January 7, 2013

The wrong goodbye of Barnes and Noble


Maybe you’ve noticed that there seem to be a lot of Barnes & Noble superstores closing lately? Not just stores in remote locations (like, say, this one in upstate New York), but in some of the nation’s largest metropolitan shopping areas, such as Los Angeles, San Francisco, Philadelphia, Washington, DC, Seattle, Chicago, two stores in Dallas, another in Austin, and Manhattan. And that’s just in the last 30 days or so.

What had been a slow shrinkage as leases ran out — a store here, a store there — turned into an avalanche after Thanksgiving. Stores that should have been well-stocked for the holidays were instead out of inventory and passing time until the end of the year.

For a couple of years I’ve been predicting in column after column that B&N was going to get out of the brick-and-mortar business of selling books, but seeing it finally kick into high gear has been no fun. If you include the company’s college stores, this is going to mean 1362 bookstores disappearing from the American landscape — less than two years after 686 Borders stores disappeared.

The big chains deserve opprobrium for their vicious tactics against America’s independent booksellers, certainly. Back in the last century, I wrote a column attacking B&N for putting indie booksellers in Melville House’s birthplace, Hoboken, New Jersey, out of business with under-pricing, as if selling books was like selling widgets. Can you guess the rest of that story? Having poisoned the well, the Hoboken B&N itself went out of business, leaving the town — a big Manhattan bedroom with lots of well-educated, well-off residents — without a bookshop, probably forever.

And yet, and yet … that development gave me no pleasure, nor does the fact that this scenario is playing out across the country with increasing frequency. And my brother and sister indie fanatics shouldn’t get too righteous about it either. Two thousand fewer places for people to be exposed to books is pretty obviously not good for our culture.

Perhaps surprisingly, it’s not good for business, either. Two thousand bookstores vanishing would represent roughly half the total bookstores in the country. Even though many indie bookstores are thriving right now, thanks in large part to the disappearance of some cutthroat competition, how much longer can they thrive if books are simply becoming so vastly invisible?

It gets less subtle than that. Surveys say “showrooming” — seeing a thing before buying it — is an integral part of buying books online. One survey I wrote about a year ago posited that 40% of the people who buy books online looked at them in a bookstore first.

A New York Times report by David Streitfeld two weeks ago took the notion a step further. Noting that “the triumph of e-books over their physical brethren is not happening quite as fast as forecast,” Streitfeld floated the idea that this may be due to the “counterintuitive possibility … that the 2011 demise of Borders, the second-biggest chain, dealt a surprising blow to the e-book industry. Readers could no longer see what they wanted to go home and order.”

Got that? The closing of bookstores selling print books may also be hurting the sale of ebooks.

The only logical conclusion one can draw from all this, of course, is that if B&N goes down the entire industry is fucked. Booksellers, publishers, authors, agents, librarians, and oh yeah, readers …

But brace yourself because it’s going to happen, and in a big way. Not only is B&N going to get out of its brick-and-mortar business — as I say, the process is clearly already underway — but the other shoe seemed to drop last week, when the company released its holiday sales report, revealing that its plan to become a digital bookseller is in shambles, and the whole enterprise is in jeopardy.

As a Publishers Weekly story reported, store sales declined nearly 11%, while NOOK sales tumbled 12.6%. There are no doubt a lot of reasons for this. Mike Shatzkin has a couple of interesting observations about the quality of B&N’s bookselling efforts, for example. And I’d say the Department of Justice abetted B&N’s demise with its support of Amazon‘s effort to lower prices: Nook sales were great when agency pricing was in place, with B&N taking as much as 30% of the digital market away from Amazon.

But whatever the reason for it, B&N’s holiday numbers were disastrous. As one analyst told the Wall Street Journal,

“What concerns us is that as the overall market gravitates toward color tablets, you’d have expected that Barnes & Noble would have been able to maintain its share because it introduced two new color tablets during the quarter,” said Morningstar analyst Peter Wahlstrom. “They aren’t behind on the tablet front in the sense that their devices compare well with others, but they are behind in terms of marketing, awareness and adoption. And that’s critical.”

Perhaps the most disturbing thing about all this is the fact that, as with the demise of Borders, the demise of B&N has nothing to do with what its customers actually wanted, what’s best for mother literature or free speech, or anything other than made-up trends covering for killer capitalism. There’s still plenty of evidence that people like bookstores, for example, and even sales of hardcovers — let alone print books in general — are holding on. And so the lust for higher margins — whether from Godiva chocolates or ebooks — turned into fool’s gold for B&N. It’s perhaps a typical death in the Free Trade era, when companies lose all sight of their identity in the blinding light of the bottom line … but it’s the wrong death for a bookseller.

But as I say, right or wrong, for this bookseller, it’s coming. (A highly placed Big Six exec I respect to no end told me to look for the death of B&N in two to three years. That was two years ago.) Publishers are on a crash course learning how to survive without any volume booksellers, and in an environment with one retailer (oh, guess) representing as much of its business as — well, who knows? Eighty percent? More? That alone is likely to make publishers give up on printing books — there’s no sense in printing books if your main outlet isn’t going to order any until they sell them — and join the digital “revolution.”

In short, B&N’s scorched earth policy of the 1990s has ultimately left us with, well, scorched earth. If the book is going to survive it, it’s going to take some real revolutionary activity, indeed.


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Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House. Follow him on Twitter at @mobylives