>The Week in the News

>Sorry I’m a little late getting today’s post up. I didn’t write it yesterday because I wanted to see the latest headlines before deciding on the day’s topics.

First, I want to brag on my hometown. Another reason I didn’t write the blog yesterday was because I spent most of the day at our new library’s grand opening. In this time of libraries closing or losing funding, our community has rallied around the library and build a wonderful new facility. Hopefully, I’ll have some photos next weekend to post. What is really great about the new building is the fact our teens are invested in it. Several years ago when the architects asked for input from the community, half a dozen different groups got together and drew up their ideal floor plans. The teens’ plan is the one that was chosen. That invests them in the library and their support was clear yesterday.

Any way, on to what’s happening around the publishing world.

I’m going to keep with local news for a moment. Earlier this week, Amazon sent out notices to its employees at the distribution center near DFW Airport that they would be shutting down the center. Why? Because the state comptroller wants to collect millions of dollars in taxes and penalties it says Amazon owes. Sorry, this is a distribution center. A center that employs a number of people. A center that was going to expand and hire up to another 1,000 workers.

Muddying the waters even more, Gov. Rick Perry has publicly announced he is firmly against the action taken by the comptroller and is going to do all he can to keep the distribution center here. The next month is going to be an interesting battle of wills between the governor, the comptroller and, quite possibly, the state legislature to see who blinks first. My take — unless the comptroller can prove the distribution center is actually a sales center, Amazon will be asked to stay. But at what cost? What sort of concessions will the state have to roll out to “apologize” for an ill-timed, if not ill-conceived, move by the comptroller?

The New York Times revealed its best sellers list this week and, for the first time, e-books were included. I haven’t had time to sit down and really study it, but the one thing that jumps out is the fact that the top five titles on the combined print & e-book list are the same as the top five titles on the e-book list. Two titles flip-flop positions, but that is the only difference. The same can’t be said for the non-fiction top five. Does this mean there are more fiction e-titles being purchased than non-fiction? Probably. What will be interesting is to see the reaction of traditional publishers when e-books brought out by authors digitally publishing their works on their own or by small digital presses break into the top ten.

Finally, no blog about the industry can close without mentioning the latest news about Borders. I don’t think it surprises anyone the speculation is now rife over whether or not Borders will be filing for bankruptcy this week. Borders hasn’t publicly confirmed this. However, it doesn’t take much searching online to find posts from employees or people “in the know” who say it’s a done deal. Now they are only waiting to find out if their stores will be saved.

What is of concern to me — beyond the worry for my friends and acquaintances who work for Borders — is how this will affect the publishing industry as a whole. Borders owes publishers and non-publishing vendors thousands of dollars for stock already in stores. (This figure may — and probably is — be substantially larger. We won’t know until the bankruptcy papers are filed.) A number of publishers have already ceased shipments to Borders. It’s a move I can understand. Publishers are, on the whole, struggling themselves. They can’t afford to ship product without guarantee of payment. On the other hand, how can a bookstore make money if it doesn’t have books to sell? It really is one of those “damned if you do, damned if you don’t” situations.

But there is another factor to be considered. Ingram continues to ship books to Borders when so many of the publishers have stopped. Ingram is the distribution outlet for a number of publishers, many of them small to mid-sized publishers who don’t have their own distribution arm. What the immediate and long-term impact this will have on these publishers, as well as Ingram, when Borders files for bankruptcy remains to be seen. But it is worrisome.

I hope Borders can find a way to come through this without completely going under. I’m not sure it can. What we have to prepare for is that this isn’t the last of the upheavals that will happen in publishing over the next few years. This is just the opening volley. So grab onto something and hold tight. Publishing will come through this, but it is going to be an interesting ride for awhile.

(Cross-posted to The Naked Truth)

15 thoughts on “>The Week in the News

  1. >If Borders can keep their doors open, those small to medium publishers may get a big boost in their sales – less competition for shelf space, less likelihood of being left in a box in the back room.I can see where the risk might be considered worth the extra exposure for their authors.

  2. >Pam,The problem is that a lot of those small to medium publishers are the ones they haven't paid so far. I don't know how long they'll be able to keep floating books to Borders without payment of some sort.There's another issue involved as well. Right now, Borders is one of those chains Sarah has talked about in earlier posts — the ones that don't allow local stores to order books based on what their clientele wants. In other words, orders are made from headquarters. It's so bad that when a teacher assigns a certain book or reading list, she has to pay for the books — ie special order them — or risk not having them in the store. It's something that frustrates not only the customers but the employees of Borders as well. Until Borders goes back to the business plan where there is more local control, they will still be shooting themselves in the foot. Yes, people want to be able to go into a store and buy the best sellers, but there are regional interests as well. This is something big box stores like Walmart have learned. It's time bookstores did as well.

  3. >Pam,keeping their doors open and paying back bills are not, I'm afraid, the same.Amanda,Part of what I love about your area, enough to consider it as maybe a place to move to eventually if the Colorado climate continues to get to me, is that civic spirit obvious in the library. You people are just so… alive. Particularly these days, that's a wonderful thing.

  4. >As long as the books aren't harmed, and are available to be returned and re-shipped elsewhere, the small publishers aren't really risking too much except for dangerously over-extended credit-vs-cash financial postures. The biggest risk to them that I see is that failure means they have a ton of stock to take back, and a serious curtailment of their ability to put that stock in front of prospective buyers. That, and somebody (I don't gok the structure of the transaction well enough, so I don't know if it's the publishers or Ingram) is out a whole bunch of shipping costs that Borders will probably be unable to pay if/when the axe falls.The way I look at it — as a writer — is that every story or book I push out the door is essentially a lottery-ticket anyway. If I had stories on their shelves and that avenue didn't pan out, I've lost something potential, not something "real". I wouldn't like it, but I'd survive. I'll still keep writing, and submitting, regardless. "Don't let the fear of striking out keep you from playing the game," as the saying goes.

  5. >Stephen, as for returning books, you're right — up to a point. The issue is that some of these, and no one but Borders knows how many, have been sold. That's money in that isn't going back out to the publishers and to the authors. But what's worse is for the authors because those books will be shown as returns…knocks against the author's numbers. Just look back at some of Sarah's and Dave's posts about the impact of that sort of thing.But you have the right attitude as a writer. You have to keep writing and submitting. It's the only way to get your work out there to the reading public. (Yes, yes, I know anyone and their dog can self-publish electronically now, but there are problems with that which I'll discuss in another post.)

  6. >It's looking ugly on the Borders front no matter which way you parse it. If they do go into bankruptcy, any money in the kitty and books sold will go to paying off the secured creditors – who aren't the publishers.Unless there's a bailout, of course, but bookstores don't have quite the same level of political clout as certain other parties.Unfortunately as writers, the best we can do is keep writing, keep trying to sell, and keep our fingers crossed behind our backs while praying to the deity of our choice. Not, alas, that this changes much.

  7. >Amanda, I see it as more than just an effort to "get my work out there to the reading public". I have to keep submitting, and other writers do too, even if we don't have any confidence at all in the current state of the process. We HAVE to, because there has to be water in the hose. Otherwise, the hose will dry-rot and collapse.The various players, both the status quo ante movers-and-shakers and the folks (like NRP) who are emerging to challenge them, MUST have grain continuously moving through the mill. The evolving processes have to have a clear-and-present market-based need to keep evolving. And we CAN'T lose the customers, the end-players in this process, or it won't matter how elegant the newly-evolved structurs end up being. Customers MUST have a continuous stream of stuff to look at and consider buying, or they'll find other ways to scratch the itch that buying fiction currently scratches.

  8. >Amanada,Those small to medium publishers must realize the risk they are taking. But as you posted, they are still sending books to Borders. There must be something justifying taking that risk. Jumping on a one-time opportunity to take up larger percentages of the shelf space and possibly hook new readers is all I can think of.

  9. >Sarah, you're right about our area, at least our city. We learned the hard way what it is like to have our library taken away from us. When that happened, the community really pulled together. If it hadn't, we never would have gotten this new facility.

  10. >Kate, you're absolutely right. First, that Borders is going to change. The only questions are how much and, more importantly, if it will survive. I don't expect a bailout. For one — and I know I'm getting very, very close to the no politics line — I don't think the American public would stand for it. For another, honestly, the loss of a bookseller will not have the impact on our economy the way the loss of an automotive manufacturer would.You're also right about what we, as writers, have to do. I just wished we weren't in the 'duck and cover' mode.

  11. >Pam, those small and medium publishers know the risk. But the reality of the situation is that they most of them don't have independent distribution streams available to them. They are reliant upon companies such as Ingram and Simon & Schuster for distribution. That means they don't have complete control over where their books go.Also, I know of several small to mid-sized publishers that have stopped shipping to Borders because of the money situation. They simply can't afford to print books, ship them and not get paid for them. They also don't want to take the hit for returns any more than the authors do.There's something else to take into consideration. Even if those smaller publishers are willing to take the risk, Borders has not — yet — shown any signs of giving them the extra shelf space. Their orders still come from one central office for all their stores. As I said earlier, this simply isn't a working model. Regional presses aren't getting the exposure locally that they need — or that their readers want.Unless and until Borders makes a number of changes, I don't see the smaller houses risking what could be their own existence for the possibility of a bit more shelf space.

  12. >I wonder if one the problems with big name books stores is that they marketing themselves as high end products. Most of the big stores in Melbourne are in the CBD or have space in the ritzier shopping centres. While it might add some glamour to peoples buying experience to have the store right next to fashion boutiques etc one thing is for sure, it also costs a lot for that experience.Perhaps stores should be looking at being between the local butcher and the fruit shop, places where people go for necessities rather than fripperies. People can think about getting a book at the same time they pick up their bread and milk.

  13. >Brendan, you've hit one of the major problems Borders, Barnes & Noble and others are facing. They started out as storefronts in shopping centers — often high end or at least high priced lease-wise. Then, as they started to expand, they built free-standing stores or actually became anchors at shopping malls (even higher cost leases). As they did this, they began closing their much smaller affiliate stores (Waldenbooks, etc) that were inside malls. Add into that what I truly feel is an over-saturation of the market and you have a major real estate debt issue.I saw figures last week about what Borders owes on leases right now and it's worrisome. According to the figures I saw, Borders owes much more than it is currently worth. Add to that the fact most, if not all, of their stores are currently under lease and the average lease won't expire for eight years and, well, you can see what the impact can be on the real estate market. This is especially true when you think about the fact that it is forecast that they will be closing somewhere between 200 – 300 stores when/if they file bankruptcy or get refinancing.I really hope they find a way to survive. However, to do it, there has to be major restructuring and a change not only in their business plan but in their corporate philosophy.

  14. >Just thinking out loud here. Part of what Borders (and other big box book stores) seemed to bring in was a large inventory. Suddenly instead of a few names or one shelf of science fiction hidden somewhere, they had racks of science fiction. Or pick your favorite genre. But, of course, a large inventory has its own problems (like large remainders — yes, they don't all sell).Anyway, in competition with small bookstores, having that large inventory (and bulk buying power to twist publishers' arms on pricing) certainly was a plus. But then came Amazon — with the inventory that never stops. Y'a know, if they merged the two approaches — use the store on the corner for browsing, but the inventory actually includes a whole hidden pile of everything anywhere in the system, and we'll deliver it (for free/small fee) soon — they might have something? I mean, the browsing experience is what Amazon lacks, really. And that's what Borders offered, more than anything.

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