Who Wins With Digital Books: Independent Stores, Maybe

The New York Times has always had a slightly odd relationship to the book trade. The joke in the publishing industry was that it took 800 jobs lost in a steel plant to make the front page of the paper of record but only 8 editors at Random House. One might easily assume that the editors of the paper, all of whom wrote and published book before ascending to the pilot’s chair, considered publishing to be something more than just a way to distribute stories.

At least, that’s the best way to view today’s editorial on the book business entitle Read On. (One looks twice at the headline before realizing there is indeed no exclamation point.) Although the short piece contains some bizarre howlers like this:

Books, as a cultural product, face important pressures. The pursuit of blockbusters by big publishers and retailers means that potential readers are exposed to a narrower set of titles.

It would appear that the New York Times is ignorant of the geometric explosion in the number of book titles published over the last decade and the increased number of distribution channels. Blockbuster sales are a product of more efficient distribution, not myopic gatekeepers or declining standards.

Once past that bit of priggishness, the editorial is a somewhat defiant claiming that books have fared better than music which, it notes, saw sales cut nearly in half in the last decade.

The resilience of the book business may be because of demographics. Like jazz, which is less prone to illicit downloads than hip-hop, books cater to older, less Internet-savvy customers. Publishers also avoided the recording industry’s mistake of wasting precious time suing customers and have rightly focused on promoting cheap and easy ways for them to download books legally.

That paragraph may be nonsensical but it does support a valid conclusion. Publishers have done a better job than record labels. The little-noted feature of the Kindle is the way that cloud publishing protects the rights of the publisher. Instead of sending copies of the book to the reader’s computer, the Kindle keeps the ebook within a secure environment.

That’s not the only bulwark defending books. Publishers deserve a lot of credit for standing toe-to-toe with Amazon over their predatory pricing scheme. Books ought to be cheaper because of the reduced cost of distribution. But Amazon has consistently promoted unrealistically low prices.

By introducing the agency model, publishers defended their ability to price their own product. Unfortunately, we’re only at the beginning of publishing’s descent into digital distribution. As Publisher’s Marketplace noted today, the Digital Book World Conference saw two financial analysts–Goldman Sachs analyst Matt Fassler and Susquehanna Financial Group’s Marianne Wold.–discussing the dominant book business:

Fassler believes that physical bookselling retail will continue to exist, albeit in downsized fashion. (But even in the height of the superstore era, he feels it was a better economic proposition for the customers than the operators.)

Wolk believes that Amazon makes little to no profit from ebooks as they try to maintain dominant market share, and doesn’t even think it’s a corporate goal to make much money from the sale of ebooks. She noted that “the consensus among Amazon watchers is that they assume Amazon will run roughshod over brick and mortar retailers” in the book business.

So, while e-books may have a promising future and the publishing industry defended itself against price deflation, the fate of the bookstore itself, is most likely going to be very different in a few years from what it is today.

Let’s make a bold prediction and say that independent bookstores will re-emerge as the center of the print book business. Barnes & Noble and Borders having long since gone out of business. print books will be sold at big box retailers for the hits and in small specialty shops for everything else. Selling books won’t be any easier as a business and we’ll never see the several thousand bookstores that once dotted the land again.