Tuesday 19 July 2011

Brick and Mortar Book Stores – Legacy Publishing Houses

Over the last few days, we have been watching the Borders saga unfold with a grim fascination. It’s kind of like the crowd at the 2001 Melbourne Grand Prix watching Schumacher barrel roll into the fencing. There’s the same feeling of uneasy guilt, watching a Titan fall. A lot of good people will find themselves jobless as this crash unfolds.
So how are the other Titans doing? Is there any hope for their kind?
I have been looking at the quarterly statements of Indigo, the store that I like to buy my hard copies from, and the picture that emerges is not necessarily one of doom and gloom. It’s not all sunshine and roses either.
Although they report a revenue increase over their previous year, they also show a dip in same store sales. The smaller the store format, the worse the sales dip. They credit the increased revenue to the new superstores that they opened during the reporting period. The first thing that I notice when I walk into the store down the street is the vast array of general merchandise for sale. Perhaps that is the saving grace of their superstore format; the smaller stores have little room for GM even though it provides a higher profit margin.
One thing I can’t miss at the front of the store is eBook readers. More specifically, you cant miss the Kobo. The older Kobo is readily available and you can play around with the new Kobo touch but you might have a hard time getting one of your very own to take home and show off to your friends.  Every time I check with the many stores that serve our city, I get the same story, Sorry, we got a load in on Friday but they sold out over the weekend. I want to be angry about this, but I find it hard, as a writer of eBooks, to get too upset when eBook readers are selling like – well like something that sells a lot (lets face it, hotcakes have had their day as the exemplar of good sales).

So why are they selling so well when you can get an iPad and use it to read as well as surf the web and manage your entire life as long as you keep it compatible with Apple? Two things come to mind: price (no explanation needed here) and eye strain. I wouldn't want to read a ninety thousand page novel on a backlit screen, hence the eInk touch.
It’s not something that Indigo is blind to, either. They own a majority share in Kobo and though they attribute a 7% decrease in online sales to eBook migration, they indicate that Kobo readers and eBook sales are the major driving force behind a revenue increase that is more than six times the online sales loss.
It doesn’t stop there. Rather than sit back and see how it goes, they have raised cash and invaded the German market (second biggest book market on Earth) with plans to release a German language reader in August. This reader, giving access to the biggest German library of titles, should do well against the English operating systems of the competition. This is covered in depth in an excellent article by Laura Hazard Owen that was recommended in a tweet by Derek Haines.
I think we will see a future where the only brick and mortar book retailers that survive will be the ones with a healthy eBook footprint. They will carry a different assortment from what we see today because the tail will start to wag the dog. The legacy publishers who manage to come out of this shakeup may well end up mining the eBook market for titles to print. Let’s face facts, commissioning editors make as many bad choices as good when sifting through the thousands of submissions that land on their desks. If they can look at sales stats to find performing authors in the eBook market, they can put together an offer with a reasonable expectation of successful sales. Of course that leaves the eBook Marketing entirely in the hands of the writer, and maybe that's where it should be.
This would leave us with stores that sell a smaller selection of high volume titles at the back of  the store, behind all the general merchandise…
Or maybe I’m wrong.
(by the way, Schumacher went on to win the 2001 Melbourne race despite having a second car destroyed when one of my own countrymen hit him from behind…)

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