The Barnes & Noble Elephant in the Room at DBW 2013

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Digital Book World 2013 was, as always, brimming with possibility, cautious optimism, and the energy of an industry in full-sail transformation.

Within that optimism though, was some troubling data presented by Codex Group CEO Peter Hildick-Smith, which suggested that, despite a shift in reading habits to more electronic devices, there has not been a comparable shift in book discoverability. According to the most recent Codex survey, online selling accounts for 61 percent of book sales, but only 7 percent of discovery. In other words, the physical bookstore showroom continues to play a vital role in readers’ decisions about which book to read next, even if that book is eventually purchased on an electronic device or through an online retailer like Amazon or B&N.com.

The information is especially concerning given the current state of the single largest physical book retailer, Barnes & Noble, whose news so far in 2013 has largely been dominated by poor sales results and impending store closings.

So it was both thought provoking and ironic that Barnes & Noble Vice President of eBooks, Jim Hilt, took the stage for his DBW 2013 presentation to discuss “Selling Everything Every Way” immediately following Hildick-Smith’s presentation.

Hilt gave a compelling talk about B&N’s unique position in the book marketplace with approximately 700 B&N stores, it’s proprietary Nook reading device, and an online store—a combination Hildick-Smith’s discoverability data would also seem to suggest offers a strong opportunity.

What Hilt didn’t mention though, was the current state of the Barnes & Noble business. Same-store sales at B&N were down from a year ago and sales of the Nook tablet fell considerably short of expectations over the holiday, leading some analysts to question the Nook’s long-term viability in the increasing crowded tablet marketplace. Then, just this week, B&N announced to the Wall Street Journal that it intended to close a third of their stores over the next decade—a proactive announcement that openly acknowledges the challenge of managing a fleet of 25,000-35,000 square-feet stores in a book retail era that can no longer support inventory levels of that size—or the rent required to stay there.

“Physical retail works if you protect it,” Hildick-Smith said at the close of his presentation, almost as an aside. “Movie producers do [protect movie theaters]. I would argue publishers are not doing enough to help bookstores.”

As someone who spent a dozen years at Borders struggling with some of the same issues Barnes & Noble faces today, I’m sympathetic to the challenges and ever hopeful that B&N can find a way to navigate through this difficult transition, for the sake of all readers.

But given the current scenario and announcements, we’re all forced to ask: What would the book discovery environment look like without Barnes & Noble? Quite possibly much sooner and more widespread than the decade-long process quoted in the Wall Street Journal article.

In this interview, paidContent reporter Laura Hazard Owen discussed the Barnes & Noble situation, and shared her own opinions about the precarious situation publishers now find themselves, considering a book retail world that does not include Barnes and Noble or Borders.

“The [Barnes & Noble] stores are turning into places where Barnes and Noble has to sell a lot of other products like toys and games and cards and stuff like that and not just books. And independents are great, but a lot of people, the only bookstore they have in their community or near them is a Barnes and Noble and its not like if a Barnes and Noble goes away that a great independent bookstore is going to rise up in its place, so I do worry about them being gone.”

Rich Fahle

About Rich Fahle

Rich Fahle is Founder & CEO of Astral Road Media, an innovative marketing services agency for authors, artists, and other content creators. He is also the founder of Bibliostar.TV, a new video portal for authors and books. At Astral Road, he oversees the implementation of author marketing strategies that fully capitalize on the emerging digital marketplace, including platform and content strategy development, streaming video and audio production, website development, and digital publishing guidance. Prior to Astral Road, Fahle was Vice President, Digital Content, E-Commerce and Entertainment for Borders, Chief Spokesman and Media Relations Manager for the cable TV network, C-SPAN and a manager at Kramerbooks, in Washington, DC.

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3 thoughts on “The Barnes & Noble Elephant in the Room at DBW 2013

  1. Barnes & Noble “international expansion hasn’t yet produced any meaningful or visible results.” No wonder–I live in Denmark and they wouldn’t even ALLOW me to purchase digital books. Signing up for an account was a total waste of time.

    Amazon, on the other hand, not only allows the purchase and in seconds the book is in my device–they pay our 25% sales tax out of their end so our price is the same as for Americans–very nice!

  2. I love B&N bookstores. I did a mini tour in the southeast and the CRM’s were great. The stores that encouraged lots of local author signings, children’s story hours back to back, seemed to have a crowd at the register at all times.

    That said, for self publishing B&N brick and mortars going bye- bye is not such a bad thing. Customers will have no choice but to discover books online. B&N’s online search engine…well, try it for yourself. When you’ve had enough, try Amazon’s. There simply isn’t any comparison between the two.
    For indies this will be a huge boon. Especially to those of us who are already on genre ebook best seller lists at Amazon. Bring on the future. I’m ready.

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