Sometime in the last week, I came across a blog post where someone talked about going into a newly opened Barnes & Noble and how surprised they were by what they found. The store had opened in the space once occupied by a Borders, iirc, and the blogger had had high hopes for the new B&N. The only problem was that, when they went inside, there was little to show that it was a “book” store. A large portion of the main floor was taken up with a display and sales station for the Nook and various accessories for it. Even upstairs, the number of books available seemed to be a great deal smaller than they should have been. Fewer shelves, fewer books, fewer displays. Oh, but plenty of toys, stationary, etc.
As I read the post, I was torn. Part of me was thrilled to know that BN had moved into the large digs and was giving a neighborhood back its bookstore. But another part of me could only shake my head and say that this is part of the problem with the bookselling industry — and with publishing in general. The big box stores haven’t yet figured out that big doesn’t necessarily mean better. Folks don’t go to a bookstore like they do to a Walmart or Target. They go for books, magazines or newspapers, not necessarily for toys, etc. Perhaps instead of opening such large stores with a huge overhead that includes, rent, utilities and salaries, BN should be looking at smaller stores, possibly even boutique stores. It is time for them to realize the old business plan doesn’t work and they need to find something new.
Now, I get that BN is having to face this sort of decision on all sides. It’s no secret that they are having trouble with the Nook arm of the business. It hasn’t made them the money they’d hoped for. There’s been talk about spinning that part of the company off, even talk of selling it. In an attempt to boost sales, for a limited time this month, BN is giving away a free Nook Simple Touch with the purchase of the Nook HD+. The free Nook is an e-ink device usually priced at $79. The Nook HD+ is their answer to the Kindle Fire HD and the iPad. Unfortunately, BN has been a day late with its dedicated e-readers from the beginning. Problems with the HD+ interface and hardware has some folks waiting for the next version to come out. Whether customers will see this giveaway as a great deal or as desperation by a company in financial difficulties has yet to be seen.
If that, along with the falling sales from their physical stores, isn’t enough, BN is now in a battle with Simon & Schuster. The internet has been alive the last week or so with authors talking about how BN’s choice to either not stock their books or to not reorder them is hurting their sales. The basis of the problem is the contract renegotiation between BN and S&S. According to the New York Times, BN has cut back “substantially” on the number of titles it is ordering from S&S. While the company is still ordering, albeit in lesser numbers, titles from the so-called best sellers, the orders of books from lesser known authors are reported to be basically nil. The more well-known authors are worried that their books aren’t being given as advantageous placement in the stores as they’ve enjoyed in the past. The end result is less money in the pockets of the publisher and that means less money in the pockets of authors — and, since the traditional publishing industry lives and dies on Bookscan numbers, it means there may be some authors who will not get new contracts because their sales figures were hurt by this dispute.
Since this is an ongoing contract negotiation, no one is really saying exactly what the problems are between BN and S&S. “Unnamed” sources who don’t want to go on the record allege the issues include BN wanting to pay less for the books it stocks while receiving more for prominent display space. If true, you can’t blame BN for flexing its retail muscle and trying to get more money from the publishers. It is the last major bookseller chain in the country. That makes it a huge cog in the wheel of physical book distribution. Also, according to the NYT, BN has told S&S that at least one other publisher has already accepted the terms it is insisting on in the new contract.
But there appears to be another issue at the core of the conflict as well: which party will bear “the financial burden of e-book discounting” now that S&S has agreed to settle the price fixing suit brought against it and other publishers by the Department of Justice. This has to be an issue with as much, if not more, importance for BN than the issue of payment for display space. As I noted above, their Nook arm of the business hasn’t taken off the way they expected. The company has invested huge amounts of money into its digital arm and without much impact in the digital market. I doubt they can match the discounted prices Amazon (and Apple eventually) will be offering on e-books from the publishers who settled with the Department of Justice. Since the company is already bleeding cash, it has to find ways to slow the flow and start plugging the leaks.
Unfortunately, the bookseller and publisher aren’t the only ones who will be impacted by this dispute. Readers are impacted because the books they want aren’t going to be as easy to find from their preferred retailer. It’s possible, at least in the short term, that Simon & Schuster e-books may even disappear from the online store. (Whether the Amazon haters want to admit it or not, BN has also removed the “buy now” button for e-books before.) But it is the authors who will pay the ultimate price. BN is the main source for Bookscan numbers for the sales of printed books. Every S&S author should be quaking in their boots because of this. New contracts are offered based on those Bookscan numbers. If those numbers drop below whatever the magical number du jour happens to be, many of those authors may find themselves cut loose — and not just by S&S. Other publishers look at Bookscan numbers before signing an author. Oh, the dahlings of publishing and the so-called best sellers probably won’t hurt too badly, at least not in the long run. But the mid-listers, those few who still have contracts, and the new authors will.
The only thing I can say is that this is yet another indication of just how the industry is changing and how the old guard is still trying to cling to the old way. Where everything will finally shake out is anyone’s guess. Will publishing survive? Yes. But in what form I have no idea. All I can say is now is the time to make sure the hatches are secured, the engines fueled and everyone is ready to bail because the sea is getting choppy yet again. As we wait for calmer seas in the sea of traditional publishing, go explore what small presses have to offer and look at what your favorite authors may be bringing out on their own. It’s amazing the number of authors who are now bringing out their backlists.