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Barnes & Noble is Dead, And Len Riggio Killed it

20 September 2017

From The Digital Reader:

If you waterboard a Book People you might be able to get them to discuss what might happen _if_ Barnes & Noble goes bankrupt: it will be bad for old guard publishers.

What you won’t hear them say is that the current trend toward digital is going to make B&N obsolete as a bookseller (instead, they’ll assume  static system), or that the current mismanagement renders any discussion of B&N’s future moot.

The Book People at Publishers Weekly, for example, continue to ignore the writing on the wall, instead reporting:

During its annual meeting held Tuesday morning at its flagship store in New York City, Barnes & Noble chairman Len Riggio supported its new CEO, Demos Parneros who was named to his current role in April.

During the meeting, Riggio called Parneros “the perfect fit” to help the company grow its top line and improve profits. Observing that Parneros “has brought lots of energy to the company,” Riggio said he is looking forward to watching the executive over the next few years, noting that Parneros shares his vision and will revive B&N “store by store.”

The thing about Parneros is that in his first quarter at the head of B&N, revenues fell by 6.6%. That is not entirely his fault, but his plans for turning around Barnes & Noble amounted to six paragraphs of buzzword bingo. This does not inspire confidence in the man, and that should make you wonder why Riggio is so certain about Parneros ability to help B&N rise from the ashes.

Link to the rest at The Digital Reader

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179 Comments to “Barnes & Noble is Dead, And Len Riggio Killed it”

  1. “Alex, I’ll take “synergy” for 600″

  2. “… Riggio is so certain about Parneros ability to help B&N …”

    “… Riggio called Parneros “the perfect fit” to help the company …”

    Could it be Riggio would rather watch it all crash and burn rather than limp along as a new/different thing?

  3. I’m in no hurry to close my position in BKS puts, strike price 10, expiring in January 2018.

  4. A world without BN would be disastrous for writers and publishers. Unfortunately BN like all retailers is suffering because of competition from Amazon and they have to figure out another way to compete. But a world without retailers is going to cause a burden on our towns and cities when there is less local taxes being collected and less people being employed.

    • It would help if they didn’t act like you were disturbing them by going into their store.

      And they are already a disaster for those that can’t get their books in B&N anyway, so not all that many actual writers will be affected and number-wise just a ‘few’ publishers.

      B&N grew to the point it blocked the light that had been shining on other bookstores. It should be interesting to see what if anything will grow up in the shadow B&N will shortly no longer be casting.

      • All publishers would be affected and so would most of the writing community. BN is a great outlet and one of the few places remaining for author signings, whether you’re a debut author or an established author.

        • There’s not a B&N in my city anyway, so we’re already not getting any taxes or employment out of them. OTOH, Amazon’s about to open a shipping center here. So, if that’s your argument…

          And I’m all for book signings, but they’re places to connect with existing fans, not very good discovery tools for new writers. So those most affected negatively in that regard are likely to be people with enough fans that they don’t really need to worry that no one will buy their books. And as people have already pointed out elsewhere, book signings can be done at indie stores, libraries, or other places if B&N isn’t around.

          • Signings can absolutely be done at libraries. But it’s nice to have a place that can sell the books as well. B&N might not be important to you or to a digital only author but it’s imperative for a print author, even a brand new one. Not everyone wants to read an ebook. Some people buy ebooks as well as print books; I fall into that category. Everyone supports indie stores. They are a great way to get a buzz going on a book and they certainly do signings as well. But believe me, the loss of Borders was bad and the loss of B&N would be even worse. I hope fans of books would certainly be rooting for the survival of the largest book chain.

            • “Signings can absolutely be done at libraries. But it’s nice to have a place that can sell the books as well.”

              For sure. I made that exact point recently on another post here while defending book signings. But there’s a big difference between something that’s convenient and something that justifies a major corporation’s existence, especially when they’re not the only place that can do that thing (again, indie bookstores).

              “B&N might not be important to you or to a digital only author but it’s imperative for a print author, even a brand new one.”

              Please explain how, because just saying so isn’t really proof. I don’t have any novels out yet, but when I do, since I’m choosing to go indie, I can pretty much guarantee they will not be sold at any B&N. Which makes B&N not even relevant to me, much less “imperative”. And yes, I fully intend to do print as well as digital. I totally agree that paper books are great and are still preferred by a lot of people. I intend to fully embrace them as much as possible. But you seem to be conflating “traditionally published author” with “print author”, which makes your argument fall apart.

              “I hope fans of books would certainly be rooting for the survival of the largest book chain.”

              I don’t see people (here, and in other indie writer communities) rooting for B&N to fail. I see people observing that B&N is failing due to their poor business decisions and reflecting that, despite what doom-sayers claim, B&N choosing to drive itself out of business will probably not have a significant negative effect on either indie writers or on book reading as a whole.

              And yeah, there’s some snark about B&N too, much of which can be attributed to the fact that B&N mostly chooses not to sell indie books, so why should indie authors worry about whether they stay in business or not? Book stores are retail, for-profit businesses. They’re not charities, and any given book store is not the only place to buy books. Indie authors are perhaps more aware of this than tradpub authors because we do have to find other places to sell our books, since B&N (and a lot of other physical bookstores) flat out refuse to carry our books. When someone treats you like you and your product are dirt beneath their feet, you can’t be reasonably expected to shed too many tears when they mismanage themselves out of business.

              • Shawna,

                You can be a debut author that a publisher is doing in print. At Kensington, we publish new authors all the time. We also have a line, Lyrical Press, that is digital first. But without having B&N to carry the books from these new authors in print, the print order wouldn’t be large enough to even consider putting them into print. Amazon doesn’t sell mass market books in any significant number. This is especially true with romance and mysteries, two of the genres heavily in the self published area.

                An indie book won’t be sold at a traditional bookstore, except for maybe your local bookstore because the stores have been hurt by Amazon’s practice of selling books at a far lower price than any retailer could do. So they don’t want to support Amazon published authors or Kindle authors because it’s destroyed their business in their eyes.

                Doing books in POD is a very small business even for the big names. The books are generally sold as non returnable and a store can’t take the chance on ordering them. It also costs about $5.00 to print and ship the book, so it’s very expensive.

                Contrary to what you’re saying, I see a lot of people in this forum who wouldn’t mind seeing B&N go down or any traditional publisher for that matter. Many of the people are bitter because they’ve never been picked up by a traditional publisher. But as I mentioned in a previous comment here; even the biggest self publishing names, Konrath, Sullivan and Force have seen the wisdom of being in print and have mad deals with publishers like us to handle their print editions. There absolutely can be partnerships that work.

                • But as I mentioned in a previous comment here; even the biggest self publishing names, Konrath, Sullivan and Force have seen the wisdom of being in print and have mad deals with publishers like us to handle their print editions. There absolutely can be partnerships that work.

                  Every single publisher in the genres in which I work refuses as a matter of corporate policy to do print-only deals. Unless you are a million-selling author and the print portion of your business is enough to make the executive suite say ‘to hell with policy’, working with one of those houses means signing over full control of your copyright for the entire term. And those houses are not looking to expand their lists. Rather, they are shedding their existing writers as fast as they can, as Kristine Kathryn Rusch reports:

                  What I didn’t foresee, and should have, was that traditional publishers would cut so many major bestsellers from their lists. Writers who made lots of money for the company had sales declines, just like everyone else.

                  Rather than negotiate a new contract, their publishers (particularly Penguin Random House) would stall and no longer answer queries about a new deal. Often these writers got new editors (several) along the way, and the new editors wouldn’t return phone calls to writers or their agents.

                  It was rejection by silence, the most nasty product of the new marketplace. Some editors would have the guts to tell their writers that any deal wouldn’t be to their liking. And some editors, off the record, would say that no deal was forthcoming.

                  Not until the writer or the agent pressed did the writer find out that their bestselling career had come to an end.

                  Now, most of these writers were not major bestsellers. These writers were making consistent six-figure incomes every year, not seven-figure incomes. Their books were selling well, until the entire industry upended itself, and rather than invest in a known product, their publishers threw these writers under the bus.

                  The moment I had predicted had arrived in late 2015, and got worse through the next year, and into 2017. Only I hadn’t expected it to be so brutal. Writers with solid careers were simply cut from publishers’ lists with no thanks, no by-your-leave, and no respect at all.

                  Read the whole thing.

                • I don’t think people here are bitter, but relieved by self publishing.
                  That’s certainly how I felt, I finally have control over my own work and can choose to do with it what ever I like, it doesn’t hurt that I’m also making a tidy profit from my writing, money which wouldn’t be there for me if I had to split it between publisher agent and all the others.

                • Print on demand is obviously the future of print books. Big publishers are already phasing out mass market sizes, so arguing that POD won’t work because people want cheaper mass market books is becoming a poor excuse. One that you can’t use once most big publishers no longer produce that size anyway, and $15 becomes the normal, expected price for a trade paperback as the cheapest form of print book. ($15 is already a reasonable price for most POD books, aside from very short ones which can usually go for less.)

                  As for the indie bookstores not carrying indie authors because of Amazon… That’s certainly the excuse they use, and it’s partly why I intend to do my print books through Ingram (aside from the ones sold directly from Amazon). But while that may mean that some indie bookstores will carry my books, I doubt it’ll be many. Just go into any bookstore, indie or otherwise, and say, “I’ve got a self-published book that I’m wondering if you’re interested in carrying,” and watch them cringe. That prejudice is not just because of Amazon. With indie stores, at least you could potentially show them your book, let them see how professional it is, and maybe they will decide to carry it. With B&N, since they pretty much make all their deals with publishers, you don’t even have the option of hand-selling an indie book to their store’s buyers.

                  As for Sullivan, see the link that I posted to your comment below. He’s “seen the wisdom” of not continuing to make contracts with big publishers for print. (Namely because, as Tom says above, they no longer wanted to offer him a print-only deal and were unwilling to bend on their demands.) Will he do them all POD or make a deal with a smaller publisher in the future? I don’t know; I don’t track him closely. But as it is, he doesn’t seem to be someone you want to keep using as an example.

                  You seem to think that indies don’t make deals with publishers because either we’re not good enough to or we hate print. An awful lot of us choose not to go that route because we’re not happy with the terms and royalties that we’ve heard most publishers are offering. If smaller publishers (not the big 5) can compete in that way, offering more reasonable terms while also offering more professional editing/covers than we’re able to get on our own (and from what I’ve seen from a lot of small publishers, that’s a huge if), more indie authors might be willing to partner with them in the future, and maybe we’ll start caring more about print booksellers.

                • Steven – See my reply to your comment below about Sullivan. I didn’t see your response before posting my above comment.

    • But a world without retailers is going to cause a burden on our towns and cities when there is less local taxes being collected and less people being employed.

      There was a time when people said the same thing about firemen on locomotives. How ever shall people feed their families if diesel engines don’t have people on board to shovel coal?

      • How can you seriously make that comparison? If you don’t have businesses paying local communities any tax income, the towns can’t provide any services to the people. Less people employed means people move to where they can get jobs.

        • One B&N here in this metro area (~1 million).

          Employees? They will be less of a net drain on the tax base by finding new jobs – at Walmart.

          The local used bookstore King has four stores, all bigger than B&N – and he’s reportedly looking to open a fifth one. He’s not affected by Amazon, apparently. Two of them have “mom & pop” new bookstores right next to them, who truly appreciate the additional traffic they get from next door (as do the boutique bakery and several other stores in those strips).

          Sales taxes – the B&N contribution to that is undoubtedly hardly a rounding error, compared to the taxes that Amazon collects and pays.

          Somehow, I don’t think the demise of B&N is going to have any local effect. Other brick and mortar employers (and competitors with B&N, such as Walmart, Home Depot, Lowes, etc.) are managing to survive the “Amazon” era – and, according to reports, are learning to compete, not sitting and whining about how unfair the world is.

          • Those big retailers are all suffering because of Amazon. Let’s start with Sears that is closing stores and now Toys R Us is in bankruptcy. There are more and more every day that are closing stores. Every clothing retailer has cited problems in competing against amazon. Competition is great but it should be done fairly and they shouldn’t be able to sell products at or below cost to wipe someone out of business and take marketshare.

            One B&N store won’t make a difference going out of business but take the whole chain and it would be a disaster. I live on Long Island in a big town. We had three Borders and one B&N. Now there is only one local indie, which is a great one; within 15 miles of our home. That is not a positive action. The indies don’t come in as fast as you might think. Bookselling is a tough low margin business.

            Home Depot and Lowes are selling large products also, that would be difficult to ship and are generally more convenient to pick up locally, like lumber. But WalMart has been hit and every major department store.

            • Won’t someone think of the buggy whip makers? For the love of humanity!

              I see you still have the ADS going strong. It’s kind of reassuring to see that some things never change.

              • Sheila you can call it what you want and think I’m just picking on Amazon. But you’re not talking about just a product like ebooks. You’re talking about them changing all of retailing and destroying local business. I’m sure if you were a local small business owner you would feel different. Why don’t you try talking to the small business owners or even big retailers where you live and see how their business is? It’s only in the news every day about how retail store business is crashing.

                Meanwhile amazon is one of our most important customers, I’m a big personal user of them and I’m an investor also. But that doesn’t mean I’m blind to the effect they are having on mall stores in my neighborhood.

        • I make that comparison because for over a hundred years, people like you have been wailing about jobs being killed by technology, whilst remaining blissfully ignorant of the new jobs that arise because of that same technology – with a net gain of value to society. Retail jobs are disappearing because they are no longer needed. Do you want the ATMs abolished so the banks will have to hire more tellers? Do you want tractors and combines abolished so the farms will have to hire more hands? At one time, an actual majority of the American work force were farmers or farm workers. According to your lights, the majority of the work force should be unemployed (and every rural county bankrupt) because those jobs no longer exist.

          Well, guess what: People move on. People find other jobs to do. Most of the jobs I have had in my life did not exist when I was born: technology created them. Most of the jobs I have had don’t exist anymore: technology made them obsolete. I don’t cry about it, I move on. You might give people credit for being able to do that, instead of wailing about the impending disappearance of some of the worst and lowest-paying jobs in the economy today.

        • I make that comparison because for over a hundred years, people like you have been wailing about jobs being killed by technology, whilst remaining blissfully ignorant of the new jobs that arise because of that same technology – with a net gain of value to society. Retail jobs are disappearing because they are no longer needed. Do you want the ATMs abolished so the banks will have to hire more tellers? Do you want tractors and combines abolished so the farms will have to hire more hands? At one time, an actual majority of the American work force were farmers or farm workers. According to your lights, the majority of the work force should be unemployed (and every rural county bankrupt) because those jobs no longer exist.

          Well, guess what: People move on. People find other jobs to do. Most of the jobs I have had in my life did not exist when I was born: technology created them. Most of the jobs I have had don’t exist anymore: technology made them obsolete. I don’t cry about it, I move on. You might give people credit for being able to do that, instead of wailing about the impending disappearance of some of the worst and lowest-paying jobs in the economy today.

          • I am not talking about jobs being gone because of technology. I’m talking about companies going out of business because a giant firm is selling product at or below cost in many cases to put them out of business. That’s a distinct difference. If you were a competing retailer and you couldn’t afford to sell your book at the price Amazon was charging, I think you would understand this. They purposely made prices so low that no one could compete in many areas. I’m fine with technology changing. ebooks are great. I use them all the time.

            • But it is about technology. Amazon uses technology to deliver products to consumers more efficiently and at lower cost than retail stores. They’re not selling below cost, except for the time-honoured retail practice of drawing customers in with loss-leaders. Retailers are being disintermediated, and it isn’t because Evil Jeff Bezos is somehow making billions by losing money on every product he sells.

              If you were a supplier to retailers and you couldn’t get them to so much as sniff at your products on the terms that Amazon cheerfully offers, I think you would understand this.

              • It is not just about technology. They are deliberately selling certain items at or below the cost they buy them at to wipe out competition. It’s clear and simple. It’s not a loss leader, they do it on many many books. Especially when it comes to hardcovers and tradepaper titles. They’re willing to lose money on them because they make it up in AWS.

                I do supply retailers and Amazon and I know the terms. And I can see what price Amazon is selling the books for and know their cost.

                • I do supply retailers and Amazon and I know the terms.

                  Here are the terms that you are obviously not aware of. I quote Deb Kinnard from further on in these comments:

                  My books through my publisher are in print and e-versions both, and never once have I seen any of my titles in a B&N store. They will not work with small presses and after all these years, I know better than to go into my local B&N, smiling, and ask.

                  You’re not a small press. You wouldn’t dirty your hands by taking on our business. Stop pretending that you know better than we do how to handle it.

                • I don’t personally know Deb Kinnard and I’m not familiar with her publisher. Independent press is a broad encompassing term. Kensington is as independent as it gets. We are family owned, three generations, in our 44th year of business. Yes we are a good sized company but we are still an indie publisher. We have about 80 employees. There are other companies like us as well; for example SourceBooks.

                  I think it was you who mentioned Open Road in a comment previously which I didn’t reply to. ORIM was set up by Jane Friedman to acquire backlist titles from significant authors. They weren’t set up to be a front list debut author platform. I don’t know why you think they will fare any better or worse than any other publisher in the future. They only do ebooks and POD.

          • Shawna, POD is not the future of publishing. The costs are way way too high. If it costs you almost 5.00 to print a full length book and it retails for 15.00, that means the account is buying it for 7.50. That’s 2.50 to cover all your costs for bringing a book to market, which includes an advance to authors, overhead, etc…. it simply doesn’t work. POD is great for keeping books in the backlist in print or for relatively short print runs.

            See my comments about Michael J. Sullivan. Your article is outdated. We made a non-traditional deal with him.

            B&N will carry your book if they think it will sell. I know they carried Marie Force’s books in POD in some of their stores in her locale

            • Shawna, POD is not the future of publishing. The costs are way way too high.

              And of course the costs are never going to come down, because everything has already been invented, amirite?

              I’ve spent most of my lifetime, for various reasons, working either in industries that were about to be disrupted, or in the businesses that disrupted them. In every single case, the people about to be disrupted talked exactly as you are talking now. The new technology won’t work. It’s too expensive. It’s not good enough. Then one day – boom! The new technology developed to the point where there was no longer any reason for anybody to go on using the old.

              I don’t know for certain that POD will reach that point. Maybe some other disruptive technology will overtake it and disrupt it and traditional printing together. But I do know that long-run offset printing for the book trade is being disrupted rapidly, and there is no end to the process in sight, except for its eventual disappearance.

              • I am very familiar with the costs of POD Shawna. In fact, one of our books we published, The Hanged Man, was the very first book that Lightning ever printed by POD. I was there with the late Bronson Ingram, the founder of Ingram who owned Lightning. The costs have come down and the quality has gone up. But although it is great for keeping backlist in print in small quantities it cannot compete with traditional printing costs. $4.50 versus about a buck for tradepaper titles of full length. But it definitely has its place in the publishing world and helps writers and publishers do short runs quickly.

                • Do you account for all those trade books that are printed, at that love cost of about a buck, that are not sold and end up pulped? Because the cost of paper and other goods was spent, whether it sold or not. The company comes out ahead because they can claim losses for tax purposes.

                  I think you’re making so little sense with your promotion of how trad pub works and how great it is except big bad Amazon is ruining it all, you should probably just stop now.

                • Sheila you’re one of those people it seems who is just bent on supporting kindle and not realizing the importance of the print market because you’re not in it.

                  Your knowledge about how a tax write off works is incorrect. I assume you’re not an accountant. And what’s the difference if the company gets a tax write off or not? They still donated $1,000,000 of product to help people out. Do you not realize the tax advantages that amazon employs? Every company does and that wasn’t my point about the donation. It was a very generous move on their part.

                • The company comes out ahead because they can claim losses for tax purposes.

                  We hear this often.

                  If a company loses $100, and pays a 35% tax rate, then $35 in tax on other income is not paid. The company still has a $65 loss.

                  If companies came out ahead from losing money, then they would lose as much as they could.

                  This is easy for an independent author to test at home. Write a book. Sell it on Amazon for $2.99. Make $1,000.

                  Now write another book. Pay $100 for cover, pay $100 for editing. Put in on Amazon for free. Now take a $200 loss for tax purposes. Come out ahead? OK. Write another book and do it again. And again.

            • POD is totally reasonable for an indie author. I definitely didn’t mean that it was reasonable for a publisher (even a small one) for the reasons you give. (And Tom makes a good point that the cost may come down as new technology develops, though I don’t think we can always count on that as a certainty.)

              As an indie, if I’m already paying for a cover (for the e-book), making up a print cover is a negligible increase in cost. Ditto for any editing. Formatting isn’t hard to do myself. So really, for an indie author, making a POD version available is a pretty small expense (when I’m already doing an e-book version), and as more and more readers buy paper books online, it shouldn’t take too long for POD versions of books to make up even that small expense. This is, as you say, though, not a practical option for publishing companies (that is, non-single-author publishing businesses).

              I suppose I would say that I can see a potential future where POD and e-books become the only/primary way that people buy books. (Also audiobooks, which are becoming more and more popular.) If the big publishers and the big bookstore chains continue doing things the way they’re doing them. I would *rather* the future be a combination of e-book, POD, and smaller, more diverse publishers selling online and through a network of independent book stores. Unless B&N starts doing some major changes in the way they do business (which all indications are that they’re not going to, at least not in the right direction), I don’t see them having much part of the future of publishing. And that’s not anyone’s fault but their own.

              And since you’ve made so many points about Amazon on this thread, I’ll say that I’m not nearly the Amazon fangirl that some people here are, although I certainly use them. I think Amazon is useful and beneficial, both as a consumer and as an indie author, but I definitely do not want to see them get a monopoly–even a near-monopoly–on e-books or on anything else. That’s just not good for anyone (except Amazon). So I am *all about* publishing wide and providing as much competition to Amazon as possible. But I’m not in favor of taxpayer-funded bailouts of big publishers or B&N or anything like that. Amazon needs competition, yes. I wish B&N or anyone else would do what’s needed to seriously provide it. I would *love* to see a serious competitor for Audible gain traction. The more competition Amazon has, the better it is for consumers, authors, and publishers. The rest of the publishing industry needs to step up its game. Consumers will always go for the most convenience and lowest price, unless there’s some other advantage to paying more or going through more hassle. The publishing industry needs to accept that fact and deal with it, not just hope that by complaining about Amazon, people will choose to change their buying habits.

              • I agree with you. There are other companies than can and may want to be in the print business and/or eBook business. Never rule out Facebook who can tailor an add for a book specifically to what you’re interests are. There are other companies that want to buy B&N perhaps. There is also Books a Million, another significant chain owned by the Anderson family which used to be the largest player in the book market. Don’t forget Walmart and Target are huge book retailers as well.

                POD has come down in cost but it’s sort of plateaued for a long time now. I’d like to see it to continue to drop of course. We use POD every day of the week. We use it to keep small quantities in inventory as well as to provide author copies of digital only books for autographing and book conferences. All of our Lyrical Press digital first books are out in POD as well to make them available in print and for the author’s use.

                Don’t forget even when self publishing you should acquire print rights if you’re using stock photos for POD. The stock photo houses want every dime they can get even if it’s a few copies in print. Thankfully it’s cheap.

                I don’t see print books going away because of POD, especially hardcover which is needed to cover advances of high priced bestselling authors and for libraries. POD is ridiculous for hardcovers. Also there’s only one printer that does POD in mass market sizes but it has to be larger than single copies.

                I also wish there was more audio competition but there still are a few. The subscription models make it very hard to compete against amazon.

                I just realized that there was another comment made and it may have been in another post on PV about Scribd and Oyster. We supported both from the very beginning and were willing to try out new models. Oyster couldn’t cut it and scribd’s model has changed. But it’s not a long term viable business model for publishers because of the way royalties are structured.

                • Yeah, I really wish there were more POD options for hardcover. Lulu does them, and I’ve gotten some as single copies for personal things, but as you say, they’re very expensive. I mean, personal use things aren’t too bad, but awful if you expect to make a profit at all. They even have a mass market sized trim, and I tried it once, but it was still bound as tightly as a trade paperback, so I had to break the spine all to heck just to read it once. So… I see that printer as more for personal use than a solid commercial option.

                  What I’d love to see is a site that did one-stop shopping for e-books and audiobooks (letting you buy one and get the other for a reduced cost, like you can with most Audible and whispersync books), with an easy, dedicated app like Audible has. One of the keys that other companies don’t seem to be able to manage is friendly user interface. If a company would focus on that, in addition to having a good-sized library available, they might have a fighting chance.

                  I put my stuff in Scribd, since it’s just a click on D2D and why not, but I don’t put them on the other subscription services. They’re a nice idea, but yeah, their payment system doesn’t seem too favorable to me. Plus, while some authors write quick popcorn reads that do better with the “read books so quickly that I need unlimited books for $10/month” crowd, that’s not really the audience I’m targeting with my books. I think there’s a place for subscription services in the market, but I don’t think anyone’s really nailed it yet.

              • I suppose I would say that I can see a potential future where POD and e-books become the only/primary way that people buy books.

                For fifty years, our best technology companies have been trying to make a copy machine that doesn’t stop, jam, and flash for the operator. I have little hope that POD at a retail level will do much better.

                POD does work very well at multi-million dollar plants. The book may be produced at a big POD plant, then sent to the consumer. It’s just a change in printing plants.

                • That’s because the paper is fed from rolls rather than sheets; thus eliminating the jamming problem.

      • I don’t know what you expect me to say regarding the article you posted. We are not a big 5 publisher and we are more flexible than the big 5. We would be a big 6 publisher in mass market though. I don’t have to do things the way other companies would and I’m willing to try new types of deals, including hybrid publishing if I think the chances of making money are worth the risk.

        • Slight diversion, but when you say mass market, do you mean the usual mass market size, or that weird tall size that publishers have taken to selling instead of standard mass markets, which seems mostly so that they can justify selling them for $10 instead of $7 or $8? (It’s not the trade paperback size. It’s the size that’s as wide as a mass market but taller and often thicker.)

          • Mass market would encompass both of those. We call the books that are slightly taller, premium format. They are 9.99 and are generally thriller writers and a couple of romance/suspense authors.

            That’s different than the normal trade size of 5.5 x 8.25 or 6 x 9 or slight variations of those. POD in mass market is difficult became you have to use less expensive paper and most digital pod machines can’t support that.

            • Haha, I hate the tall mass market size. I hate them so much. They’re ugly, they don’t fit on shelves made for mass markets, and they feel awkward in my hands. The fact that they call them the same thing as mass markets (which I like fine) just makes it worse because you can’t differentiate before you buy. If I ever made a print-only deal with a publisher, I think I’d have to stipulate that it could be anything *but* that size.

              I do like that they (often) appear to be made with better materials. I might even allow for the $9.99 price point for that reason. I just wish the trim size was the same as normal mass markets.

              My favorite trim size is trade paperback, though, especially the 5.25 x 8 or thereabouts. But I’d imagine much of the size preference comes down to how big your hands are, which of course varies widely.

    • It’s time to accept that there is no way for B&N to compete as a bookstore with anywhere near the current shelf space. There will always be bookstores, but far fewer.

      And I suppose the loss of B&N tax and jobs will be about the same as the loss of Borders. It didn’t matter.

      • The problem is you’re not just talking about B&N. You’re talking about all sorts of retailers that are struggling to compete with Amazon. The book business is a sliver of Amazon’s business. Other areas are far more substantial and they’re hurting bigger retailers as well. So if it were only B&N, yes the tax and jobs wouldn’t be much in one town. But if you start looking at the number of really large retailers that are struggling, the local impact would be much greater.

        • The problem is you’re not just talking about B&N.

          Sure. I was addressing B&N, not all retail.

          But, if we do take a larger look, there will certainly be more closings and companies going out of business. That means people will lose jobs and taxes revenues from those establishments will be gone. I don’t think there is much room to argue against that.

          That’s what happens when markets change. That’s what happened when farms were mechanized. All those unemployed farmers fueled incredible industrial growth. Nobody really knew it at the time.

          But the loss of retail outlets will not leave an unmet demand. The outlets will adjust to meet the demand. OK. There will be fewer.

          We saw the same thing as Sears displaced thousands of workers in small, less efficient shops. Then Walmart came along with a more efficient operation that Sears. Now, Amazon has a more efficient operation than Walmart.

          People have been adjusting for many years. No reason to think they will stop. Nor is there much reason to be concerned because we don’t know what comes next. Nobody ever has known. Nobody is that smart. People prove that by thinking they are that smart.

          Think Amazon is bullet-proof? No way. Someone will come along and displace them, just like all the others.

          God Bless free enterprise, for it just keeps chugging along. It doesn’t care if we don’t know where it’s going.

    • A world without BN would be disastrous for writers and publishers. Unfortunately BN like all retailers is suffering because of competition from Amazon and they have to figure out another way to compete. But a world without retailers is going to cause a burden on our towns and cities when there is less local taxes being collected and less people being employed.

      I think you’re full of shyte. I pity you that you don’t see it.

      A world without BN would be disastrous for writers and publishers.

      It may be disastrous for some publishers and for some writers, but it won’t make a spit of difference to me. Or Richard Fox. Or Libby Hawker. Or John Ellsworth. Or Joe Konrath. Or thousands of other indie writers. And I’m betting that Baen’s Books will survive without B&N. And Open Road.

      Unfortunately BN like all retailers is suffering because of competition from Amazon and they have to figure out another way to compete.

      This is so frelling stupid it hurts. If a business cannot survive competition, it should fail. B&N is in trouble because it has not adapted to a changing environment. Blaming Amazon is NOT a business strategy. Would you like a little cheese with your whine?

      But a world without retailers is going to cause a burden on our towns and cities when there is less local taxes being collected and less people being employed.

      Really?

      Amazon opened a ‘fulfillment center’ (aka warehouse) just outside Saginaw, TX. That one operation employs more people than all the bookstores in the Metroplex ever did. I’m talking 5.9 million inhabitants in the Metroplex. And Amazon PAYS better than any bookstore ever did. And you’re trying to sell the notion that the cities will see less tax revenue than before? Sell it on Madison Avenue. We ain’t buying it in Texas.

      And it is ‘fewer people’, not ‘less people’.

      So, Steve, you are misinformed, biased, and illiterate. Don’t go away mad, but please just go away. B&N and Randy Penguin are your audience. Not us.

      • Sorry that you’re so upset with my factual comments. It would be terrible for the vast majority of writers that sell print books, which is far bigger than the ebook community. And you’re wrong about it not make a spit of difference to ebook authors. Those self published ebook authors are getting print deals. In fact, we have a print deal with Joe Konrath, Michael J. Sullivan and Marie Force. Three of the biggest names in self publishing. Sorry that you’re misinformed. Don’t sling insults when it’s not necessary particularly when you hide behind a user name rather than your true identity.

        The warehouses hire low skilled workers and they work in deplorable conditions or haven’t you seen those articles. Yes a warehouse will create jobs wherever they are built but that doesn’t replace local community taxes where bookstores were or other retailers that support your local community.

        I find that most of the self published writers are so hateful towards traditional publishers and anything to do with that side of the business that they’ve lost the ability to be reasonable sometimes. Amazon grew its business because they were selling books at a loss or at cost. No small retailer can afford to do that. It’s unfair competition and you wouldn’t like it if it was in a business that you were in. Amazon lowered the prices of diapers so low, that diapers.com had no choice but to sell to them. The stories go on and on. You don’t have to believe the facts.

        If you don’t like what I have to say, you don’t have to be rude and offensive. There’s no call for that.

        It’s also amazing to me that every time I speak to groups of writers they all come over to me after the meeting about how to move from self publishing into print. At every single meeting. But I think the fact that three of the largest self published authors have made deals with Kensington to do their books in print, especially since Joe Konrath is one that you quoted, should give you some indication that even the biggest names think there is considerable value than being published only in ebook with Kindle.

        • I was laughing that you’re calling me biased by the way. And illiterate too. And yes you must be right. I’m misinformed about the publishing business and you obviously know more about it than I do. So you must be right on all counts.

        • Re: Michael J Sullivan

          Maybe you missed this: https://www.reddit.com/r/Fantasy/comments/6f1v96/why_del_rey_and_i_will_be_parting_ways/

          Once again, print author =/= tradpub author.

          • Your article you gave is three months old. We just signed a new deal with Michael J. Sullivan to do his books in print. As we have with Joe Konrath and Marie Force.

            • I meant to add that we did the deal without acquiring audio rights as Michael was talking about in the article. I’m happy to have the print rights from such a talented writer.

              • I’m honestly glad to hear that. That’s exactly what I’m talking about (in my comment above; hard to keep track with all these nested comments) regarding smaller publishers offering more reasonable/favorable terms to authors than the big 5 are. If smaller publishers can put out the high quality of print books that traditional big publishers can, and are willing to offer terms that make them good partners for authors, maybe we’ll see a resurgence of print as the print books that are put out on the market come in increasing numbers from smaller publishers (more competition and less collusion, which would be good for the industry), and the big 5 stop thinking they can dictate what the entire industry looks like.

                I really do hope to see that kind of trend take off, because I think a lot of indie authors would take print deals with smaller publishers if the terms were reasonable. The main problem I see now is that most of what we’re hearing (mainly in regard to big publishers) is that the terms they’re offering aren’t remotely reasonable. And, just from what I’ve seen, a lot of smaller publishers really don’t have the quality of product that I’d expect to see when taking even a reasonable percentage cut (of the sort that’s necessary when contracting with a publisher vs. doing it yourself).

                I, as a reader, honestly prefer print. (Okay, I actually prefer audio, but I do prefer print to ebook.) As an author, it’s seeing my books in print that makes it feel most ‘real’ to me. If that has to mean POD, so be it. But if I can get that by partnering with a publisher who could produce a high quality paperback and give me terms that I can be happy with, all the better. I think a lot of other indie authors feel the same, despite how anti-print some in the indie community appear to be.

                • Thank you. That’s great to hear. I would also add that after Joe Konrath and I, Kensington, made our first deal to do three of his books in print; then Marie Force and Michael Sullivan both approached me directly. This was a result of the blog Joe and I had on his site which was a civilized back and forth discussion which ended up in a nice business deal for both of us.

                  Smaller companies can and do react differently than big companies. Marie Force had a new book being released called Delirious last week. Three weeks earlier she emailed me and asked if I wanted to do a POD version or print version of it. We already had a deal to do two of her series in print and I said sure. Well we had it into stores by the on sale date and just went back to press for more copies.

        • Sorry that you’re so upset with my factual comments.

          Nobody is upset with your factual comments. You haven’t made one yet.

          • ok, sorry to hear you don’t agree with the facts that losing local stores causes less taxes being collected in your town; not where the warehouse is 25 miles away.

            Sorry that you don’t agree that any type of retailer can’t compete if a giant company is selling product below cost.

            Sorry that you don’t agree that the most successful ebook publishers see the value in print and have signed deals to do their books in print, because it’s still the bigger piece of the market. But you can continue to be snarky if you want; I can handle it.

            • ok, sorry to hear you don’t agree with the facts that losing local stores causes less taxes being collected in your town; not where the warehouse is 25 miles away.

              Sorry to hear that you are blissfully unaware how towns that small didn’t have B&N stores to begin with.

              Sorry that you don’t agree that any type of retailer can’t compete if a giant company is selling product below cost.

              Sorry that you don’t realize that is not what’s happening.

              Sorry that you don’t agree that the most successful ebook publishers see the value in print and have signed deals to do their books in print, because it’s still the bigger piece of the market.

              Sorry that you don’t realize that 99% of of indie writers are offered only the very worst and most exploitive contracts by traditional publishers, or no contracts at all – and that many traditionally published writers are being forced to join their ranks because their publishers are letting them go (but keeping all rights to their back catalogues).

              But you can continue to be snarky if you want; I can handle it.

              You can continue to be blissfully wrong if you want; we all can handle it. But don’t expect us to refrain from calling you on your BS, in case some poor fool actually believes you.

              • I’ve already pointed out the fallacies in your logic. The only one I didn’t was that 99% of indie writers aren’t offered good deals by publishers. That’s true and there may be reasons for that. Publishers can only publish so many books and there’s limited shelf space so publishers select what they think will be most rewarding for them. The fact that most self published books do not sell big numbers justifies this decision. I know you’ll point out how many great wealth indie authors there are and that’s great for them. It worked for them and very well. But the majority of indie authors only sell very small numbers and this is why there are 1,000,000’s of books and rankings that go down into the millions.

                I think we’ve gone far enough with our comments with each other. I don’t appreciate rudeness. I haven’t given one piece of BS. I’m giving the honest answers that some people in this forum don’t like to hear. It’s generally just the same people talking to each other and occasionally I like to come in and give some insight from the publisher’s perspective that is honest and forthright. You don’t get it from any other publisher here or not very many of them.

                • I’ve already pointed out the fallacies in your logic.

                  No, you haven’t. You’ve simply denied every bit of the evidence that my logic is based on, on the strength of your own unsupported assertions.

                  I don’t appreciate rudeness.

                  No, you just like handing it out to other people. You barged in here and called every other participant in PG’s combox an ignorant liar.

                  I haven’t given one piece of BS.

                  You lie about Amazon. You lie about loss-leaders. You lie about the implications for employment and local tax bases. Or rather, as Harry Frankfurt would put it, you spout whatever narrative will appear to justifty your own position and advance your own interests, with reckless disregard for its truth or falsehood. That’s his definition of BS.

                  I’m giving the honest answers that some people in this forum don’t like to hear.

                  The people on this forum have found out the hard way what the facts are. We are not little weeping snowflakes who can’t handle bad news, thank you very much. Most of us know from long and onerous personal experience that the old way of selling books is terminally broken, and even the middlemen who used to hog the vast majority of the proceeds are now feeling the pinch. We also know that you can’t bring back the past, and it is a positive disservice to others to sell them on the idea that you can.

                  Maybe this is the point at which I should trot out Larry the Liquidator’s speech from Other People’s Money:

                  Amen. And amen. And amen. You have to forgive me. I’m not familiar with the local custom. Where I come from, you always say “Amen” after you hear a prayer. Because that’s what you just heard – a prayer. Where I come from, that particular prayer is called “The Prayer for the Dead.” You just heard The Prayer for the Dead, my fellow stockholders, and you didn’t say, “Amen.”

                  This company is dead. I didn’t kill it. Don’t blame me. It was dead when I got here. It’s too late for prayers. For even if the prayers were answered, and a miracle occurred, and the yen did this, and the dollar did that, and the infrastructure did the other thing, we would still be dead. You know why? Fiber optics. New technologies. Obsolescence. We’re dead all right. We’re just not broke. And you know the surest way to go broke? Keep getting an increasing share of a shrinking market. Down the tubes. Slow but sure.

                • I don’t tolerate rudeness. I didn’t barge in here. It’s a public forum where some people appreciate hearing facts and the other side of the story.

                  No reason for us to continue our conversation.

        • Steve Zacharius, Let me respond with an apology. It is an old tactic of mine to begin with an emotional attack. The vast majority (90-95%) will respond emotionally. Gives me the advantage, ’cause I was not emotional when I made the attack. I was deliberate. Please don’t waste your time telling me there are better ways. I have used this tactic for decades, and it has worked. Even in open court. (Had a young lawyer interrupt me. No objection. Nothing. Just blurted out an opinion from the State Attorney General. Quoted it like it was binding authority. I just looked at her and said (on the record), “Did you get your law degree out of a box of Crackerjack?” My face was turned to her, but I was looking sidelong at the judge. He smiled. I won.)

          Anyway, I poked and you reacted coolly. I respect that.

          I imagine that I may enjoy your company over tea or drinks on any number of topics, but publishing is not among them. You repeatedly assert facts that I deny. You deny my facts.

          For example, you referred to reports of deplorable conditions in Amazon warehouses. Try as I might, I could find no reports like those later than 2014, and the one I did find in 2014 was a retelling of a report from 2013 which itself was a retelling of a report from 2012. One of the reports came from a BBC ‘reporter’ who spent a week ‘undercover’ in an Amazon warehouse in the UK. Not the most objective reporting the world has ever witnessed.

          Arguendo, even if conditions were deplorable in 2012, Amazon has had 5 years to fix the problems. Absent evidence to the contrary, it is safe to assume they have.

          For my part, I referenced the son of a friend who has worked in the Amazon Alliance warehouse for the last 5 years. He loves his job and loves the environment, both physical and professional. The facility has environmental control. It is cool in summer and warm in winter. He says the work is not dangerous nor hazardous nor dirty. He says it is strenuous. There is work to be done every minute of every shift. Says some people walk a lot. I don’t know what constitutes a lot. The final qualification test of la Légion Étrangère is a 60 kilometer road march. Carrying a 44 kilo pack. And a loaded weapon. And ammo. I doubt any employee of Amazon does that every shift.

          The Air Force taught me that there is always the 2%. 2% will excel at any given task. 2% will fail miserably and grouse about it. I expect the same is true at Amazon. The difference between the Air Force and Amazon is that there are reporters eager to write the stories of Amazon’s failing 2%.

          You speak the truth you know, and I, the truth I know. –Ursula LeGuin, The Word for World Is Forest

          You got your facts from newspaper reports. (I am reminded of a line from Jonathan Lynn and Anthony Jay’s preface to the book Yes, Minister which I shall paraphrase, because I don’t have my copy at hand: Jim Hacker was trained as a journalist and as such had no facility for reporting facts.) I got my facts from someone who works there. IMO, your facts suffer from the unreliability of their sources. Perhaps in your opinion, my facts suffer from the diminutive size of the sample. After all, n=1 yields zero degrees of freedom in statistical analyses.

          Without a common foundation of facts, we cannot have a productive argument. I use the term in the sense of debate, not of quarrel. Nothing is to be gained from further discussion with you on this matter. I shall not persuade you. You shall not persuade me.

          If ever you should care to discuss the merits and demerits of Klinkerrumpf fuselage construction versus wood-and-fabric or steel-tube-and-fabric fuselage construction in WWI, give me a buzz. But on matters of publishing, no.

          Go with God.

          • I happen to have a PhD in metalurgy so we can discuss fuselage construction. Only kidding.

            I come here go share my honest opinion and try to correct misinformation that I sometimes see. Many times I speak from direct hands on knowledge of the facts. Speaking of amazon conditions were indeed from the stories reported a couple of years ago where they had ambulances on standby rather that putting a/c in the place. I don’t know if all of those conditions were corrected. It won’t matter for too much longer anyhow because robotics are replacing most of the picking and packing in warehousing. The crappy part of the job.

            I give a lot of credit to what amazon built. I just don’t care for the pricing policies. But Bezos is clearly one of the brightest minds the business world has ever seen.

            I’m very capable of having rationale back and forth conversations with people in indie publishing which is what Joe Konrath and I did on his blog and was shared in PV. It was good information back and forth and we ended up with a publishing deal a few years later. I received hundreds of emails from readers of the blog that enjoyed and found it informative.

            So let me ask you another question. What do you write?

            Steve

            • Science fiction. I hate fantasy — I threw my copy of the third book of Lord of the Rings in the gutter after reading two-thirds of it — but I have one fantasy story in me. It is a twist on the Arthurian myth, told from the viewpoint of the faeries.

              I am consumed with the Saga of Heaven. Writing the first trilogy currently. Getting a lot of flack on Kboards ’cause I’m gonna kill the dog.

            • I come here go share my honest opinion and try to correct misinformation that I sometimes see.

              Conside, please, that you may be the one who is misinformed.

              In the example I gave, you quoted news articles; I quoted a source inside an Amazon warehouse. You were unaware of my source. I was aware of yours and discounted it.

              Again, you speak the truth you know, and I, the truth I know.

              One thing I learned during my practice of law: We don’t go to court to find who speaks the truth and who lies. We go to court to find whose truth is stronger.

              Gentlemen, I beseech you in the bowels of Christ, think you that you may be mistaken. –Cromwell

              • To be fair, in your example you’re speaking of only one warehouse I believe. I haven’t seen new reporting about the conditions in all the warehouses. I hope they have improved the situations. They wouldn’t have if it weren’t for the journalism that uncovered it. And they’re certainly not the only warehouse that was doing this.

        • It would be terrible for the vast majority of writers that sell print books, which is far bigger than the ebook community.

          Of course it will be terrible. That just has to be accepted. Many of those writers will adapt to the changing market. Paper authors will become eBook authors. Others might remodel homes or go into the insurance business.

          Elevator operators found something else to do.
          Telephone operators found something else to do.
          Typewriter repairmen found something else to do.
          Commodity pit traders found something else to do.

          I am confident authors can do the same.

        • Amazon grew its business because they were selling books at a loss or at cost. No small retailer can afford to do that.

          Amazon sold at lower prices because it had a large inventory of different goods, and its costs were lower. This same feature is what pushed so many specialized shops out of business before Amazon existed.

          Shoe stores? TV stores? Women’s clothes? Men’s clothes? Record shops? Meat markets? Corner drug stores?

          The retailer who stocked more items took advantage of the economies of scale. He didn’t have to sell below cost because his costs were lower. He could make a profit at a price that was lower than the specialty stores cost. So, he sold below costs, but not below his costs. He sold below the specialty shop costs. I agree a specialty shop can’t compete with that, but it’s not ufair.

          B&N sold a book at a lower price than the corner bookstore because its costs were lower, not because it sold below its own cost. Amazon sold lower than B&N because Amazon’s costs were lower.

          Amazon isn’t doing anything that hasn’t already been done a zillion times before.

          What is surprising is that bookstores have survived so much longer than the other specialty stores that used to line the streets. But, the same pressures that forced the other specialty stores out of business are now working on bookstores.

          • Don’t forget that Amazon started as a very, very small bookseller.

            • Won’t forget that. But that was a long time ago and it was a different world. Hey, I give them tremendous credit. The world needs more brilliant people like Bezos.

          • This is simply not correct. They didn’t sell lower because their cost was lower. They sold the books below or at what they bought them for in many many cases knowing that other retailers couldn’t afford to take the hit and lose the money on a bestseller. I know what discount Amazon buys books, and I know what they were selling them for. They’re not the only company to do this but they certainly were in this scale.

            • Of course they knew other retailers couldn’t meet their prices. They knew they could beat the competition. I readily concede that. That was the competitive strategy.

              I will also concede we can find instances of selling some books below acquisition cost. But, those loss leaders don’t make a case that Amazon’s policy was selling below marginal acquisition cost.

              And we can likewise observe that Judge Coates finding said Amazon was not losing money on books as publishers claimed. The publishers lost that one. Where did she go wrong?

              But the best evidence is Amazon’s financial statements.They show very healthy cash flow. That’s impossible for a company that has a policy of selling below acquisition costs.

              Amazon stock didn’t keep going up because the market thought Bezos was a great guy. It’s because of that cash flow.

              • It was a lot more than some books. I can remember many instances of them selling our hardcovers which retailed at list for 25.00 for 1.99. They were paying approximately 12.50. This is was an exception but selling 25.00 books for 13.00 was not uncommon at all.

                I’m not sure what Judge Coates finding claimed. I don’t know if she was just looking at ebooks or print books as well.

                You know that Amazon makes almost all of their money from AWS. The media division is peanuts. The other money comes from distribution fees that they charge vendors for distributing their products. But the book revenue is very small. And then you’d also have to breakout ebooks from print books and they’ve never broken down financial data to this level; nor will they. They don’t even report their ebook sales like every other ebook retailer does to Bookscan, although they do report print numbers.

                • It’s called “getting rid of your inventory that’s just sitting around and taking up space.” Something brick and mortar retailers do all the time.
                  Meanwhile, your contention that Amazon is somehow hiding some kind of financial loss by not reporting ebook sales is hilarious. The only costs Amazon bears for those are server space.

                • It was a lot more than some books.

                  Ok. But that’s still a sliver of their book business. That doesn’t demonstrate a policy of selling below acquisition cost.

                  Judge Coates found that contrary to the publishers’ claims, Amazon was not losing money on its book business. That was a critical claim in the publishers case. They publicly hammered it over and over. She found Amazon was actually making money. It was a repudiation of the claim that Amazon was selling its books below cost.

                  You know that Amazon makes almost all of their money from AWS.

                  No, I don’t know that. We have to distinguish between economic profit and accounting profit. There is an economic profit measured by cash flow before the accounting profit is calculated. The disposition of the cash flow determines what the accounting profit is.

                  Those who doubt this might ask why Wall Street traders continue to buy Amazon stock. They aren’t doing it because Amazon is consumer oriented, looks at the long term, or Bezos is inspiring. They are doing it because they can read financial statements and see very attractive cash flows. That’s why they ignore the awful accounting profits.

                  I agree books are a small part of what they sell. Any class of merchandise is a small part of what they sell.

                  The numbers don’t support the idea that Amazon has a policy of selling below acquisition costs. And specifically, Judge Coates’ finding in the collusion case refutes the idea that Amazon is selling below acquisition cost for its book business.

                  I agree Amazon has multiple business line, and I accept Amazon doesn’t report eBooks to Bookscan. OK. What’s the point? What am I missing?

                • The Judge was looking at ebook sales. It’s print sales where amazon hurt the traditional bookstores. Those are the books that were more expensive and were being sold below or at cost. I don’t know at what point you can stop calling them a loss leader when it was most of the bestsellers. Those are the books that generate the vast percentage of billing. But amazon makes money on the long tail on the books that others don’t carry and those were sold at normal prices. So overall they may have been making money. I don’t know and I don’t know that Coates looked at print and e together. But if you’re selling the vast quantity of new bestsellers at cost, brick and mortar stores can’t compete. Amazon with their other areas of business was able to absorb that loss. Now that ebook prices are on agency with larger publishers, and amazon loves that, because now that they’ve captured 65% of the ebook market they are happy to have higher prices.

                  Many other industries have fixed prices as well. It isn’t just books. Look at Sony and Apple as two examples.

                • The judge looked at all books because that was the accusation the publishers made. They claimed Amazon was a predatory pricer, unfairly using its monopolistic market power to stifle competition. You can’t demonstrate monopolistic behavior with only one of two very close substitutes. Both very close substitutes have to be monopoly priced or neither is effective.

                • I will review Coates decision because I don’t remember it covering print books. But it is clear if you even look at pricing today that amazon is selling hardcovers very near cost. No other retailer could afford to do that in this type of scale. One or two titles, sure. But not every major bestselling new release.

              • Tom, that is simply not correct. In talking about book retailers now, all the books they buy or 95% of them are returnable to the publisher. So they wouldn’t just give them away to clean out their shelves. That would be the same thing as a 100% sell for the publisher on those titles. Now these could have been titles that were printed for B&N’s proprietary line, and then it’s only their books, but we don’t know that. No matter what, donating $1,000,000 worth of anything is a substantial donation and I’m sure very welcome and I don’t know why anybody would belittle the donation.

                I did not say that Amazon is hiding a financial loss at all. You’re misunderstanding what I’m trying to say. I’m saying that the media business for Amazon, which includes books, music and video; I believe they combine all of them into that unit, is not broken down into any detail. Nobody knows how much one part is making and another is losing. My point was that they make very little money in media but almost all of their profits come from their web services. This is well known. I was saying they don’t report publicly to bookscan their ebook sales even though apple, nook, kobo, BN, Baker, OverDrive and every other ebook retailer happens to. Amazon does report their print book sales to bookscan. But they keep their ebook sales private for some reason. Publishers have gotten around this by supplying the sales information on their own titles to bookscan. So the only ebook sales that aren’t reported now are indie sales. Hope that clears up what I was trying to say.

                • But they keep their ebook sales private for some reason.

                  Jeff doesn’t call anymore, but I suspect they don’t want anyone to know the size of the independent eBook component. This prevents anyone other than Amazon from knowing the full size of the eBook market.

                  Publishers can figure out how many of their own eBooks Amazon sold, but they can’t calculate the eBook component. Hence, they can’t see the full eBook market.

                  Add that to Amazon’s ability to track page reads on Kindle, and it gives them a powerful advantage. Amazon knows more about how people read any publisher’s books than the publisher does.

                • Like all smart companies, Amazon keeps a lot of the information they’re not required to disclose private.

                • I believe they can only track pages on KU titles. And Scribd and Oyster we’re doing this before them.

                  Yes I agree they don’t want people to know the size of the indie business for better or worse. But the biggest of the indie authors want print deals. And you know what? They share their numbers with the publishers when trying to get these print deals. From what I’ve learned from our deals with the biggest indie writers, the big ones sell a lot of ebooks at fairly low prices. Most of the other indie authors sell either very small quantities on a per title basis, but they write a lot of titles. Faster than publishers would want to publish them in print. So I don’t know that having access to the specific ebook sales data would make any difference. But this is probably for another topic.

                • I would add that what we learned from the tracking data is that most genre fiction readers read far less and much slower than we could ever imagine. It takes some people months and months to read a book.

                  The new KU data isn’t very valuable to us any longer because very few major publishers have any books in the program.

                • The new KU data isn’t very valuable to us any longer because very few major publishers have any books in the program.

                  I won’t challenge anyone in what they find valuable. But I suspect Amazon sees great value in identifying authors who the public likes. The type of books people finish. The books they finish in the least time. Changing preferences can allow them to publish or promote certain types of books. Couple that with knowledge of what books I finish, and they can pitch better to me.

                  Tracking consumer behavior with any given book can be a leading indicator of authors who are falling out of favor with consumers. Same with authors on the rise with consumers. Some would use that in determining who they will publish in the future.

                  Regarding KU, why do you say a KU book is the only kind where they can track pages? When I see the page for a KU book, I can download under KU, or I can buy it. What’s the difference for tracking?

                • It’s an open question whether publishers have the right to sign books up for KU under standard publishing contracts. It’s also not clear what royalty rate would apply if they did have the right.

                • I’m saying that because with the KU model it’s based on tracking pages for payment. When you download a regular ebook you can be offline and never turn on WiFi and share what you’ve done with the books, whether you’ve read them or not. I do not believe any of the ebook retailers can track reading progress unless it’s in a subscription model but I will find out for sure. But once again, it’s primarily indie authors that are in KU. There wouldn’t be books or very many books that are on agency in KU.

                • Terrence I just read the Judge Cotes decision and she doesn’t talk about the overall profitability of Amazon’s book business. I didn’t see any mention of it. The only time print books were mentioned was in terms of apple setting the ebook price in relation to the printed book price. Then publishers raised the price of the print book so that the ebook would be higher priced as well. But nothing about Amazon making money overall on the book business that I could see.

                  The only issue of the case was whether the publishers conspired with Apple to raise the price of books, not whether Amazon was making money on them. To this day, they still sell bestselling new releases just a bit above cost. I believe it has gone up slightly because I haven’t seen any recent books below cost. I just did a check of the recent bestsellers. However the prices it sells at are still lower in most cases than B&N would charge and certainly way way lower than an indie bookstore could ever afford to charge.

                • I just read the Judge Cotes decision and she doesn’t talk about the overall profitability of Amazon’s book business.

                  We would have to read the whole transcript, not just the ruling. But The notion that Amazon was losing money was rejected.

                  The issue in the case was indeed the collusion of Apple and publishers. But in dealing with that kind of issue, many other issues enter the arena. In pursuing those other issues, publishers made claims Amazon was losing money on its book business. They make them today and have nothing to back them up. I believe that is the same claim you made earier? (it’s a long thread.)

                  I concede that Amazon does sell some books below cost. However, that observation does not make the case that Amazon has a general policy of selling books below acquisition cost. Lots of retailers do the same thing with a whole range of products, but that hardly demonstrates they are losing money on their overall business or on a specific product line.

                  Amazon is certainly engaged in price competition with other bookstores. But, the key argument from the publishers has been that they are losing money on their book business.

                  I agree Amazon prices are below B&N. OK. So what? That’s what price competition is, and they can do it because they have a whole different operating cost structure. They have economies of scale in their larger business that B&N does not have. Just like Sears had when they put so many small shops out of business. Just like B&N had when they put so many small bookstores out of business.

                  And their prices are indeed way lower than independent bookstores. Again, so what? That means the independent shop loses to a much more efficient competitor. But it does not mean that competitor is losing money on its book business. It means someone has come along who just does it better.

                  But a question:
                  Do the publishers sell books to Amazon for lower prices than they sell them to independent bookstores? Lower than they sell to B&N? And those bestsellers? Do all book retailers pay the the publisher the same price per book?

                  And another question:
                  Does one retailer receive any financial incentive from publishers that some other retailer does not, or does not qualify for? Are there volume discounts? Are there incentives available to everyone, but at levels the independent bookstore cannot reach?

                  Bottom line question:
                  Since books may flow through a few different channels to get to the retailer, does the independent bookstore end up paying more money for what they get than Amazon does?

                • Their cost structure has nothing to do with them selling books below their cost. If a 25.00 book cost them 12.50 and they’re selling it for 12.00; it’s below their costs. It has nothing to do with them being more efficient at their operation.

                  The law requires equal discounts for equal channels of distribution unless there is a meeting competition proof shown. A wholesaler can get a higher discount than a bookstore because they have to distribute it from a location to other locations all over the country. All bookstores would have to get the same pricing. All publishers would have different levels of discounts.

                  I never said they were losing money on their overall book business. But if they sell the bestsellers at or near cost, the other stores cannot compete. AMZ has other businesses to cover those loses while they destroy their competitors in this one area.

                • Their cost structure has nothing to do with them selling books below their cost. If a 25.00 book cost them 12.50 and they’re selling it for 12.00; it’s below their costs. It has nothing to do with them being more efficient at their operation.

                  Of course it does. Cost structure determines how much below acquisition cost they can sell. A firm with a high cost structure cannot afford to sell at the same below-cost level as a firm with a low structure. It also determines how much above the acquisition cost it can sell and remain overall profitable.

                  AMZ has other businesses to cover those loses while they destroy their competitors in this one area.

                  Specialty stores can’t compete because of the cost structure. Amazon also sells hardware, jackets, and printers below what specialty stores do. Books aren’t special. They get the same treatment all the other product lines get. Books let them sell those other items at low cost. Or are they selling all these items below acquisition cost?

                  We hear more from bookstores because they are probably the largest surviving type of specialty stores. They are the last to go.

                  But, there is one thing that is a bit special about books. Publishers are the only ones hauled into federal court for colluding to fix prices. The jacket guys and hardware guys didn’t do that.

                  All publishers would have different levels of discounts.

                  I don’t understand your answer about what bookstores pay for books. Let me make it simpler. On a unit price basis, does Walmart pay more or less for a best seller than the independent corner bookstore? If Walmart pays $10, does the corner independent bookstore also pay $10. Or do they pay more?

                  I accept there are different levels of discounts, and I accept those familiar with the intricacies can rhetorically outmaneuver those who don’t. So what’s the answer? Given all those discount schedules, does Walmart have an advantage over the independent corner bookstore in buying their stock?

                  Or maybe we can look at it another way. Would the independent corner bookstore prefer to pay the unit costs it does, or would it prefer to pay the same unit costs as Walmart?

                  Is it possible for Walmart to sell above Walmart unit cost, but below the unit cost of the independent corner bookstore?

              • For some reason Terrence your recent comment isn’t showing up on my feed. I did get the email about your comment though. This software is dreadful in trying to follow a conversation.

                Amazon was selling the bestsellers below cost. That’s where bookstores make their money, on the new releases. Amazon makes their money there of course but primarily on the long tail books. Ones and twos of millions of books that a retail store can’t stock. So Judge Coates was looking at only ebooks and that’s a totally different argument. She wasn’t looking at print books. And in total they may not be losing money on their overall book business. But they had to be losing money on the bestsellers and they were willing to take the hit so that other stores couldn’t compete on the new releases. A lot of people don’t agree with the Judge’s ruling as well.

                AWS provides the vast amount of revenue and profit of their entire company. The margins are less than they used to be because of increased competition from Microsoft and IBM. But because this area is so profitable, they can afford to lose money in other areas for long periods. They don’t worry about it because they don’t have to. When competition is lessened or wiped out, then they can raise their price and make some margin on the items. They’ve done it in many areas like diapers.com and others where they sold the items until the company went out of business and sold to them.

                Investors also invest in Amazon because they see it conquering all of retail and figure they will be the last ones standing. And when that time comes, the profits will be huge. The profits are still very low and are hit or miss some quarters.

                • But they had to be losing money on the bestsellers and they were willing to take the hit so that other stores couldn’t compete on the new releases. A lot of people don’t agree with the Judge’s ruling as well.

                  Sure they lost money on specific bestsellers. That happens with any retailer who offers a loss leader. But they didn’t lose on their book business.

                  If we refine the claim by publishers to say, “Amazon lost money on specific loss leaders,” then we are in agreement.

                  But, the clams from publishers, and many others, is that Amazon generally sold books below acquisition costs, and did that as a policy, losing on the whole business line..

                  One would have a better case for just about any other Amazon product line. Only one product line was subject to discovery and disclosure in federal court. The publishers’ contention that their actions were justified by Amazon’s predatory pricing was a key factor in their defense. It was examined and found to be false.

                  And AWS? It was built with the cash flow from the business lines that preceeded it, including books. That’s why Amazon accounting profits are so dismal. AWS is the Amazon profit that so many look for, and it’s huge. Stockholders now own AWS, something that didn’t exist before. That’s economic profit.

                  Specialty stores can prosper, but not at the scale at which a retailer with a wider selection operates. We have been seeing this same thing play out ever since the Civil War. The players and situations differ, but the fundamental dynamics are the same. Want to see what happens? Look at the economic history. We’ve been here before.

                • Another example of the “loss leader” concept are the retail bookstores that they are opening, now at 11 stores. These are in some of the highest rent districts and they offer small selections of books. There is no way that Amazon can make any profit on these stores but they will absorb the loss to hurt other bricks and mortar stores. Once the other stores are gone, they can raise their prices.

                • And PG, why exactly do you think they choose to keep only the ebook business private and not their print book sales? Everyone knows the level of all the traditionally published ebook sales through PubTrack Digital already. Why hide the indie publisher portion? Do they not want to share the sales of the really big authors or do they not want to show how many ebooks sell five copies?

                • Steven, your points regarding Amazon would receive a much better hearing if there weren’t this distinct aura of “unlike the saintly brick and mortar stores” hovering around every single one of your comments.

                • I’m sorry if I happen to like bricks and mortar stores, particularly bookstores. Libraries too for that matter. I’m not really a fan of most types of retail stores other than those I have to visit. These would include Apple, hardware stores, dry cleaners, etc.

                  Otherwise I actually hate shopping. But I can appreciate what they do for the local community and the tax base.

                • There is no way that Amazon can make any profit on these stores but they will absorb the loss to hurt other bricks and mortar stores.

                  I don’t think we have the data to come to that conclusion. Nor do we have enough to determine their motivation in opening the stores.

                • We will never have the data on their retail stores. But it stands to reason if you have a limited selection of books and they are the bigger selling books that you’re selling for 1.00 or 2.00 over your cost for hardcovers that you won’t be able to cover the cost of rent at stores in Columbus Circle. This is some of the highest priced real estate in the country.

                • why exactly do you think they choose to keep only the ebook business private and not their print book sales?

                  Well, I gave my reasons, and you’ve given them a fair hearing. That’s fine.

                  So, why do you think they withhold the information? Also, is there any reason they should make the information public? How do they benefit?

                • I really don’t know the answer. It would only be speculation.

                • So speculate. That’s about all we have seen here.

                • PG, I don’t think there is a question that a publisher could put a book in KU but most publishers don’t want to. The payout is much too small and the term is too long. Let alone trying to figure out how to pay the author a royalty.

                • Steve, I happen to like brick and mortar stores. But, as has been pointed out here by nearly everyone, you’re reasoning backward from your conclusion.

                • But it stands to reason if you have a limited selection of books and they are the bigger selling books that you’re selling for 1.00 or 2.00 over your cost for hardcovers that you won’t be able to cover the cost of rent at stores in Columbus Circle.

                  That would take a bit more than reason. We would need pricing, sales, and cost data that we don’t have. Otherwise we are back in the realm of speculation.

                  Anyone know if they consider an online sale of a book on the shelf, from within the store, to be a sale for the store?

                  And if B&M stores think Amazon can drive them out of business with 5,000 books, why are those B&M stores carrying more than those 5,000?

                • The entire concept of the B&N Superstores was to offer a huge selection of books. The new concept stores that they’ve been testing have been smaller stores. I’m sure there are issues with leases that would stop them from reducing store foot print rapidly.

                  I can’t imagine it is remotely possible to make money on those stores. The rent is enormous and they have limited selection. Brick and mortar stores are stocking the same bestsellers plus much bigger selections and are struggling so how could an amazon store possibly make money.

                  It does serve another function which is to showcase their devices though.

                • Terrence you’re bringing up the ebook lawsuit that happened years ago already and now every major publisher is on Agency and Amazon is thrilled about it. They’re making higher revenue on agency.

                  Selling a book below cost is just that. They’re not looking at their cost structure to determine at what price they should sell it. They’re looking at just making it low enough so that no other retailer can do it, and then they’ll take the hit. They don’t care about their costs. There have been times where I’ve seen hardcovers for 1.99 where they paid 14.00 for the book just so they would hurt the competition. This is all part of AMZ’s strategy to capture market share and then wipe out the competitor. Just look at what they did to diapers.com and soap.com. It’s well documented. Bezos said he would give away the diapers if he had to, to force Diapers.com to sell the company to Amazon.

                  And no, they don’t do it on all products. For many products they’re often not the lowest price either. That’s why there have become add on extensions to browsers where you can check the amazon price against other sites automatically.

                  There have been other industries over the years with price fixing, it wasn’t unique to books. And many products have fixed prices right out the door, like Apple. If you discount Apple, you won’t be carrying it any longer. The steel industry had price fixing based on the phases of the moon decades ago.

                  What I was saying is that “like kinds” of stores, have to have the same discount structure. First of all Walmart is not an account that publishers bill and ship directly. They are serviced by a wholesaler. Wholesalers do get a different discount than a bookstore because they have to repack and reship the books and service the accounts with field teams on a constant basis. Walmart does not rearrange the books and replenish them, so the wholesaler has a very high cost structure. Therefore a wholesaler gets a higher discount than a store where a carton of books would just be shipped directly to the store. But that’s because there’s a lot more labor and shipping costs for the wholesaler to distribute the books.

                  The concept is that in the end they should all be having similar costs.

                  I would add that the shipping of books is an art in itself. Everything is timed to land so that they can be on sale the same date everywhere.

                • Brick and mortar stores are stocking the same bestsellers plus much bigger selections and are struggling so how could an amazon store possibly make money.

                  Like I said, Jeff doesn’t call anymore. But, I have been expecting to see the results of Amazon’s pages read data gathering.

                  My speculation is they are stocking their stores based on what consumers like, as revealed by pages read. This would then be a small collection of books that were very popular with consumers. Books they finished, and maybe finished over a short time.

                  A collection like that would increase the probability that a consumer could find something he likes in a quick visit. It’s different from shelves of best sellers because they know what consumers read as opposed to what they bought.

                  This would be a new retail model. Discover consumer preferences via online monitoring, then push those goods into physical stores.

                  I also wouldn’t take existing bookstore operations as a guide for what Amazon’s B&M fate will be. I think it was Riggio who told Bezos he had no chance. And that was from a guy who knew a lot about book selling.

                • What I was saying is that “like kinds” of stores, have to have the same discount structure.

                  And what I was asking is whether Walmart pays a lower unit cost than the independent corner bookstore.

                  I agree there are various factors that go into the calculation of what Walmart pays, and there are various factors that go into what the independent corner bookstore pays. I am asking about the results after considering those factors.

                  So, does Walmart pay a lower unit price than the independent corner bookstore? How much lower?

                • Terrence you’re bringing up the ebook lawsuit that happened years ago already and now every major publisher is on Agency and Amazon is thrilled about it. They’re making higher revenue on agency.

                  Well, I’m bringing it up because we are discussing events that took place over those same years.

                  And if Amazon is now making more money on agency, good for them. The collusion was really incompetent. Embarrassing actually. Back rooms in eateries? I expect better from our price-fixers.

                  Selling a book below cost is just that. They’re not looking at their cost structure to determine at what price they should sell it.

                  The cost structure determines if they can afford to sell loss leaders below cost. If it didn’t, then the independent corner bookstore could easily meet Amazon prices. They can’t because of the cost structure

                  Amazon’s cost structure is that of a giant, multi-product retailer and service provider. Amazon isn’t a bookstore, and we shouldn’t expect them to act like one.

                  For books, specialty stores with one cost structure are competing with a giant retailer with another.

                  The specialty stores are also competing with giant big box stores with a different cost structure.

                  To make it worse, the independent specialty stores are also competing with a giant specialty store (B&M) with yet another cost structure.

                  Books are sold by sellers with at least four different cost structures. It’s reasonable for any analysis of book sales to look at cost structures. These are different businesses selling a common product.

              • Terrence you’re obviously an intelligent guy that is open minded. I’m curious as to during the Hachette/Amazon war if you think the issue that Amazon wasn’t stocking Hachette’s books in a timely manner was due to the fact that Hachette all of a sudden couldn’t get them inventory or that Amazon was punishing them?

                • Tom I’m not sure why you’re saying that. You’d have to explain further. I don’t know why you’re saying it’s backwards. If Amazon continues to sell products at or below cost on some items, some retailers won’t be able to compete and that will be the end of those types of bricks and mortar stores.

                • I’ve read about the Hachette thing and orders, but I didn’t know much about book ordering then, and might know less now.

                  I heard claims on both sides, and each side was advocating for itself. But I have to plead ignorance because I really am ignorant. I lack the knowledge and tools to evaluate.

                • I hate that you can’t always reply to a specific comment with this software. I’m not going to speculate why Kindle doesn’t share their data. That’s for another blog post or a different article on PV. Maybe when Data Guy does his next round of data analysis. i read an article a month or so ago that said Amazon was going to be stopping the scraping of data by bots so I don’t know how he’ll be getting around that. DG came to one of our parties at a writer’s conference and I had quite an interesting conversation with him. Very smart guy.

                • I guess we will have to agree to disagree. If you’re selling below cost, you’re selling below your cost no matter what. This is just the cost of goods I’m talking about…..not the overhead of the operation. If the company is selling a product below what they paid for it, they’re selling it at a loss. A small retailer could not afford to do that to any scale or they’d be out of business in a month. We’re talking about the biggest selling items that a bookstore would carry. If they were selling the majority of the new releases below or even at their cost, they couldn’t cover their overhead.

                  Discounts to different channels of distribution were originally set up to try to equalize the cost for all of the different types of business. A chain can either have books sent to their warehouse, which they then have to repack and reship to local stores, which is a significantly higher cost than just shipping the books directly to their retail stores directly or to an indie bookstore. Sales to a wholesaler like Baker or Ingram would be similar. You ship to one of a few warehouses and they have to repack and ship to indie stores and libraries. Publishers ship directly to the various warehouses of the largest retailers like Amazon, or the distributor that ships to Target, Walmart and the various clubs.

                • Overall discount structure is public information and you can go to the publisher’s terms and see the different discounts for different channels of distribution. Wholesalers would get a larger discount than an indie store because the wholesaler has to reship and redistribute the product.
                  The end result when figuring out shipping costs and distribution costs is to make everyone even.

                • Amazon stores are stocking stores based on unit sales or anticipated unit sales based on prior history. It’s not based on pages being read from KU data. They don’t care about that because once they sell the book, they don’t care if you read it or don’t read it. It’s still a sale. This is why the stores are primarily best sellers and popular backlist titles. With a limited amount of retail space they are interested in inventory turnover. They don’t carry many indie books, first of all because of the high cost of them in POD, or even that many of their own Amazon titles because they want unit sales. When the stores first opened people thought they would be filled with Amazon titles and that hasn’t happen. Maybe if the stores were bigger that would be the case. Of course the stores are also there to sell kindle devices.

                • If the company is selling a product below what they paid for it, they’re selling it at a loss. A small retailer could not afford to do that to any scale or they’d be out of business in a month.

                  [I’m also somewhat lost in the thread structure, but will try to match things.]

                  Sure. There is nothing to disagree about. Unit sales below cost are a marginal loss.

                  And the reason a small retailer can’t do that is his cost structure. The reason a larger retailer can is his cost structure. Walmart can do what the independent corner bookstore can’t.

                  That’s how loss leaders work. The extent to which any retailer can afford them is a function of his cost structure.

                • Overall discount structure is public information and you can go to the publisher’s terms and see the different discounts for different channels of distribution.

                  Sure I can, but I’m too lazy. Publishers know the answer. That’s what they do everyday. So, why not just tell us?

                  Publishers tell us all the time how Amazon is selling below cost, so they must know Amazon’s costs pretty well. They tell us what independent corner bookstores can’t afford, so they must know the costs pretty well.

                  But, I’ll make my case anyway.

                  Let’s say Walmart pays a significantly lower unit price than the independent corner bookstore. That lets them sell at a price the independent can’t. They can even sell close to cost, and there is no way the independent corner bookstore can compete.

                  So, the publishers are maintaining a system that puts the independent bookstore at a distinct disadvantage, and that’s before Amazon even enters the picture.

                  And if Amazon pays significantly lower unit costs than the independent bookstore, that puts the independent at a significant disadvantage before Amazon even prices their goods.

                  The publishers are running a system that gives Amazon, Walmart, and Target a significant advantage over specialty bookstores. And those large retailers have lots of other product lines.

                  A more rash person than I might even suggest the publishers are trying to drive the independents out of business by giving a distinct cost advantage to larger players.

                  So, how do unit costs for Amazon, Walmart, B&N, and the independent corner bookstore compare?

                • It’s not based on pages being read from KU data. They don’t care about that because once they sell the book, they don’t care if you read it or don’t read it. It’s still a sale.

                  Are you speculating on how Amazon is stocking these stores just as I am? Like I said, Jeff isn’t calling me anymore, and I’ll be distressed if he’s calling everybody else here.

                  I disagree about Amazon’s lack of concern about the level of satisfaction a consumer derives from his Amazon purchase. Satisfied consumers are more likely to be return buyers. I think that’s a common attitude among many retailers.

                  If a store can stock its goods so a consumer is more likely to derive satisfaction from its sales than the same consumer derives from a competing store, then that consumer is more likely to return.

                  I agree it is an administrative pain to carry independent books. But, it’s relatively easy to stock paper versions of traditinally published books with a high pages read and completion index. Those are proven books.

      • Did you know that the home page of the passive voice says that this is a place to also discuss traditional publishing too?

        • Since I’m easily confused by the format here, I don’t know if that is directed at me. Sure it’s a place to discuss traditional publishing. There have been zillions of words here about traditional publishing.

          • Sorry it was too someone else who basically told me to get lost and I wasn’t welcome here with my opinions. It’s been a pleasure talking with you.

        • Terrence,

          I wasn’t speculating here. I’ve spoken to our Amazon rep about the books they select for the stores. Of course each local location can make some independent decisions as well.

          You said it would be easy to stock paper versions of traditionally published books with high pages. That would encompass the big bestsellers. If it were a self published POD book, there probably aren’t enough copies sold in print to get it into the algorithm even if they were using KU data. Keep in mind that the KU data doesn’t include major publisher books from big 5 publishers since they don’t participate in KU.

          I think Amazon cares about the buyer experience and of course they want consumers to be happy. But when you’re dealing with books it’s a little different since there are hundreds of thousands of them that are available. Nobody is going to like every book.

          • I don’t discuss discounts in a public forum, just like I don’t discuss advances with authors here. But as I said terms of service are available. The discount structure has been designed so that in the end the various channels are competing on approximately the same cost structure.

            Also Ingram and Baker’s terms of service to indie stores are available to everyone.

            Publishers also make sure that the books are arriving evenly for the on sale date which is not an easy thing to accomplish.

            • Keep in mind that the KU data doesn’t include major publisher books from big 5 publishers since they don’t participate in KU.

              How do we know page monitoring is limited to KU?

              But when you’re dealing with books it’s a little different since there are hundreds of thousands of them that are available. Nobody is going to like every book.

              Sure there are lots of books. And there are lots of items in Walmart. retailers still want their customers to find satisfaction in their purchases.

              • That’s what I’ve been told by amazon. Besides once you download the book you can be reading it with WiFi turned off and no connection to amazon. You can even be reading it on an iPad and Apple would never allow that data to be shared or collected.

                • I suspect Amazon can monitor all page reads, but use them for supplier payments only for KU.

                  I agree reading preferences would reduce the sample size. But, it still remains a very large sample.

                  It’s not perfect. OK. It’s still very good, and far better than what anyone else has.

                  A sample is intended to accurately reflect the targeted population. No sample is a perfect reflection. Statistically robust analyses pay great attention to the flaws in their samples.

                  The most obvious flaw in the Amazon page read monitoring is the complete lack of data from paper.

                • They cannot monitor pages read if you are not connected by WiFi. And I’ve been told by them that they only use this for KU, since their payment is based on this method.

                  How would they ever have a way to get pages read if you’re off line?

                • In sampling, one is not looking to poll a population on a question, but to get an accurate estimate of the population on the question. So sample sizes are often far lower than the population.

                  A sample is statistically valid if every member of the targeted population has the same chance of being part of the sample. Unfortunately, few samples are up to this standard.

                  For example, for national electoral polling, people without a phone have no chance of being part of the sample. People who have only land lines cannot be part of the sample. So the sample is flawed.

                  Good statistical analysis considers these flaws. So, your observations are in line with best practices for statistics. Some people with Kindles have no chance of being part of the sample. OK. Many years of experience shows we can get very good results even if people can highlight known flaws in the sample.

                  So, we should all be aware of sample flaws. That’s how good work is done. For Amazon books, there are Kindle readers not counted, and no paper is counted.

                  (Note the Author Earning Report does not use a sample. It defines a population and doesa complete count.)

                • The problem with the ae report is that it looks at a slice in time. It’s totally different if it’s the last Tuesday or the month when new releases go on sale. But it’s a good tool to use.

            • I don’t discuss discounts in a public forum, just like I don’t discuss advances with authors here. But as I said terms of service are available.

              Publishers routinely publicly discuss their idea that Amazon is selling below cost. They treat it like voting. Early and often. There is no reluctance to talk about that in a public forum.

              So, let’s try something similar. Can an independent corner bookstore buy bestsellers from Walmart at a lower unit price than he can from the publisher? I have read bookstore owners making that claim. Is it true?

              I suspect publisher reluctance to discuss what they charge the independent corner book store is because they really are giving Walmart a much better unit price cost. They tell us the information is publicly available, but they won’t discuss it publicly? Odd.

              So, the independent corner bookstore gets hit by the publisher on one end when he charges them a much higher unit price than he charges Walmart. Then publishers tell us he gets hit on the other end when Amazon sells at cost.

              If the independent corner bookstore is being forced out of business, the publishers are up to their ears in it because of their pricing policies.

              This is easy to test. Ask the independent corner bookstore is he wants the Walmart unit price.

              • No they could not. They might claim that but it is certainly not the case. Publishers know the cost that they sell books to an account so they certainly are aware when that same account is selling below that cost regardless of what efficiencies they might have. The efficiency is never going to help reduce that loss. It might prevent further losses but not that cost of goods sold versus selling price differential.

                Also as I mentioned accounts don’t sell directly to Walmart. They go through a wholesaler who would have much higher costs in shipping to 2000 stores than the indie bookstore who gets the books shipped directly to their store. Also the wholesaler has to retain a staff across the country to merchandise and replenish the books at these accounts. That’s what the cost structure tries to even out. But the indie certainly would not make any money buying the book from Walmart at reselling it. The overall difference in all the discounts is very small.

                Publishers don’t discuss discounts. It’s proprietary information. Just like we don’t discuss advances with a particular author. But publishers have to remain legal with those discounts.

                • Publishers know the cost that they sell books to an account so they certainly are aware when that same account is selling below that cost regardless of what efficiencies they might have.

                  I’m sure they do know that. In that case, they would know if Walmart is selling above Walmart cost, but below the price publishers charge independent corner bookstores.

                  Walmart acquires a book for X.
                  The independent acquires a book for X+2.
                  Walmart sells above Walmart cost at X+1.

                  So, publishers are setting up independent corner bookstores for failure by the pricing preferences they give to Walmart and Amazon. Then they are pointing their fingers at Amazon and accusing it of driving the independent corner bookstore out of business.

                  The reduced price publishers give Amazon has the same effect on the independent corner bookstore that Amazon’s selling at cost does.

                  And since I have introduced Walmart, do they sell bestsellers below or at their cost? If so, is their objective to drive independent corner bookstores out of business?

                  Publishers are eager to talk about Amazon’s activity vs Amazon’s cost, but don’t want to talk about their own pricing to Walmart and Amazon.

                  Does anyone here have any insight into the pricing differences? Does anyone here with experience in independent bookstores think they would prefer to receive Amazon unit prices from their suppliers? Or would they be indifferent?

                • No. This is simply not correct. The differences between channels of distribution is small and it’s designed to cover the additional costs of getting books to their final destination and the handling that is required for those books. And Wal-Mart does not sell the books below cost.

                • So tell us about the differences retailers pay the supplier. When the independent corner bookstore pays $15 for a book, what does Amazon pay? What does Walmart pay?

                  And what do you mean by, “the additional costs of getting books to their final destination and the handling that is required for those books.”

                  You have cited Amazon selling below cost many times. Exactly what are the components of that cost you refer to? Is this what Amazon pays the suppluier, or is it what Amazon pays plus “”the additional costs of getting books to their final destination and the handling that is required for those books.”

                  What do you mean by Amazon selling below cost? Where do you get the cost?

                • I’m not going into specific discounts. But when a publisher comes up with a discount structure for a specific channel of distribution it takes into account that a wholesaler has addditional costs that a single store or location wouldn’t have. They have to have warehousing, repacking and reship the product to the final destination. They also have to have merchandising teams to service these accounts all across the country. So for example a wholesaler will get a larger discount than a single individual store.

          • I wouldn’t say that the indie couldn’t sell at a loss because of their cost structure. It would be because they don’t have the scale or volume of revenue to absorb a continued loss like a WalMart or Amazon or any big store.

            • And I’d say cost structure is a partial function of scale and volume of revenue.

              Two different businesses are selling the same product.

              • But the only determination factor in how long they could sell at a loss or cost basis would be based on if they had other revenue to offset the loss. Or if their pockets are deep enough to sustain a loss while others couldn’t.

                In ebooks google or Apple would do this frequently as well before agency.

                • Revenue and costs both work to allow them to deal with loss leaders. Neither alone tells us anything.

                • the only determining factor is what they paid for the book and what they’re selling it for. They do not gain anything by having a more efficient operation.

                • the only determining factor is what they paid for the book and what they’re selling it for. They do not gain anything by having a more efficient operation.

                  That’s how we determine if it is sold below cost. The cost structure then tells them how much they can afford to lose. This would include both revenue and costs.

                  But, in another post I made today, that is somewhere here, I raise the question of what you mean by “cost.” It seems it may be something other than what the retailer pays the supplier.

                  When I use the word “cost” in this context, I mean the money the retailer gives the supplier to secure ownership of the physical goods, or the right to retail digital goods.]

                • That definition is fine. I was saying cost of goods sold is the price that they account, whether retailer or distributor pays the manufacturer for the product. So in this case, it’s the list price less a specified percentage discount from the list price.

          • Keep in mind that the KU data doesn’t include major publisher books from big 5 publishers since they don’t participate in KU.

            How do we know page monitoring is limited to KU?

            But when you’re dealing with books it’s a little different since there are hundreds of thousands of them that are available. Nobody is going to like every book.

            Sure there are lots of books. And there are lots of items in Walmart. retailers still want their customers to find satisfaction in their purchases.

    • Admittedly, I’m old school. I “grew up” writing for big publishers and selling bookstores and Walmarts and all those wonderful places we used to find books. I can’t imagine a world where children can’t enjoy the excitement of going to a bookstore to choose the books they want to add to a library of their own.

      These days, even libraries are almost entirely bereft of books, and it’s like they’ve taken away a piece of my heart. I want bookstores and libraries to survive. It would be lovely if big publishers could make it happen. But I fear I see the POD writing on the wall. Bookstores may become the havens of the rich and libraries will charge admission as museums. But there will always be books, somehow, although I’m not sure B&N is capable of managing it.

      • I don’t think we will ever see print books become only POD. Publishers that are paying large advanced for books need big print runs and sales to cover those advances.

        • eReader technology appears to be holding back progress in migrating nonfiction to eBook.

          Fiction and simple narrative is easy. It’s just a flow of words. But anything with diagrams, graphs, calculations, tables, pictures, etc. is awful on the eReaders.

          There are lots of things an eReader could do to make an eBook superior to paper, but I suspect copyright law holds it back.

          I read all nonfiction on paper, all fiction on paper, and buy both from Amazon..

      • I’m not sure where you live, that the libraries are almost bereft of books, but that doesn’t comport with what I’ve observed anywhere.

  5. They’ve “had to figure out another way to compete” for a number of years. I haven’t seen anything from B&N but a version of “la-la, let’s keep doing everything the way we’ve always done it and see if anything changes.” A sure recipe for bankruptcy, insanity, or a combination of both.

    I’ll stake my money on new growing things in the shadows.

    • They have been testing new concept stores and are waiting to see how they are performing. They also have long term leases to deal with before they could shrink down the size of a store, if that was an option they were considering. Keep in mind that a typical B&N Store carries far more books than the 11 Amazon stores. I’ve been to the Amazon stores in the NYC and the selection is very small.

      • Our local B&N has about five shelves of books, except for the children’s section, which has maybe four more. Most of the books aren’t worth bothering with (whatever the manager considers is the “right” thing to stock).

        They have loads of imported, cheaply made crap, three shelves of magazines, and a cafe thing that is almost always empty. No one there ever has any merchandise they’ve purchased, they’re just drinking coffee and using the free Wifi.

        It takes about five minutes for the clerks to check out the person ahead of me, and they only have two items. Then you get bombarded about buying a customer discount card.

        There are ways to break leases. Ways to see if a concept is working without having to wait months, even years.

        No one here cares about your opinion, but when you state it as absolute, solid facts, expect to be called on it.

        • You don’t have to care about my opinion just like I don’t have to care about yours. But if you think that the CEO of a publishing company doesn’t have a grasp of publishing facts; I can assure you that you’re wrong. We publish 750 books a year. Over 200 of those are eBook/pod only. The others are mass, hard and trade. I’ve been in the printing and publishing business for 40 years now so I do have some knowledge of this business. You don’t have to appreciate that. Thank you for being so open minded to learn from someone who does understand this business.

        • BTW I’d like to see a picture of your local BN that only had five shelves of non children’s books. You know that’s not true. Maybe they don’t carry your book but I’m sure they have over 100 shelves of books.

      • If Barnes and IgNoble is “suffering because of competition from Amazon” it is because they never bothered to TRY.

        I had an over-3000-eBook library with Fictionwise. It could be searched by title and author and I could download the books to my PC without any special software other than my browser, and move the books onto my Palm and later my phone.

        When B&I bought Fictionwise and used their technology as a basis for their Nook reader, they left all of the above out. The library wasn’t searchable, could barely handle downloads to my PC without going through 20-30 pages of list, and the “Nook for PC” can’t be called inconvenient garbage without paying it a compliment. It could barely find or download one book, if it worked at all.

        B&I later killed direct downloads. That was the final straw. I haven’t been a B&I customer for years and probably never will be at this rate. B&I is committing suicide. Amazon has nothing to do with their woes.

        • It’s not just BN. It’s all book retailers who get hurt when books are sold at a price they can’t compete with any longer. Selling print books at, near or below cost on new releases makes competition impossible. It’s only print books since most ebooks from bigger publishers are now fixed price on agency.

  6. BTW, B&N just announced a $1,000,000 donation of books to areas hit by Hurricane Harvey, mostly children’s books. Terrible company, right?

    • Well, if you’re too incompetent to sell products, you can always give them away.

      Meanwhile, if my home is ruined and my town is half underwater, I shall be very glad of emergency supplies, and not nearly so glad to receive a package of paper products. Your mileage evidently varies.

      • Really? That is just pathetic. You don’t see a value in a company donating $1,000,000 worth of books to communities that have been devastated; to families that have lost everything they had. And you turn that around to say if you can’t sell them, you might as well give them away? Such arrogance is uncalled for. I’m sure there are plenty of families that will appreciate having books for their kids.

        • As I say, if I’ve just been flooded out of my home, kids’ books are about the last thing I want to receive, because I haven’t got any place to put them and need basic necessities far more. You may think it’s pathetic. That just proves how completely out of touch with reality you are.

          • Not everyone was flooded out of their home. Many people had less damage than others. Stores lost their inventory as did libraries, hosptials and nursing homes. I’m sure some of those people will appreciate the free books even though you wouldn’t.

            • In other words, the people who don’t need free stuff will appreciate the free books, but the people who do need help will have no use for them. Gotcha.

              (By the way: You are praising B&N for giving away kids’ books, and as an example of who might want them, you list nursing homes? Oy gevalt.)

              • Really pathetic. One example listed was children’s books that were being given away. I was also mentioning places that lost books and would be happy to accept donations. If they don’t want them, they won’t take them. No matter what it was a generous move on the part of B&N. But as an apparent B&N hater since you appear to not be a published print author you couldn’t even acknowledge that it was a nice move on their part.

              • Tom, there comes a time when you stop bothering to feed the troll.

                The ADS is strong in that one, and he will never rest until he’s sure he’s gotten the last word. Like him ignoring that B&N’s ‘donation’ is nothing more than a tax write off – in this case of things they couldn’t sell (the candles and towels would have been of more use to those without power, but those things might be selling better.)

                He calls you a B&N hater – While he proves himself an Amazon one. Perhaps he blames Amazon for the problems his own publishing company is facing. What he refuses to see is that a lot more people would be hurt if Amazon closed than when B&N does.

                On a side thought, aren’t we due another report from Data Guy on how ‘badly’ ebooks are selling on Amazon? (I’ve made more these last two months than all of last year. 😉 )

                • I’m sure you have. That’s why you write under the name Anonymous here. If you’re a writer and successful, why wouldn’t you promote your name? And by saying you made more, is that a hundred bucks or a few thousand? It’s great to be able to hide behind a pseudonym here. I don’t do that.

                  Excuse me if you don’t think a $1,000,000 donation of books isn’t valuable. It’s impressive to me. I saw Penguin Random made a huge donation as well. It’s more than most people or companies can do. And as for a tax write off; I guess now you know how B&N does their accounting.

                  I am not an Amazon hater at all. I am a huge believer in them and what they’ve done for publishing. They’ve forced all publishers to ship faster and more accurately and provide a real service for customers when ordering books. And of course, they made the ebook possible. So no, I’m not a hater. They are a big piece of our business and a valuable account. As is B&N and as are several other wholesalers. I’m also a big buyer of many products from Amazon. I enjoy using my Prime shipping and saving time when I can’t shop locally.

    • For which they will receive a hefty tax break, I’m sure. That doesn’t make them smart business people.

      • What’s the difference if they get a tax break? Do you think when amazon builds a new warehouse they’re not getting tax incentives from the town? Or when Trump claimed to keep Carrier here that they didn’t get a tax break?

    • BTW, B&N just announced a $1,000,000 donation of books to areas hit by Hurricane Harvey, mostly children’s books. Terrible company, right?

      Good for them. They deserve recognition and gratitude for that. I’ve noticed an increase in in-kind contributions with these latest hurricanes. Budweiser canning water. My Pillow donating pillows. B&N sending books.

      Kids who lost everything might now have a book. And that would be a bit difficult to do with eBooks.

  7. Oh, altruism in this shape is fine with me. Likely these titles were remaindered, but if not, that’s fine too. B&N will take the tax write off just as any business would, and that’s okay ’cause allowed.

    Your point that the closing of B&N would be awful for writers whose books are in print — well, here’s one writer where it won’t matter a bean. My books through my publisher are in print and e-versions both, and never once have I seen any of my titles in a B&N store. They will not work with small presses and after all these years, I know better than to go into my local B&N, smiling, and ask. Whereas my print titles can be found at some local indie bookstores, fewer than I would like but any gain is great in my eyes.

    There are a great many of us to whom, as authors, B&N’s implosion will have no effect whatsoever.

    • Yes it is true that for most indie authors or authors that just have their books available in POD, B&N won’t carry their books. It’s not worth it to set up an account when they will only sell a handful of books from a very small publisher unfortunately.

      But for every other author that is in traditional print, the demise of B&N would be catastrophic. Borders was bad enough especially for romance authors because Borders was a big supporter of romance.

      • If a single author has a Baker&Taylor or Ingrams account and returnable, non-POD books, then does that increase the chances of B&N dealing with a very small publisher? The indie author still has to pitch the books with a marketing plan, I’m sure, but I am curious about this.

        Steven Zacharius, thank you for chiming in every so often. I like seeing diverse points of view in TPV comments.

        • Thank you Paula. If you are with a publisher that has a relation with Baker and Ingram then it certainly would increase your odds of getting into stores. If it’s genre fiction it will probably only be local stores unless there is a big marketing campaign. If it’s non fiction it would be based on interest from retailers. BN buys from one office although local managers can bring books in. Most larger publishers meet with BN and retailers on a monthly basis to sell the books in.

          Hope that helps a little. Baker and Ingram are demand jobbers. If the indie bookstore or BN for replenishment, needs copies, they will sell them the books. Baker and Ingram also market to libraries.

          • Thank you for such a concise answer, and for taking time out of your busy day to post here.

            A lot of the magic of distribution, I’m guessing, has to do with determining the size of print runs, and exactly how hard to market each title to brick-and-mortar retailers. The accounting involved with processing returns sounds intimidating, but I still think there’s value in getting books on shelves. It’s a point of discovery, at the very least. Whether it’s worth pursuing at all is a topic for someone else to debate.

            Happy Autumnal Equinox. 🙂

  8. As a Nook user, the lovely customer service killed any affection I had for B&N.

    I’ve side-loaded from Day 1, and clearly recall my shock when the took away the “download to computer” button from their website. There I was, having spent $$ on ebooks, and had no way to download them in my preferred method.

    When I reached out to their CSR team, I was told that the button was gone and never coming back. Why didn’t I try reading the books in their nifty app? (Never mind that if I wanted to read ebooks on a computer, I wouldn’t have purchased a Nook)

    So, I’ve since moved on to AZM, where I have to run any ebook purchases through Calibre to convert them to epub before side-loading to the Nook. An extra step, but this process meets my needs.

    Bottom line for me: businesses that want to keep me as a customer need to stay focused on me (the customer). Lose that focus, and you lose me. We’ve all talked about various ways that B&N has fumbled the ball over the years — if they’d stayed focused on how to meet the customers’ needs, then they might have a fighting chance now.

    • I had a Nook Color before I had a Kindle Fire, and I enjoyed it fine. But their UX is just not up to Amazon’s. Pity.

      The nail in the coffin for me was nixing the ability to read on my laptop. I have eye issues and that’s why I like larger screens (Kindle, Chromebook, Laptop) so I can see letters larger. I like that I can use the Kindle app to read on any device I have (iPhone, laptop, Kindles, etc).

      When B&N nixed apps for laptop, they lost me. Done. I found that being contrary to pleasing the customer and making e-reading EASIER. I even called them and got not much of a satisfying answer. I was quite furious.

      Have avoided B&N since. I figured they wanted to constrict readers, not please them.

      (Let’s not even remember how awful their on-site search feature is. I had to use Google to find books on B&N when their searches were useless.)

  9. Interesting discussion and I’d like to add my two cents for whatever it is worth — or not worth.

    First, we must accept the simple fact that economies are always evolving, redefining the very nature of a country’s business. Failure to do so would lead to a stagnant and ultimately failing economy. Buggy whip manufacturers went out of business with the introduction of the automobile. Certain small businesses began to suffer with the introduction of F.W. Woolworths and Sears Roebuck, and those stores saw increased competition from other national chains — WalMart, K-Mart, and Target.

    Our manufacturing based economy gave way to a service oriented economy in the late 70s/early 80s. Manufacturing either automated and killed jobs or moved overseas because America’s cost of living was too great to sustain reasonable prices fo manufacturing clothes, hi-tech gear, and other products in the States. That’s the downside to the result of our own success.

    So it is that online retail is again redefining the American economy, including Amazon and the struggles of brick-and-mortar Barnes and Noble stores. It is most unfortunate, but those are simple facts that we cannot ignore. Steve Zacharius among those who must accept the current paradigm.

    American society is also changing. The loss of the simple front porch on new homes ended serendipitous meetings between neighbors where folks could sit and chat. Today, most neighbors meet briefly as they walk to their mailboxes and many people will tell you they don’t even know their neighbors. Computers provide all kinds of online interaction, but face-to-face social interaction is diminishing as people spend more time in front of computer screens. The same held true as television brought families into their living rooms.

    It this kind of evolution of our economy that contributes to the success of Amazon — it is quick (as Steve Zacharius has pointed out), and it has forced other retailers to equal product delivery times. It is easy — a few clicks and you have a product on its way to your home. It is convenient as you can shop without leaving your home. You don’t even have to get out of bed to place an order!

    Amazon, however, does play by different rules than brick and mortar stores Amazon hasn’t had to pay high district rents for hundreds of shops; it had the advantage of strategically locating warehouses around the country. And, Amazon did not have to worry about interior design, display design, or other features that go into a brick and mortar shop. For years, it didn’t have to charge state taxes and for many years, however it was pricing goods, Amazon did not turn a profit. In fact, I don’t believe investors saw a profit for at least the first ten years of Amazon’s online presence, although I could be wrong on the timeframe. No brick and mortar shop can compete in an environment in which the B&M shop isn’t turning a profit. Just as Wal-Mart and Target cut into the profits of mom and pop shops in small communities, Amazon has had a far greater impact on retail business across our nation and internationally. Jeff Bezos is a mastermind of patience. He understands that by offering discounts, tax-free shopping (now in the past), quick delivery, and a massive inventory, he could build a brand that would be the first place people turn when shopping online. As long as he could keep Amazon alive through investors he could create an online presence that would dwarf the competition — both online and with brick and mortar shops.

    Today, when someone searches online for a product the first place they often look is Amazon.

    Barnes and Noble is fighting to stay alive in this environment and Steve Zacahrus is 100 percent correct that Barnes and Noble must not and cannot go under. It must survive. Personally, I mourn every day since the loss of my beloved Borders, a bookseller that simply outclassed B&N in every respect with its volume of stock and its knowledgeable sales staff. When Borders first arrived in Maryland, I would drive around the Beltway from Virginia just to search their seemingly endless shelves of history, biography, religion, to include Jewish and Islamic studies, and more. Unfortunately, Borders and B&N killed independent booksellers.

    Today, despite living in Fairfax County, one of our nation’s wealthiest and well educated counties — and also extremely well read with military and international diplomats as part of our community — we do not have a single independent new bookshop in the county.

    While e-readers are convenient we lose a great deal through online books. E-readers reduce every book to the same size, the same feel, the same everything. There is no beauty, no craftsmanship, and apart from reading the words of the screen there is no reading experience. Look at a row of individuals staring at e-readers and they look identical.

    A hardcopy, hold in your hand book is more than simply words on a page. If that were not true, e-readers would have supplanted print books and dispatched them all to a dustbin and used bookshops. As a lover of books, a bibliophile, and a voracious reader, reading a book is an experience that encompasses all of my senses. I appreciate the heft of a good biography or history in my hands; I enjoy the weight of the book in my lap: I soak up the fragrance of of the pages of a new book; and I absorb the mustiness of a used book lost in time on the shelves of a bookshop that awaited my discovery of the volume. I appreciate the craftsmanship that goes into binding a book and I rejoice in finding volumes printed on acid-free paper. Curling up on an over-stuffed chair or stretching out on a sofa with a hardcopy book in my hands is one of my all time great pleasures.

    What has this to do with Barnes and Noble? For those who truly love books, shopping in a brick and mortar store allows us to peruse the shelves to find books that otherwise might not come to our attention online. Amazon may suggest certain books and it will push to its customers books that they may enjoy based upon previous purchases, but that is far from being able to wander through stacks of books to find a good read on a subject you had not previously thought you would enjoy or a novel that suddenly catches your eye. B&N staff vary as do the condition of their books. It is a shame, but it is something I’ve noticed. The closest B&N to my home often has books with damage to the dust jackets or crunched bindings. I almost always drive to a farther location where I find the staff more helpful, the books to be in far better condition, and I always find what I’m looking for in the shop that is farther from my home.

    Shopping for books can also be a social experience. During my last visit to the B&N in Fair Lakes, Va, I saw a woman shopping with a hand-carried shopping bin. I jokingly commented to her that I was not as brave for I would surely fill such a bin and go overboard with my purchase and overload my credit card. From that casual comment we began a 20 minute conversation about our love for books made recommendations to each other. During a visit to a bookshop in Cromarty, Scotland this past June the shopkeeper recommended a book that she did not have in stock, but which I found days later in the city of Inverness. Such lovely encounters do not occur online.

    Many years ago, the owner of the Little Professor Bookshop in Great Neck, NY recommended Jack Finny’s wonderful tale, “Time and Again.” I couldn’t put the book down and it became a favorite for my sister and my late mother. I would never have discovered the book had it not been for that interaction. Today, I read mostly histories and biographies. Amazon would not recommend a Jack Finny book to me as I tend not to read novels. On the advice of my sister, however, I am enjoying Diana Gabaldon’s first novel, “Outlander.”

    For those, such as myself, who collect books, first editions are important. Amazon sends what is in stock and gives the customer no choice. In a B&N I can look at several volumes and if the book has been on the market for several weeks as a top seller I can look to see if any are first editions. Brick and mortar shops also bring authors in to meet the customers. True, libraries can do the same, but the purpose of an author’s book tour is to sell books and to meet with fans. Selling books becomes secondary when authors meet fans in a library.

    The condition of a book is also important, especially if it is being given as a gift. Before I ceased buying books on Amazon, I would occasionally return books that arrived damaged. On one occasion I returned two volumes before accepting the third.

    The sad truth is that our economy, just as that of the world’s economy, is undergoing massive changes. Oxford University predicts that almost 50% of all jobs will disappear by 2050. Many will be replaced by new industries and new jobs; some will not. If you want to work in manufacturing one would do well to learn to repair automated systems and robots. Want to work in pharmaceuticals? Be prepared to go into research for pharmacists will also be replaced by automation. E-Scripts already is having an impact on traditional drugstore chains, which largely replaced mom and pop drugstores.

    Online shopping is easy, convenient, and often less expensive. Today, I make a concerted effort to 1) not shop on line and 2) not to patronize big box stores (except for B&N, since it is the only bookshop in our county). One other element of shopping in a brick and mortar business is service. While B&N service may not always be the best, it is far better than the service I receive at Home Depot, Wal-Mart, and Best Buy, stores I no longer go into. I much prefer to give my business to the small business owner where service remains a priority and where I can speak to individuals who have experience and know their products.

    Barnes and Noble is all we have in a county only 20 minutes outside of our Nation’s capitol. I’m stuck with it, but it’s a much better than shopping on Amazon. In the end, brick and mortar shops are going to have to find a way to compete with the big box stores and online shopping. Some already have succeeded. Downtown areas are often being revived as shoppers want the convenience of parking nearby and not have to wander miles through a huge shopping mall for one item.

    That’s my story and I’m sticking to it!!

    • For years, it didn’t have to charge state taxes and for many years, however it was pricing goods, Amazon did not turn a profit.

      Amazon has generated an economic profit for many years. It was the cash flow from operations.

      They chose to use it to build other business lines. Investors didn’t wait for anything. They don’t care about the accounting profit. They made a fortune from stock appreciation.

      Why did the stock go up? Because the cash flow Amazon kept generating and investing resulted in new and successful businesses. The stock price reflects that wealth. Amazon generated wealth for stock holders in the form of ownership of new businesses.

      AWS is often cited when dealing with Amazon. Not too long ago, AWS did not exist. Stockholders didn’t own it because it didn’t exist.

      Now it exists. Who owns it? Stockholders. They now have something they didn’t have before. They have new wealth represented by AWS. Even better, they have additional wealth generated by AWS. With that kind of wealth generation, they don’t give a hoot about the accounting profits.

      Amazon was kept alive because it generated wealth. It did more than stay alive. It thrived. It wasn’t an act of faith by investors. If Bezos hadn’t generated new wealth for them in the form of new businesses, they would have canned him years ago.

    • Oxford University predicts that almost 50% of all jobs will disappear by 2050.

      Could be. In 1900, 42% of the US population was employed in agriculture. Now it is 2%. Lots of jobs disappeared.

  10. Actually, Terrance, Amazon’s quarterly sales since 1998 have been far greater than it’s net income. Amazon does, however control almost 35% of online retail sales, which is remarkably high and it likely will eventually have an even larger market share. I have no problem with Amazon, but choose not to shop online if I can avoid it so i can give my dollars to local businesses. Amazon profits are not consistent, but that is part of Bezos’ long-term strategy for building Amazon. Very commemdable, but difficult for brick and mortar and even other online retailers to compete against. It’s all fair trade and businesses must learn new ways to compete or die. My hope is that Barnes and Noble survives for the reasons I mentioned above. Amazon, in the meantime muist be careful or the day may come when it runs into anti-trust laws.

    • Amazon’s quarterly sales since 1998 have been far greater than it’s net income.

      Sure, and they always will be.

      Amazon, in the meantime must be careful or the day may come when it runs into anti-trust laws.

      We should keep in mind that monopolies are socially undesirable and subject to anti-trust law because the monopolist maximizes profit by curtailing production and raising prices. That harms consumers.

      Being a monopoly is not illegal. Being a monopolist and acting like a profit maximizing monopolist is.

      The problem is that Amazon has done the opposite of the profit maximizing monopolist. It makes more goods available, and at lower prices.

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