Can Barnes and Noble be saved?

Barnes and Noble had more declines, both digital and physical.

NYT: "Barnes & Noble’s Strategy Is Questioned as Holiday Nook Sales Decline"
http://mediadecoder.blogs.nytimes.com/2013/01/03/barnes-noble-reports-tepid-holi...

Quote:

“They are not selling the devices, they are not selling books and traffic is down,” said Mike Shatzkin, the founder and chief executive of Idea Logical, a consultant to publishers. “I’m looking for an optimistic sign and not seeing one. It is concerning.”

Quote:

“The problem is not whether or not the Nook is good,” said James L. McQuivey, a media analyst for Forrester Research. “What matters is whether you are locked into a Kindle library or an iTunes library or a Nook library. In the end, who holds the content that you value?”

Shatzkin—a nice man and very smart, but doesn't anyone else ever get interviewed!?—thinks it might be explained by B&N cannibalizing its customers…
http://www.idealog.com/blog/bn-results-are-disappointing-and-one-wonders-if-prio...

So:

1. Can B&N be saved?
2. What does a now post-Borders, post-B&N world look like?
3. Reports indicate indies may have done well ( http://www.shelf-awareness.com/issue.html?issue=1899 ). Do physical bookstores stand or fall together, or can Indies thrive in a post-B&N world?

I don't shop electronically, so I'm not sure - does one "browse" for other materials that one isn't particularly looking for? Is there such a thing as a check-out upsale aisle? If B&N is focusing on electronic customers, they weaken the opportunity to sell more than the customer came for, perhaps.

The Walmart launch of a major title is sad.

>2 2wonderY: Not true, on nearly all book-selling sites they give several other books along similar lines/that others who've bought the one you're looking at have also bought. Often there are plenty of quite tempting titles that show up. More tempting than if I'd wandered around bookstore aisles and had no idea that X title was related to subject/genre Y. Obviously in a store it's different, something catches your eye in a different manner, but it's the same principle, and it works.

Brick and mortar stores do well when their strategies involve services and features that are not reproducible online. City Lights in Sylva, NC just held, not an author reading or poetry slam, but an early morning "sound walk" of the neighborhood hosted by a local poet with a new book.

They find creative ways to integrate themselves into their communities so that their customer loyalty becomes stronger. It's not out of bounds for B&N to follow a similar strategy, but it's harder to turn the corporate ship. They are slower to adapt.

B&N can be saved, but it won't look like it does now.

I have a Nook Tablet, bought it last year and I could say that it was not the best of items. Many because I was looking for more than an e-reader, and found out too late that I could sideload(import) anything from the Google Store. Just to have some of the same uses on my Android phone would have cost $100+ over the cost of the device.

If they were banking their future on the Nook it was a bad move to lock it down for starters. They don't have the material to compete with either Apple or Amazon nor are they savvy enough to provide one-stop experience to rival them both.

Like Borders they have too many dumb physical stores. They are not exclusive, where you would have to attend a university or drive hours to get to one. They need to go back to their future, from mail-order they came from mail-order they return. Online just skipped sending you the catalog, and the B&N of 15 years ago could have crushed Amazon like a bug. They need their A-game on that one.

One hope is to use their strength with academic publishers and university presses to drive Nook Study, which is not compatible with the Nook. Drive the costs of books down, esp. those optional titles that Profs. love for students to read, yet they won't buy because of price. Create an in-house academic press, a music label that promotes college and alt music. Make a rival to Blackboard and tie the platform into Nook, give that platform away for FREE. Push the design and the function of the Nook using your customer base. I.e. listen to Joe College, he'll tell you what's cool tomorrow.

Then push into K-12.

Center B&N around the student's life in such a way that Apple and Amazon can't get in. Apple survived the Microsoft onslaught through it's niche in K-12. Facebook started through university tie-ins.

And when they leave they will take it with them and it will be part of their lives like an iPad or a Kindle never could.

This takes vision. I don't see that with B&N today. It might be too late.

>4 southernbooklady:

I think that's indies advantage, and may keep them around. But I see a long decline. Personally, I shop at indies less than I want to simply because they don't have the selection. B&N does. I'm worried that small stores with a hand-picked but limited supply of literary fiction, for people who buy at Whole Foods isn't enough.

>6 timspalding: I think that's indies advantage, and may keep them around. But I see a long decline.

another thing they're doing is what might be called "micropublishing." There's a lot of interest in that in the industry right now.

THAT is f-ing stupid.

You know my feeling. Indies need to PUT THEIR STOCK ONLINE where I can see it. I find it ridiculous I have to call up every bookstore around me to find out if they have a title. It's a waste of my time, and an insult to my intelligence. Fortunately, there are fewer and fewer around me every year.

Maybe if they sold refrigerators too…

They're trying that… with toys. It makes a certain amount of sense. Childrens' books are one of the things it's hardest to buy without seeing and to buy later on Amazon. (Once little Tommy sees the book, he WANTS IT!) My Books-A-Million is overrun with toys and games.

micropublishing does not preclude putting their stock online. It's more a question of identifying hyperlocal demand and taking advantage of it.

I just don't see it. And I think it's distracting.

The problem with Indies putting their stock online is making sure it is current. Calling them is much better than believing what the site tells you and finding out they don't have that specific book even if their site claims they do.
Unlike big chains, number of copies is way lower in this case...

>12 timspalding:

So when Malaprops Bookstore, as part of a celebration of their 30th anniversary, got all their favorite local authors to write a serial novel ("Naked Came the Leaf Peeper") which they then turned into a POD and ebook, and sold literally hundreds of copies...that doesn't strike you as a valid business strategy?

Even with big chain bookstores, my experience with what's in their inventory often overstates what's actually on the shelf. Books migrate Sometimes they emigrate.

When I'm looking for a book, I first check their inventory. Then I call and make sure a human being at the store can actually put their hands on the book (and preferably hold it for me). Only way to avoid a wasted trip.

>14 southernbooklady:

No. Let's say they sold 500 copies. It cost $15. Let's be generous and say they made $5 of profit. That's great. That's $2,500 dollars. That's not that much money, and it's not repeatable. You can't go back to authors again and again, asking for free help. If there was money in this, the people to make it are people who actually have a STRENGTH in this—publishers!

There are lots of great ways of making money. Bookstores could do all of them. But so could anyone, and people who do something for a living are going to be better at it than people who don't.

I think your numbers are off, there, Tim. But even assuming that it is true that such an event is "not repeatable" (after all, no author reading is "repeatable" -- you just end up scheduling other author events.) I don't see why bookstores shouldn't take advantage of a market niche they see needs filling.

>17 southernbooklady:

Sure. And even if it doesn't make money, it builds community—which indies need more and more. I just don't see this amounting to much. Besides, librarians are all aflutter about exactly the same thing—become publishers and content-creation hubs. It seems to me a really strange response to digitization—"The forest fire is spreading. Let's learn to play the kazoo!"

14, 16: Let's look at cost (whether donated or real)

- I think a POD book with a four-color cover is running $2-3 a copy (my figures on that aren't current)
- The authors are getting paid $100-$500 apiece depending on who they are and where they usually get published.
- The cover artist gets $100-500 (that's a guess, but the work involved would merit that)
- The copy editor (and a serial novel needs a lot of copy editing) gets ca. $10 a page
- The editor who keeps all the writers on deadline, makes sure the story has a beginning middle and end, negotiates who changes what etc, gets ca. $40 an hour

Low-balling all those numbers and I come up with a profit of about $6.50 per book, which is pretty close to Tim's. So, if they make much more, it's because people donated a lot of time and effort. And if writers have to start donating time to keep the people who sell their books afloat ... well, we're certainly no longer talking about a business.

>19 aulsmith: So, if they make much more, it's because people donated a lot of time and effort.

Well, I'm not sure about "donating" -- as an in house production Malaprops folds it into store operations. That includes things like copyediting, although I don't know about cover design. Plus, those are one-time costs.

Here's another example. I live in a beach town that is a tourist destination. Population and traffic quadruples in the summer months. Many of these tourists are new to the area, and of course they are going out to eat. So one year an enterprising person took it upon themselves to visit local restaurants, get a recipe from each one, and do a little pocket sized cookbook where the recipe was on one side, the information about the restaurant was on the other. The whole thing retailed for $6.00. No authors to pay, nothing to pay except print costs. And I am not kidding when I say we sold thousands of these little things over the years. If a store decided to publish something like that, it's really all profit once you've paid for the initial design.

The point being, it was a market waiting to be tapped, that never would be by a national or even regional publishing house. Bookstores operate so close to the line (2% profit margin is considered highly successful) that a single hot title or successful event can mean the different between a loss year and a profitable one.

>20 southernbooklady:

I'm not REALLY disagreeing. But there are a lot of little things that bookstores can do. Ultimately, they're little. And digitization is big. Barnes and Noble isn't failing because they got little things wrong, even a LOT of little things. I don't think bookstores can little their way out of this.

I think one of the key lessons here is to avoid "walled gardens" as far as possible. For books I have a Nook but generally read freely replaceable out-of-copyright books or loan them from Overdrive, in the same way as for music I have iTunes but I make sure that all my music is un-DRMd MP3s. Once you're stuck in a walled garden with content locked to a Nook or a Kindle or another proprietary device, it stops you switching even if the competitor comes out with something miles better. Think ahead when you're acquiring content!