, which also has led authors to seek higher royalties on digital sales.
So, this is a story about a lot of things. It is a story of the difficulty of a small, locally owned business trying to survive, and failing, against the behemoths. It is a story about the difficulty of small businesses in general. (Remember, politicians like to tell us that the future of job growth is in small business. Not as easy as it sounds!) And, of course, it is a story about the health of the publishing industry, especially the publishing of physical books.
And I’ll just skip the part about the disappearance of Record/Music stores. Digital, and Barnes & Noble and Borders, pretty much did them in…
And this is the story of the big box stores against the on-line competitors.
And, it is the story of lost jobs, and a lack of new jobs.
Just yesterday, I stopped in at a TCBY. (It’s across the street from where I get my hair cut). Do you remember those? Used to be, it felt like they were on every other corner. Now, they are rare indeed – I only know of one in Dallas that ‘s left, and the woman who served me my White Chocolate Mousse said that she used to make the frozen cakes for all the TCBY shops. Now, that business is basically non-existent.
Back to the book store. Bob Morris e-mailed me on the news of Legacy’s closing with this line:
Tragic. I was in the store recently. Purchased several books for grandchildren. And immediately thought about the film You’ve Got Mail.
Where will people browse for books in the future? It is nice to read a table of contents and first pages on the Amazon site, but it is not the same as sitting with a stack of books and browsing though the pages.
Where will people work when more and more jobs are lost?
I’m feeling unusually and unexpectedly sad at this news – for a book store I never even visited.
Before we post foreclosure signs outside of book retailers such as Barnes & Noble, Borders, Half-Price Books, and others, because everyone purchases books and downloads them on devices such as Kindle, let’s talk about what these retailers really are.
Yes, they sell books. But, any cursory glance at a visit to these stores will tell you that customers are there for many reasons. They are there for an experience. Last night, at a prominent store of this type, I walked in and found it packed. Patrons filled cafe tables, drinking, eating and chatting. People were on sofas chatting. As I kept walking, I found people listening to CD’s in the music section, conducting business near the magazine section, browsing through gift items near the cash registers, listening to stories in the children’s section, and of course, perusing book aisles.
Any trip to these stores will confirm the notion that these are places that offer experiences, not sell books. Predictions were wrong that Amazon.com would put these stores out of business. It didn’t happen. Predictions will be wrong that devices such as Kindle will do the same.
The reason is very simple. These stores have amply diversified beyond any one product type or line. There is much more to them than books. In fact, they are much less of “bookstores” than Starbucks is a “coffee shop.” As Joseph Pine and James Gilmore argued in The Experience Economy, they have evolved into places where people can go for a fulfilling experience.
While sales have slipped, a CNN Money report indicates that they have done so less than expected, and in fact, no more so than other types of retailers who have felt the brunt of a shaky economy.
Don’t think for a minute that people do not like to get out and relish in experiences. If that is the case, then we would have lost every retail mall once online shopping became available. There are plenty of people who will download books to devices such as Kindle, and among them, many who will curl up in their recliner and read their books that way. But, there are also many of them who will do that and also find their way into retail outlets that stock and sell books.
Perhaps if a retailer only sells books, it will be in trouble. But, not in any more trouble than any other kind of retailer who puts total emphasis upon one product type. That is not what these retailers are doing. They sell books, but offer experiences. And that is why an electronic device will not shut them down.
Do you disagree? Let’s talk about it.