Wednesday, October 6, 2010

Are publishers and bookstores in the same boat when it comes to e-books?

Not too long ago it looked like the book industry is a unite front when it comes to dealing with the new challenges of the digital era. When talking about the the future of books or trying to answer questions like 'Is Print Dead?', the general notion was that bookstores and publishers are in the same boat.

But are they?

I believe that right now the answer is no. While both publishers and bookstores need to deal with difficult challenges, it looks like publishers in general are better positioned than bookstores.

Here is some evidence: Let's start with publishers. Last month Publishers Weekly reported on the results of the five largest trade publishers in the US:

"Four of the five houses reported significant changes in their operating performance in the first half of 2010 compared to one year ago, with big books, or the lack thereof, playing a major role in the shifts...In general, the major houses were optimistic about the second half of the year."

On the other hand, when it comes to bookstores the headlines aren't that positive:

Does The Independent Bookstore Have A Future?
(Treehugger, October 4, 2010)

Borders Posts Net Loss of $46.7 Million for 2Q
(GalleyCat, September 1, 2010)

Barnes & Noble to Shutter Upper West Side Superstore in NYC
(GalleyCat, August 31, 2010)

Now, this is of course generalization, as you still have many publishers struggling and new bookstores that are opened, but I believe it reflects the current state of the book industry, where bookstores have much harder time to adjust to the e-book era than publishers.

Don't get me wrong. Publishers have their own unique challenges to deal with and you can find some of them on a great piece that Stephen Page wrote on the Guardian ("
The future of publishing takes shape"). Still, it looks as publishers have more flexibility and capabilities than bookstores to meet the new e-challenges. As Publishers Weekly reports from "This year, e-books are looked at more as an opportunity than a threat." And yes, it is referring only to publishers.

At least for now.
Both bookstores and publishers are making more money from sales of e-books -B&N CEO reported last month to investoers that "over the last two quarters, these eBook sales have been driving the growth of our BN" and, according to Publishers Weekly, at the end of June, e-book sales accounted for about 8% of adult sales at the publishers. Still, book sales at bookstores are declining while publishers manage to show better performance. Contradiction? Not really. Readers just go elsewhere to buy their books, paper or electronic.

The conclusion is that publishers look more prepared for a hybrid future of both paper and electronic books, although they still have to prove they are capable to adjust their traditional business model to the new era and be able to provide an added value to both writers and readers. Bookstores still need to figure out how to respond to the e-book challenge. If for publishers, e-books begin to look like more as an opportunity, then to bookstores, it's still both a risk and an opportunity.

Raz @ Eco-Libris

Plant a tree for every book you read!