From the interview:

I approached the prospect of buying Politics & Prose, much as a journalist would, writing a story about the state of the independent bookselling industry, identified a number of bookstore sellers around the country who I wanted to talk to, and set out to interview them and find out how they have managed to survive, what their views were about the future of the industry, what they were doing and I came away with a whole set of impressions, but most of all, very encouraged about the future of the independent bookselling business.

A joint production of Digital Book World and Astral Road Brand Media: http://www.astralroad.com/. Founded by Rich Fahle, Astral Road Media is a full-service digital media agency, providing content strategy, design, video production, and other creative forms of social outreach for authors and content creators of all types.

Is the Borders Bankruptcy Saga Finally Going to End?

Sunday was the deadline for potential bidders to line up for the Borders bookstore chain, but no one stepped forward: Is this the last gasp of a dying retail empire? Without the guarantee of “stalking horse” bidder private equity investor Jahm Najafi, this week might be the final end to Borders, as the bankruptcy-court auction scheduled for Tuesday inches ever closer.

UPDATE: According to Reuters, Borders has canceled their Tuesday auction and instead will liquidate 399 stores. In a statement, Borders President Mike Edwards said “We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, eReader revolution, and turbulent economy, have brought us to where we are now.” Bloomberg reports that Borders landlords and creditors, including Kobo, have filed objections to the liquidation.

Before the weekend started, Edwards sent this letter out to employees, announcing the withdrawal of Najafi as the stalking horse bidder.

Why had Borders’ creditors objected to Najafi? Publishers Weekly has a useful run-down of creditors’ objections to the Najafi bid, but the New York Times blog DealBook has a direct link to the creditors’ court filing detailing objections, if you’d like to see for yourselves. From The Wall Street Journal on the latest in Borders’ bankruptcy woes:

But creditors, including publishers and landlords, objected to the bid’s structure, saying it would allow Mr. Najafi to liquidate Borders after he bought the company. The creditors argued that a backup bid from liquidators led by Hilco Merchant Resources and Gordon Brothers Group that could pay them between $252 million and $284 million made for a better deal….

Mr. Najafi, whose Direct Brands unit owns Book of the Month Club, had been willing to relinquish the clause in his offer allowing him to liquidate Borders to appease creditors. But in exchange, he wanted large publishers to commit to shipping merchandise to Borders on normal terms that allowed bills to be paid later instead of right away. Mr. Najafi wanted those terms so he would have a level playing field with rivals such as Barnes & Noble and Amazon.

At least one publisher wouldn’t budge, and Mr. Najafi declined to alter his terms. Borders then pivoted to naming liquidators the opening bidders in the chain’s auction.

Tomorrow’s court-supervised should open with a bid from Hilco Merchant Resources and Gordon Brothers Retail Partners LLC, a coalition of liquidators. According to Portfolio.com, others, Najafi included, may also submit bids.

A little bit off the beaten path, David Johnson over at Business Insider has a quick context piece about the “liquidation business” and about how bankruptcy procedures have changed since 2005.

On a more local level, let’s not forget that there are 399 remaining Borders stores and the jobs of 11,000 people are at stake. Municipalities are preparing from the worst, anticipating major shutdowns, as in this look at the remaining stores in Boston. As reported at Crain’s Detroit Business, in Ann Arbor, Michigan:

Landlords of the 22 local stores are watching the case closely, as it may mean their leases could be terminated and they would need to find new tenants.

“In general, the operators of the stores have been looking forward to the potential of a successful bidder to operate the stores,” said Paul Magy, an attorney with Southfield-based Kupelian Ormond & Magy P.C. who represents 15 operating stores.

“But it’s not a foregone conclusion that it won’t be the case.”

Will Amazon Buy The Book Depository Over Objections?

A few weeks ago, Amazon announced that its intention to acquire UK-based online bookstore The Book Depository, which according to some reports, offers more than 6 million print titles and ships to over 100 countries. But, as The UK Booksellers Association and Publishers Association both express their objections, and while the UK government’s Office of Fair Trading reviews the acquisition (statement expected August 30), it seems worthwhile to take a look at Amazon’s strategic move and what it might mean for the global book publishing landscape.

About opposition to Amazon-Book Depository merger, via TheBookseller.com:

The Office of Fair Trading (OFT) is investigating the acquisition, which is likely to be the largest the book industry has seen since the government body probed Waterstone’s takeover of Ottakar’s in 2006. According to the OFT, Amazon and The Book Depository submitted themselves for investigation, a way of speeding up the process. The OFT has twice recently referred bookselling mergers to the Competition Commission—Waterstone’s acquisition of Ottakars, and Woolworths’ purchase of ­Bertrams—with the CC eventually clearing both.

The BA, which had a neutral stance on the former, but opposed the latter, said it would make a formal submission to the OFT opposing this proposed acquisition. The Publishers Association is also thought likely to oppose the deal and is asking for its members to submit representations to the OFT or to the PA, which will compile a joint submission.

Speculation about Amazon’s motives comes from blogger Nate Hoffelder:

I’ve been watching TBD for a while now, and it was clear at least 7 months ago that they were outcompeting Amazon. This purchase happened for much the same reason as Woot, Zappos, or any other time Amazon bought out the competition. Basically, Amazon bought The Book Depository because they did the job better in that one niche.

Of course, the other interesting detail here is that the folks at Amazon clearly don’t think paper is dead. Otherwise they wouldn’t have invested in The Book Depository.

Looking at both Amazon’s and The Book Depository’s motives, Ingrid Lunden over at PaidContent.org believes that Amazon is “trying beef up its long tail cred with some direct in-house expertise, rather than simply relying on its third-party reseller network,” while for The Book Depository,

… [The Book Depository] intends to continue operating as an independently. It’s not clear what impact that will have on pricing.

Nor is it apparent whether The Book Depository will continue forward with its current business model focused on the long tail of books. Or, as the company itself describes it, “‘less of more’ rather than ‘more of less’”, a deliberate snub of the bestseller-drive of more mainstream sites.

That’s just a taste of what you may have missed this week. To stay on top of the most interesting news, commentary and tweets related to publishing, keep in touch via our RSS feed, follow us on Twitter, join your publishing colleagues in our LinkedIn group, and connect with the broader DBW Network.

From the interview:

I think that it’s all about the content anyhow. Right now, you can see that there are online companies now that are getting into content because they’re worried about content. The fact that we still have things that people want to read, I think, is going to still be our major advantage.

And I think you can do both. My job as the CEO is not to throw the baby out with the bathwater.

So we still have 80 percent of our volume, 85 percent, whatever it is, is still print. And that’s turning on the lights and paying my salary and paying for our booth [at BEA]. So we can’t just devote all our attention to ebooks, and the way that some of the mainstream media is representing ebooks, it’s like it’s 100 percent of the business all of a sudden, and it isn’t. And it certainly, I think, will never be 100 percent of the business….

A joint production of Digital Book World and Astral Road Brand Media: http://www.astralroad.com/. Founded by Rich Fahle, Astral Road Media is a full-service digital media agency, providing content strategy, design, video production, and other creative forms of social outreach for authors and content creators of all types.

Borders: Where’s the Silver Lining?

As Borders staves off immediate liquidation of major store locations, the retail giant continues to bleed dry, even though its May numbers showed a slight improvement: a silver lining, perhaps? Publishers Weekly has all the numbers:

As talks progress about the sale of most of its assets, Borders Group reported that its net loss in the May 1 to May 28 period was $35.4 million, down substantially from the $132.2 million the chain lost in April. Revenue also dropped significantly as sales from the going-out-of-business sales fell to $15.5 million from $72.1 million in April. Sales from going forward stores dropped to $81.6 million in May from $101.0 million in April. The company’s loss from ongoing operations was also reduced in the period to $18.1 million from $32.1 million.

In the meantime, the courts have loosened the terms of the loan, granting Borders a brief reprieve to find buyers and avoid further store closings. From Bloomberg News:

Borders plans to file a proposal by July 1 to sell itself at a court-approved auction with a guaranteed buyer, known as a stalking horse, making an initial bid, Mary Davis, a company spokeswoman, said in an interview.

U.S. Bankruptcy Judge Martin Glenn, who is overseeing Borders’ bankruptcy in Manhattan, approved the changes today after a hearing in New York. Borders needed to extend deadlines in its $505 million bankruptcy loan that were set to expire this month to avoid being forced to immediately start liquidating 40 stores, most of them profitable, that the company wants to include in a sale, Davis said.

Who are the two most promising potential buyers for Borders to off-load locations? According to Dennis Johnson over at MobyLives:

[Alec] Gores, 58 years old, runs the Gores Group, a private equity firm with interest in the financial and entertainment fields, wants to spend $250 million for about 250 of Borders remaining 400 hundred stores, “the bulk of them so-called superstores, which he intends to revamp into more appealing destinations akin to Apple Inc.‘s outlets.” Yes, you heard that right: Gores believes he can turn poor old floundering Borders into a rival for the breathtakingly well run (and stupendously profitable) Apple stores.

[Jahm] Najafi, meanwhile, an owner of the Phoenix Suns basketball team, is better known to publishers because he owns the Book-of-the-Month Club, which he picked up when he also bought the Doubleday Book Club and Columbia House from Bertelsmann AG in 2008. His plan is to take over about 300 Borders stores. And what are his motivations? According to Spector and Trachtenberg [of WSJ.com], “Najafi could bolster his book clubs by tapping the more than 43 million Borders customers who are members of the chain’s rewards programs and put outposts in the chain’s stores.” Plus, “He believes Borders has a strong brand that retains an attractive base of customers Borders can build on by providing them with additional goods and services, much the way he increased revenue at Network Solutions by offering e-mail and e-commerce capabilities.”

No doubt the market disruptions caused by the Borders bankruptcy saga go from top to bottom. On a local level, Crain’s Detroit Business has an interesting close look at Agree Realty Corp.’s recent SEC filing about granting rent concessions to Borders for the 14 properties that the retailer rents from the Michigan-based company.

On a wider scale, the repercussions of Borders’ liquidation may have extended to competing retailers, such as B&N, which in the words of this quick piece at WSJ Blogs Marketplace, is being “singed by Borders’ fire sale.” Perhaps a less-than-diplomatic way to spin Barnes & Noble’s unanticipated sales losses in 4Q but check out the official statement here.

Are We Worried Enough About B&N Yet?

The less-than-stellar financial report from Barnes & Noble is troubling, but really it’s hard to tell where B&N is going to go, especially since in this latest report, the retailer declined to forecast on fiscal 2012 as the Board of Directors reviews last month’s takeover bid from Liberty Media.

At the same time, though, Barnes & Noble also announced that its ebooks outsell its print books 3 to 1, but the costs of its digital plan tempered the news.

From PC World:

The increasing e-book business did not save the company from a loss, however. For the fourth quarter, the company reported a consolidated net loss of $59 million on total sales of $1.37 billion, compared to a loss of $33 million on sales of $1.32 billion a year earlier.

The company is continuing to invest in the burgeoning digital business, Lynch said. The company expects e-book prices to fall as self-publishing applications gain a foothold, [CEO William] Lynch said.

This paradox inspired BNET blogger Erick Sherman to question the numbers and ask, “If Neither E-Books or Paper Can Save Barnes & Noble, What Can?”:

The company credits digital books and the Nook for its 65 percent year-over-year sales growth. However, all of the e-book sales happen online, and the online division’s revenue was only about a fifth of retail sales, even though digital books now outsell paper three to one. It raises the question of what business Barnes & Noble can actually be in. Sounds like it was more the Nook with minor assistance from digital books that pushed the numbers…

If it’s the Nook that is really driving growth, the company is in deep doo-doo. Human readers turned book purchases into B&N’s annuity.

But for hybrid retailers like Barnes & Noble, things are likely to get more complicated, as Google continues to extend into the publishing retail space by opening up the Google Ebooks Affiliate Program to bloggers and continues its digitization program with a massive acquisition of 250,000 public domain titles from the British Library.

Amazon’s Tablet Is Just Around the Corner?

Things might get even more interesting very soon; rumors coalesce that Amazon will release a tablet device by August – at least, that’s the scuttlebutt at CNET, ZDNet, and others, all sourcing the Taiwan-based gadget rumor-monger, DigiTimes.

Yet, as Laura Hazard Owen over at PaidContent.org reported earlier this month, the Kindle already accounts for over 15% of Amazon’s revenue and still holds 60% market share in ereader devices, even as Barnes & Noble’s Color Nook and Kobo’s eReader Touch were both launched at the end of May.

Recall, though, that Amazon CEO Jeff Bezos hasn’t exactly been denying that an Amazon tablet-style device could coexist with the Kindle, as reported in this conversation with Consumer Reports back in May:

Asked today about the possibility of Amazon launching a multipurpose tablet device, the company’s president and CEO Jeff Bezos said to “stay tuned” on the company’s plans. In an interview at Consumer Reports’ offices, Bezos also signaled that any such device, should it come, is more likely to supplement than to supplant the Kindle, which he calls Amazon’s “purpose-built e-reading device.”

Bezos acknowledged the popularity of reading e-books (many of them sold by Amazon) on tablet computers such as the iPad. But he added that this popularity doesn’t spell the demise of the Kindle.

“We will always be very mindful that we will want a dedicated reading device,” he said. “In terms of any other product introductions, I shouldn’t answer.”

I suppose we’ll know soon if the rumors are true.

Has Self-Pub Gone Too Far?

Talking about Amazon seems a perfect segue to discuss the latest self-publishing news, as independent author John Locke becomes the first independent author to join the Kindle Million Club (8th overall). Through Kindle Direct Publishing, Locke had penned nine novels, but his latest is a DIY marketing guide for self-published authors, How I Sold 1 Million eBooks in 5 Months.

But things aren’t all sunshine and roses over at Kindle Direct Publishing. The presence of copyright-violating self-published titles and the more disturbing trend toward outright “spam” ebook titles have become points of contention over at “Spamazon,” an issue that has gotten picked up by both tech sites like PCWorld and business bloggers like BNET.

Reuters points out how ebook spammers are using Private Label Rights, which allow junk ebook-makers to purchase and repackage prefabricated content and quickly turn around titles. It’s clear that the scant 48-hour Amazon approval process isn’t catching copyright violations, book “spinning,” or classic spam. I hate to bring this up, but “phishing” with hotlinks and other commonplace email spam tactics are probably just around the corner.

So what’s the solution?

One is for Amazon to take a stronger curatorial role and, in effect, become a publisher – a development already underway in various Amazon imprints and in the Kindle Singles store. At least one blogger has suggested that authors should be charged for using Kindle Direct Publishing; even a fee as low as $10 might be enough to deter the most egregious ebook “publishers.” Still another solution is for Amazon to filter out these titles from search results, but that also seems to require significantly more vetting than what Amazon is currently doing anyway.

Should Bookstores Charge for Author Events?

Since this roundup seems heavy on news about authors and retailers, it seems appropriate to highlight the latest controversy in independent retailers: brick-and-mortar bookstores charging admission fees for author events, a trend that came to the forefront when The Boulder Book Store in Colorado announced that it would charge $5 for in-store events. Reaction is, of course, divided.

From The New York Times:

Heather Gain, the marketing manager of the Harvard Book Store in Cambridge, Mass., said that in recent years the store had begun doing more events that required the customer to buy a book, constantly reminding them that “if they aren’t purchasing the books from the establishments that are running these events, the bookstores are going to go away.”

“We’re a business,” Ms. Gain said. “We’re not just an Amazon showroom.”

Facing the severe pinch, independent retailers such as Christin Evans of Booksmith in San Francisco are calling for a radical rethinking of the American Booksellers Association’s approach to technology and the IndieCommerce e-commerce platform. Writing a two-part piece for HuffPo (here and here), Evans writes:

The ABA as the organizing body for independent bookstores must change its culture to be more nimble, open, welcoming and experimental. This recommendation made the top of my “how to” because in the past several years, I have met at least 10 people (creative booksellers, prospective technology partners, and innovative publishers) who each have individually approached the ABA about partnership and hoped to receive access and welcoming open arms. Each had an eerily similar story to tell: that the ABA gatekeepers were unreceptive.

These conversations were missed opportunities. These potential partners represent the best hope for independent bookselling. In spite of a shrinking market, they are entrepreneurs who are passionate about our industry. They are looking for ways to connect & work with the independent bookstores they love and admire.

Instead of putting all eggs in one basket (indieCommerce), the ABA needs to plant many seeds in the form of many nascent projects with a little resource and a little funding and some clear goals and measurable outcomes. Then, see which ones flourish. And, be tolerant of failure but deliver rewards only to those projects that succeed and have real results.

That’s just a taste of what you may have missed this week. To stay on top of the most interesting news, commentary and tweets related to publishing, keep in touch via our RSS feed, follow us on Twitter, join your publishing colleagues in our LinkedIn group, and connect with the broader DBW Network.

Battleground Amazon

Three stories this week are directly playing out at Amazon, but in three rather different sectors of the publishing industry landscape:

Are Books in Bookstores a Subsidiary Right?
Responding to a Publisher’s Lunch report that Houghton Mifflin Harcourt had partnered with Amazon to act as (all but in name) “trade book distributor” for two of Amazon’s imprints, as well as revelations that Harcourt was part of Amazon’s bid for Amanda Hocking’s books, Mike Shatzkin over at The Idea Logical Company blogged:

From one standpoint, this makes a lot of sense. Amazon can sell the hell out of a book online, and they have long made print available through their CreateSpace program. But they can’t merchandise books in stores. Even paying extremely high print and ebook royalties, as they do, they can’t maximize an author’s revenues if they can’t deliver store sales of print in today’s world.

Are Ebooks the New Content Farms?
Publishing Trends has a 2-part discussion about the lack of copyright oversight in Amazon’s independently authored/published books and the suggestion, originally posed by Mike Essex of UK-based digital marketing agency Impact Media, that the new Google penalties on content farms would result in those writers turning to selling plagiarized ebooks.

From Publishing Trends’ article and interview with Essex:

Essex carried out an experiment for PT: “I took the lyrics to the song ‘This is the song that never ends’ and repeated them over 700-plus pages. No formatting, just one continuous block of duplicate text. Within 24 hours, it was live on the Amazon Kindle Store and I haven’t received a single message from Amazon about it. Surely an automated process would be able to easily tell I had repeated myself over and over, but this wasn’t flagged up.”

As a follow-up, Publishing Trends also has an enlightening summary of comments to their interview, as well as a description of the complaints process from one author.

What Is “Fair” Ebook Pricing?
Consumers are lashing out about ebook pricing by posting negative, 1-star reviews at Amazon.com, which does not require a purchase to leave a review, as reported at CNET. The article has inspired a lively discussion about ebook pricing and whether “gaming” the review system is an appropriate way for consumers to protest perceived unfairness in pricing.

Do Fixed-Price Systems Mean Lower Prices?

While we’re on the subject of pricing, Publishing Perspectives has a thoughtful piece about the ongoing debate in Europe about fixed-price systems for books, sparked by the Swiss Parliament’s recent decision to reinstate fixed pricing.

From the article:

In Germany, where fixed book price law is strong, book prices have actually fallen in comparison with other goods over the past decade. Swiss book prices, in contrast, have risen over the past four years. “Economic theories say that free markets produce lower prices, but interestingly in the case of books that’s not so,” commented Dani Landolf, director of The Swiss Publishers Association (SBVV).

While bestsellers get deep discounts, the majority of other books become more expensive to fund the price wars. Sabine Dörlemann, president of Swiss Independent Publishers (SWIPS), expressed frustration that books from small publishers with tight budgets were assigned higher prices, which reduces sales though the publisher sees none of that extra money.

More Publishers Moving to Transmedia?

This week, Random House and videogame producer THQ announced a partnership to create original IPs for transmedia franchising and collaboration. From the THQ press release:

The team expects the new IP to first appear as a collection of games and books, while they further develop a rich IP universe that will allow for ongoing shelf life through other media. Drawing on rich skills and expertise in transmedia production, the team aims to bring a new level of quality to mutually created properties, expanding IP creation in ways that will immerse fans more fully in the fiction regardless of media.

The move is a further evolution of Random House’s earlier interest in videogame partnerships, as seen in the book Homefront: The Voice of Freedom, a prequel to THQ’s first-person shooter game Homefront, and published earlier this year by Random House’s sci-fi and fantasy imprint, Del Rey.

A further sign of publishers moving into the transmedia space, Andrews McMeel is actively looking for a VP, Executive Producer in Transmedia, who “will work with the editorial team in developing AMP’s line of digital books. The company currently releases select titles simultaneously in print and digital formats and hopes to expand their multimedia offerings,” according to Publishers Weekly.

What’s the Big Deal about Harry Potter Ebooks?

Speaking of extended franchising, the Harry Potter exhibition opened this week at Discovery Times Square, but the real story is that the Harry Potter books might soon be released as ebooks, which would represent a major change in how the bestselling books are sold and distributed. How ebooks will add to the already massive sales numbers of the seven installments of Harry Potter books (reportedly 450 million copies sold) will be interesting to see develop, but also there is a fair amount of speculation in mass media over whether the Harry Potter ebooks will result in a jump in ereader sales.

Graeme McMillan, a tech blogger for Time magazine, sums up this sales issue:

The [Scotsman] newspaper quotes Liz Thomson, editor of publishing industry site BookBrunch, as suggesting that the rights may be worth £100m, going on to say that “Experts believe that move could revolutionize the world of electronic publishing, triggering rocket sales of e-book readers such as Kindle and the iPad.”

I hate to be a party pooper (as in ‘this might not actually be true’) but I’m not sure I agree with the idea that the digital versions of the books would be that big a deal; surely the time for that kind of impact has passed, given that the series finished four years ago.

Some agree with McMillan, making an analogy with when The Beatles catalog was released on iTunes: a boost in sales of the music, but not much else and certainly no revolution.

Meanwhile, Future Book blogger Phillip Jones has a completely different take on what the deal means, focusing on the move in terms of licensing and rights:

[Neil Blair, partner at the Christopher Little Agency] told me at the time: “We are talking with everyone. What we’ve got to try and do is come up with an arrangement that suits everybody, and which makes the e-books available to as many people as possible globally.”

The Christopher Little Agency does not need my advice, but reading between the lines, this looks like they should be looking at a wholesale arrangement with a global provider that can supply the books digitally to partners who can support the e-books on a local level. The partners would most likely be the current print publishers who have most to lose from any digital arrangements that don’t include them. Thus any deal is more likely to look like a licensing agreement than a straight “rights” sale.

Tweet of the Week

That’s just a taste of what you may have missed this week. To stay on top of the most interesting news, commentary and tweets related to publishing, keep in touch via our RSS feed, follow us on Twitter, join your publishing colleagues in our LinkedIn group, and connect with the broader DBW Network.

From the interview:

We find that fraud among readers is very light; our fraud rates are less than half a percent. The person that buys a book, that is in a demographic that we see in any event, is generally honest and isn’t going to try to steal, borrow, and move.

And, there are all sorts of stories about how giving way books actually helps stimulate more reading that people pay for.

And those that can’t pay for books, and don’t pay for books, and steal them because they can’t afford them? They’re not going to buy books anyway, so why not feed a reading habit for when they can afford to buy them?

A joint production of Digital Book World and Astral Road Brand Media: http://www.astralroad.com/

In a surprising turn of events Amazon.com recently launched an app store specifically for Android-driven devices, aptly named (what else) Amazon Appstore for Android!

What makes this so interesting is that Amazon does not currently sell an Android anything of their own, leading to speculation that the next Kindle, the popular and highly successful eReader, will be in color, more tablet in nature, and likely use a Honeycomb platform, similar to the upcoming product Sony plans to release this summer.

But who knows?

What we do know is that Amazon does sell just about every Android-powered smartphone and tablet computer available, including T-Mobile’s MyTouch and HTC’s EVO, as well as Samsung’s Galaxy Tab and Motorola’s Xoom. However none of these can run apps sold from Apple’s iTunes, and except for a few simple apps developed for Kindle, like Scrabble and Hangman, Amazon hasn’t really been in the business of mobile applications in any serious way.

Until now.

And that’s because Amazon, a trusted consumer brand like Apple, decided to shine a light on one of the best and most enticing reasons to purchase a smartphone or tablet from them instead of anyone else: APPS!

So why does this matter? Well, for starters, in the past Android users had to go to a variety of different sources to locate apps, which wasn’t very convenient from a consumer perspective. Plus, over and over users would read about how the “apps for Android” landscape was akin to the wild, wild, west (which is unsettling), and so you had an open source environment that wasn’t policed well enough to prevent one or two from causing serious technical problems. But no more, because with their new app store, Amazon will aggregate the best and most popular apps, such as Angry Birds and Shazam, and test them to make sure they’re safe to download. Sound familiar? It should since it’s the Apple model but for “non-Apple” devices. Android users rejoice!

It’s been reported that soon Barnes & Noble, the retailer that actually does sell eReaders powered by Android, will be launching an app store of their own. And it’s worth noting B&N has made a limited number of apps, such as Chess and Sudoku, available for their critically acclaimed Nook for quite some time, just like the Kindle. And owners of the Nook Color have been enjoying those same games plus Pandora Radio and Crossword Puzzles in glorious technicolor since November 2010. The major difference is that B&N isn’t in the third-party cell phone or tablet business, so it remains to be seen if apps for Nook will also run on other Android devices. Regardless, it’s gonna be a while before they can catch up to Amazon who just got the jump on ‘em.

With this in mind I’m sure Amazon can relate and is aggressively working to grow its selection of apps as quickly as possible to compete with the more than 350K currently found on iTunes. Add to this effort its new cloud initiatives for digital music, data storage, plus streaming of instant movies (etc.), and it becomes quite clear Amazon is determined to remain a major player in each of these spaces. Frankly, I’m exhausted just thinking about it.

So that leaves Google, the incredible company that introduced the world to Android in the first place, and who presently has a greater selection of apps than Amazon. But Google most likely has no interest in trying to compete with a formidable retailer with a long reputation for having great customer service and an online shopping experience that just can’t be beat. Then again… maybe they do! In the end it really doesn’t make any difference whether users get their Android apps from Amazon, B&N, or anyone else for that matter. Either way, Google wins! Plus Amazon’s entry into this space will only increase sales of Android devices, expanding their reach and appeal, and all with the stamp of approval by one of the world’s most favorite online retailers.

Having said all that, isn’t it only a matter of time before a flood of book-related apps start pouring in to take advantage of Amazon’s new channel of content distribution? From my vantage point this all makes for a very exciting time to be a publisher, author, developer, producer, or start-up with a dream and a story to tell.

Don’t you think?

Peter Costanzo is the Director of Digital Content for F+W Media. He also teaches the Introduction to Interactive Media course at NYU. Follow him on Twitter @PeterCostanzo.

Looking at how conglomerization has shrunk the pool of publishers, I then go back 50 years ago when Random House first went public and they declared an IPO. Then they merged with Knopf, and then eventually they were bought out by RCA. That was the first instance of an outside conglomerate buying into a publishing house. And RCA eventually did not stay put, but it sort of heralded this sea change of both media companies and foreign entities coming in and saying we want in on this publishing business.

Wall Street expects profits each quarter and ideally you want profits that keep going up and up and up. But publishing just doesn’t work that way. The margins are tight. Especially if you’re looking at a brick and mortar entity they’re even tighter. So as a result, to expect that profits will keep increasing when there’s so much to be done. Especially with acquiring content, acquiring books, editing them, it costs a lot of money to produce just one book. Now multiply that by thousands of them. So as a result, it’s not the greatest investment for Wall Street.

If we are indeed seeing the end of a chain bookstore model, that lasted roughly around 20 years, then maybe we will see more independent bookstores, but in order to do that they have to be really smart and understand exactly why they need to exist and how they need to exist and go forward.

A joint production of Digital Book World and Astral Road Brand Media: http://www.astralroad.com/

Borders Missteps Go Back 20 Years
John Mutter, Shelf Awareness

One of Borders’s early advantages–its computer system, the creation of Louis Borders in the company’s early years–became dated after the Borders brothers sold the company to Kmart. For many years, Borders and Walden continued to use separate computer systems. In addition, the Borders system has continued to use proprietary bar codes, which means that every book ever sold by Borders has had to have a special sticker printed out and applied to it, usually over the industry-standard bar code that is printed on all covers and jackets now. Stocking and restocking in the Borders system lagged behind its competition.

From our point of view, Borders’s last chance for a turnaround came during the period when George Jones, CEO from 2006 until early 2009, headed the company. He undertook a series of initiatives, including extensive store remodeling, taking back the company’s website from Amazon, creating (again) a publishing program, improving merchandising and buying processes. He also spun off most of the international operations, which were usually profitable, but which many considered a distraction. Unfortunately, the financial collapse in 2008 shook the company to the ground, bringing on the Ackman-LeBow era of the past two years, when a hedge fund manager and a corporate raider, both of whom represent the worst of American capitalism, took over and drove the company into the ground.

Borders decline means big changes for industry
Hillel Italie, AP

“They’ve always been great champions of the trade paperback format,” says Carrie Kania, who heads HarperCollins’ paperback imprint, Harper Perennial.

“Borders has, from their beginnings, been a consistent supporter of literary and first fiction,” says literary agent Ira Silverberg. “Their loss will absolutely be felt in lower projections for first print runs by publishers.”

The New Archie Comics
Calvin Reid, Publishers Weekly

One reason why Archie comics remain so popular with children is that they are among the few comics still available on the newsstand and at supermarket checkouts; indeed, the newsstand represents “the lion’s share” of comics sales for the company, according to Goldwater. In September, the company signed a distribution deal with Random House, which Goldwater says has spurred a renewed emphasis on graphic novels. The monthly comics are not going away, but Goldwater says he wants to increase the company’s graphic novel line by 50%–100%. “It is a very, very important part of our business here at Archie Comics, and we are focusing a lot of energy and resources behind promotion and creation of our graphic novels,” he says. Last week, the company announced its first original graphic novel, Archie Babies.

Digital Is The New Direct Market
Torsten Adair, The Beat

So stores order fewer copies of already marginal titles. Publishers notice this, as well as the number of digital copies sold (as well as subscriptions, which can be lucrative for children’s titles). So, like Marvel in 1981, they realize that printing paper copies is no longer profitable, and only distribute the issue as a digital file. Perhaps the publisher charges $2.99. Perhaps $1.99. Maybe these “Digital Direct” titles feature journeymen talent which work at lower rates. Or maybe the publisher sells a cheap version with ads, and a more expensive edition without. Maybe later they collect the digital copies into a trade paperback. (Quite possibly as a print-on-demand edition!)

Can Google Beat Apple With Its Publisher-Friendly “One Pass” Digital Subscriptions?
Kit Eaton, Fast Company

But the real thrust of the announcement is about how publisher-friendly One Pass is. Publishers can “customize how and when they charge for content while experimenting with different models to see what works best for them–offering subscriptions, metered access, ‘freemium’ content or even single articles for sale from their websites or mobile apps.” One Pass also lets “publishers give existing print subscribers free (or discounted) access to digital content” and Google takes care of “the rest, including payments technology handled via Google Checkout.”

Where in the publishing world are libraries?
Katie Dunneback, Consultant East Central Library Services, Bettendorf, IA

Margaret Atwood, “The Publishing Pie: An Author’s View”
TOC 2011

Tweet of the Week

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Topic: Publishing Without Borders

This penultimate episode of The Roundtable was webcast live on Thursday, February 10th @ 1pm ET / 10am PT.

• Register to participate LIVE
  • NOTE: Previous Roundtable registrants will have to re-register for the final two episodes.
• Subscribe to the audio podcast
• DBW Members can access the on-demand archive of The Roundtable

THE PANELISTS

• Laura Dawson, Content Chief, Firebrand Technologies
• Pablo Defendini, Interactive Producer, Open Road Integrated Media
• Matt Mullin, Community Relations/Marketing Manager, Digital Book World
• Kate Rados, Group Marketing Director, F+W Media
• Bridget Warren, Former Co-Owner, Vertigo Books

THE MODERATOR

• Guy LeCharles Gonzalez, Chief Executive Optimist, Digital Book World

LINKS

Bloomsbury Forms Worldwide Publishing Divisions
Jim Milliot, Publishers Weekly

“We want world rights where ever possible,” Charkin said, adding at a minimum Bloomsbury expects to acquire all English-language, German and Arabic rights. And, Charkin noted, Bloomsbury won’t do a deal that doesn’t include digital rights. He said the number of titles released in the U.S. annualy could rise as books acquired in other regions are released in the States. In addition to the global reach of Amazon, Apple and Google in digital distribution, agents and printers have also expanded internationally, Charkin said, making it imperative for publishers to keep up.

The Potential Costs of Borders’ Unpaid Bills
Publishers Lunch Deluxe

With Wiley’s $9 million writedown last Friday of money owed to them by Borders that they do not expect to collect, it’s clear that the bookseller’s troubles are going to hit balance sheets even before the possibility of hitting bankruptcy court. Most of the coverage since we first reported in late December that Borders was not paying major creditors has focused on the largest publishing companies, but with a second month of non-payment we wanted to look at how the impact of Borders current inability to pay their bills might be felt across a much wider group of publishers. Since most publishers are distributed by someone else, we focused on surveying how most of the major distributors would handle uncollected receivables from Borders.

What Do We Know About Publishing Bankruptcies?
Publishers Lunch Deluxe

The closest US publishing-related bankruptcy comp in recent memory is probably the late 2006 collapse by AMS (Advanced Marketing Services). When they filed, the company owed the 40 largest publisher creditors alone $220 million, including $43.3 million to Random House. (The debtor list did also include publishers they distributed via PGW.) AMS also held $70 million worth of books in their warehouse at the time they declared bankruptcy… Like Borders, AMS’s undoing had been years in the making. In Borders last SEC filing, they reported trade accounts payable of $445 million on October 30, and in general the six largest vendors accounted for half the merchandise sold by Borders. Unlike AMS, Borders holds much more inventory, even with the selldown from the past month or so. As of the end of October, they held $895.8 million in merchandise.

Powell’s Books Cuts 31 After Sales Fall
Shelf Awareness

The company said of the layoffs: “This undesirable course of action was taken only after serious consideration of other possible options and a careful evaluation of the future.” In the memo to the staff, Powell’s said that sales this fiscal year are down, with “the largest decreases” in new book sales, “a clear indication that we are losing sales to electronic books and reading devices.” The company expects new book sales to continue to erode “over the next year” and that it can compensate only in part “with solid used book sales and growth in gift sales.”

2010 Verso Study Revisited at Digital Book World
Bookselling This Week

“Across all four of our Verso surveys some common themes emerge,” McKeown told BTW.  “The e-book transition will be slower than the digital pundits predict and a hybrid print/digital market will persist for many years, especially among avid readers,” he said. “Independent booksellers have a significant mindshare advantage waiting to be converted to added marketshare.  The imminent closure of hundreds of Borders locations and the probable continuing consolidation at B&N fuels that opportunity.  But this can only become a reality if new sources of financial capital emerge to jumpstart that effort among the next generation of indie entrepreneurs.”

Leave the libraries alone. You don’t understand their value.
Philip Pullman

Publishers are run by money people now, not book people. The greedy ghost whispers into their ears: Why are you publishing that man? He doesn’t sell enough. Stop publishing him. Look at this list of last year’s books: over half of them weren’t bestsellers. This year you must only publish bestsellers. Why are you publishing this woman? She’ll only appeal to a small minority. Minorities are no good to us. We want to double the return we get on each book we publish. So decisions are made for the wrong reasons. The human joy and pleasure goes out of it; books are published not because they’re good books but because they’re just like the books that are in the bestseller lists now, because the only measure is profit.

Tweets (as RTd by @digibookworld)

RT @floerianthebard: #dbw Borders is the Black Knight from Monty Python. It just won’t die. — @pablod

RT @babetteross: I like this analogy of the long terminal illness as a metaphor for Borders via @ljndawson #dbw

RT @ebooknoir: #DBW so part of borders issues seems to have stemmed from it not being flexible and adapting to the market changes.

RT @pa4culture: With so many expected closures of Bordersacross the country, libraries will become the community reading space. #dbw

RT @pa4culture: Yes, publishing is now the wild west. The dark side… where no one bathes and everyone is drunk and carries a gun. #DBW

RT @jameshbyrd: Is the physical book superstore done? Yes. Borders = Tower Records. The rest will topple eventually as well. #dbw

RT @millerchick: #DBW Will the book ‘Expresso machine’ will be the “mall desitnation” replacing bookstores…(?)

RT @matthewdiener: #dbw Loss of Borders could push pubs to… Lightning Source for geo-based POD. Espresso could explode.

RT @eBookNoir: #dbw – we need to bring back the value of a book.. accomplish this by the quality of what is published

RT @pablod: Besides world English rights, pubs should pay attention to *US Spanish (or foreign language in general)* rights. #dbw

RT @jennybullough: Metadata, keywords, subject codes – even more crucial for discoverability in an online-search dominated marketplace. #DBW

RT @babetteross: It’s not necessarily new skill sets its about mindsets via @pablod #dbw  I agree 100%

RT @babetteross: Understanding consumer marketing is crucial in the change from being a b2b to a b2c industry @glecharles #dbw