An interview with Mike Shatzkin from TeleRead:
T: Where do you land on the topic of physical Amazon bookstores? Do you really think they’re gunning for 400 brick-and-mortar locations? What are the possible anti-trust ramification of that? And other things. You’ve heard a rumor that B&N may kill the Nook in the UK–could it next fade away in the U.S. And what would that mean, in possible antitrust terms?
MS: I am not an expert in anti-trust, but we’re featuring one named Jonathan Kanter at DBW so we’ll get answers to those questions. I think a rollout of Amazon stores—who knows what number—makes a lot of strategic and logistical sense for Amazon. B&N’s new Chief Digital Officer is speaking at DBW too. I expect he will talk about the future of the Nook. It must always have been hard for them to operate Nook outside the US. Their big competitive advantage was controlling their own stores. And they don’t control any outside the US.
T: One of the big topics at DBW is “transformation.” What are some of the companies that seem to evolving well with the changing marketplace, and what attributes do they share? Have the big publishing companies done enough to transform in this marketplace or is there greater room for them to change? In what areas?
MS: Ingram is the outstanding example of a company that has transformed. They are earning half their margin or more from businesses they didn’t have two decades ago. The other companies we’re featuring are large and small, new and old. They are Rodale, Sourcebooks, Quarto, John Wiley, Houghton Mifflin Harcourt, NetGalley, and Diversion Books. We define transformation as a dramatic change in business model or revenue sources. The Big Five have not really transformed. They are continuing with basically the same business model. Sourcebooks, for example, has built an entire new business of customized children’s books. I can’t think of any initiative from a Big Five house that is comparable transformative.
I still believe the big transformations to come are around “verticals”, topics of interest. There has been real movement on that front from big houses as marketing initiatives. But they haven’t built the verticals into new business models or free-standing profit centers. I think that might be something to look for in the next few years.
T: How keen are you at this point on publishers selling directly to consumers? Who’s doing it best, and what are they successful at it?
MS: I think it is ultimately a necessary capability, but not a transformative one. Publishers will never succeed selling most of their books directly. But the tools to do this are becoming so easy and ubiquitous that it is hard to see how all of them can continue to avoid it. Right now the big publishers are doing a lot to have direct contact with consumers without necessarily owning the transaction. I think all of the Big Five are doing something: vertical communities, email blasts promoting discounted ebooks, and increasingly coaching authors to be helpful marketing partners. But there’s a lot of room for “more” on all these fronts from all the big houses.
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T: How do you feel about the future of public libraries? Will there be a place for them 20 year from now, and if so, what will it be?
MS: I really have a hard time understanding how public libraries make commercial sense in a mostly ebook world. If you can go to one website and get the ebook for free and at another you have to pay for it or for access to it, why wouldn’t you always choose “free”? Free public print libraries always had “friction”: you had to go get the book and you had to go take it back. AND ownership had a benefit: a physical object you could lend, write in, or use to decorate your shelves. All of this goes away with ebooks. You can see publishers struggling with this now with high library prices and loan cap rules, for example. As the infrastructure gets built out, I see the conflict becoming more and more difficult to manage.
Link to the rest at TeleRead