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Monday, August 16, 2010

Will Book Stores Go Away As eBooks Take Hold?

Barnes and Noble Nook
There is a great deal of speculation about the fate of book stores as ebooks become more and more popular.  In fact, I get asked that question a lot.  In the last 22 years of working retail and 15 years managing in stores, I've seen digital media transform businesses a great deal.  And the short answer in terms of book stores is . . . they will stay.  Will all stay?  No.  But many will and the sustainability of those businesses will depend on their ability to evolve and compete in the digital world.

Take Barnes & Noble for example.  This company has fully embraced the digital age (and the future of it) in terms of books.  Their ebook store is one of the most powerful and comprehensive initiatives for readers.  The Nook is one of the best ereader devices on the market.  And the competition knows it.  Amazon has a good brand and did a great job with the Kindle, but if you haven't noticed . . . everything they are doing now are reactions to Barnes & Noble.  This includes price (price drops twice now), device options (WiFi version), mobile apps, etc.  The biggest difference still being is that the use of Kindle does not provide users options outside of Amazon.  Nook is very open-ended and provides users more flexibility to use the device with other sources for content (i.e. libraries).

So why is Barnes and Noble 'up for sale'?  It has to do with stock price and is not about financial issues with the company.  Founder of what Barnes and Noble is today, Len Riggio (Chairman of the Board), is very passionate about the company and literacy in general.  To insure a solid future for the company, the board has decided to look at a possible buyout of the company due to some investor issues.  The feeling is that the stock is highly undervalued. The timing of this in relation to the digital evolution is more coincidental than anything in my opinion.

Borders is a different story.  They have actually been having financial difficulties for the last several years.  Their entry into the ebook market and current strategy is weaker than Amazon and Barnes and Noble due to the fact that they still do not provide their users an over-the-air delivery option for purchasing ebooks.  You have to hook up to a computer to get ebooks pruchased from them to the ereader itself.  For Borders, their issues were already present.

So what about indie stores?  Independent book stores have always found success in niches that they stay true to and are good at.  Used and out-of-print, antique books, local authors, etc.  Those that utilize the online avenues to continue to reach wider customer bases outside of their local communities will continue to do well in my opinion.  Will they have to compete in the ebook market to sustain themselves?  That depends on their business model really.  For those niche types of indie stores, ebooks is not really a factor in many ways.  Indie stores that primarily focus on new book sales will need to have a presence in the ebook market.  What's interesting compared to other digital media forms is that indie stores can get into 'play here'.  Adobe Digital Editions offers indie stores the ability to provide ebooks to their customers that can be used on a variety of ereaders.  So they do have the option to expand their selection and services to their customers.

Apple iPad
What about Apple and the iPad?  Somehow the iPad became lumped in with eReaders in terms of a device.  What most don't realize is the battle that has existed with Amazon and Apple for some time now that started over music.  Apple had an awesome grip on music sales with the success of the iPod and its iTunes store.  Amazon began undercutting iTunes pricing and lauched an application that allowed customers to purchase music that automatically dropped the file right into a users iTunes library.  So the entry into the ebook business with the development of the iPad was a natural competitive progression and also somewhat of a 'Take that Amazon' shot if you ask me.  The iPad is awesome and opens the door to some amazing new technology advancements, but an LCD display is not always the best reading experience as most find.  eInk is still the better reading experience since it provides a paper-like display.

What about the book itself?  Physical books (I truly dislike the recent phrasing of 'dead tree books' by the way) will not go away.  In fact, no projections show they will.  Actually the sepculation of them going away is the same exact specualtion that has been applied to CD's and DVD's.  Both still sell well and will continue to sell for some time.  No, the media industries can not support all of the exisiting competitors as formats change but that is nothing new throughout the history of businesses as society changes.  Companies still exist that make saddles for horses.  There just aren't as many with the invention and wide-scale adoption of the car.

It's too early to tell what the true impact of ebooks and digital media in general will be on a large scale.  Book stores will remain and continue to be great community hubs.  Yes, some may go away.  It would be naive to think otherwise.  The real truth with ebooks is that they are a truly exciting new format for the book itself and are providing some very exciting new services in the book industry such as being able to reach more readers than ever before and exciting new publishing option for new authors.  Be careful of some the news and opinions.  Positive is not always the most attractive news as we all have unfortunately come to know.
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