James Patterson captured a great deal of attention in the book store world as he announced his intent to give away $1 million dollars to a variety of independent bookstores. A PW Daily story chronicles the first round of these grants, totalling $267,000, given after he meticulously reviewed grant requests.
The question is, what knight in shining armor is out there to bail out bookstore giant Barnes & Noble? They just announced a 10% drop in revenues during the third quarter. They say EBITDA (earnings before interest, taxes, depreciation and amortization) increased from $59 to $173 million over this period, but many consider EBITDA a clever accounting ploy to dress up a balance sheet. Revenues dropped in retail (including BN.com), college, and e-book and Nook sales. Were it not for draconian cuts in the Nook division (with more reportedly to come), things would have been even worse.
This is troubling news to me. In our market (Columbus, Ohio) they are the only significant retail outlet left, apart from some small indie stores with limited selections (none near us), grocery stores marketing the bestsellers, and a healthy segment of second hand stores. We’ve often been helped by book and media sellers when we have visited their stores. Sometimes that in-person assistance is far easier than searching around online when you have an idea of what you want but don’t have a particular title you are looking for.
For so many, this is just a market and convenience driven thing. Amazon is so easy to order from when you have a good idea of what you are looking for. E-books are incredibly easy to download and nobody beats Amazon’s selection, although I’m told by many that the Nook is actually a better reading device and doesn’t confine people to the proprietary format Amazon uses. Sadly, many thought Sony’s Betamax a better video format as well.
I suspect we are at a cultural tipping point. Patterson is helping indie operators attempt to innovate to stay in business. I actually wonder if some of these will survive longer than B & N, because they will figure out how to market to, attract, and serve a loyal clientele who still enjoy hanging around physical bookstores and value the service of booksellers and will pay for that privilege. I wonder if B & N needs to take a hard look at which stores in their operation are achieving this same kind of customer loyalty and both learn from them and figure out what the demographics are that make this work.
What troubles me is what will Amazon become if they face no serious competition? What I wonder sometimes is if one of the other new media giants like Google or Apple (I’m not convinced Microsoft is nimble enough) might join forces with Barnes and Noble. Apple has actually figured out how to use brick and mortar outlets to sell its products. It scares me at the same time to write this for fear of whether they might preserve physical book stores, but in some very new iteration alien to many of us.
What I wonder above all is that in turning so much of our commerce over to the virtual world, will we lose the physical spaces that add a richness to life and exchange them for our personal caves with our electronic devices that connect us to this brave new world?
The most creative argument I’ve heard, and one that’s appealing in theory, is the showroom model. Amazon or another online retailer buys Barnes and Nobles brick and mortar stores not to serve as actual stores, but showrooms to do the kind of things you suggest, help people to find books they’ll like. Amazon’s statistics on people who discover books there are dismal, whereas their sales are great. In other words, the data I’ve seen (mainly through publisher’s weekly) bears up what we all assume, that people go to Amazon for the convenience to get things they already know they want.
As for the hardware I agree, though many of the books Barnes and Noble actually sells have tougher DRM than Amazon. The Nook Simple Touch when connected to a computer only shows content the user puts on it, not B&N purchased content. Also, the Touch’s PDF reader is not the best (Kindle and Kobo have them beat on this one).
And from the author’s perspective it can be tough to love B&N. Just as an Indie author, all told I’ve sold 80-90 copies of my fractal book on Amazon, 50+ on Bundle Dragon, and 8 at Barnes and Noble. In other words, I’m doing ten times better on Amazon, and 6-7 times better on Bundle Dragon (which people probably haven’t heard of unless they got it from me). Barnes and Noble has better royalties, but almost no sales (none this month). Now I realize this is a niche book, but more people are finding that niche on Amazon than anywhere else.
The question I have is how B & N would actually be more profitable as a “showroom”. I think they actually already are doing this. What you write does suggest that in various ways, they need to take a look at their business model. I wonder if they might actually do better in e book sales if they became much more open source rather than proprietary. That would give them a competitive distinctive.