DIGITAL BURN: the Remaking of the Independent Bookseller

| | Monday, April 26, 2010

by A. Bitterman, Feb. 2010

But before I let your steam drill beat me down, I’d die with a hammer in my hand, lord, lord. I’d die with a hammer in my hand…

Nearly 20 years ago, publishing companies made a decision to tilt the scales of supply and demand knowing full well that in the process they would devastate the independent bookselling industry for years to come. Maybe even destroy it. The promise of unprecedented profits was too much to ignore.

In order to endorse and sustain the superstore model put forth by companies like Borders and Barnes & Noble, publishers employed a strategy of over-production in order to supply enough books to cover the miles and miles of new book shelves that far exceeded actual customer demand.

To make it work, publishers needed to establish an asymmetric retail environment that would function as a safety net to capture the inevitably large returns that would result from over-supplying the big box stores.
This meant creating a new kind of bargain book market that would not only offer breathtaking discounts on out-of-print remainders but on new books as well, books that were over-printed and were still being sold at the cover price in most of the traditional independent retail outlets.

The coincident emergence of online retailing helped fuel publisher confidence in the new model. Independents were caught in a death grip, wedged between the superstore and the bargain book, an unsustainable position that immediately rendered them old-fashioned, inconvenient, and over-priced in the public’s mind.

Obediently, independent booksellers pitted themselves against the superstore, in many cases because they really thought that was the enemy, but ultimately because they had no choice. How could they assail the real enemy, the publishers - their masters - who supplied them, extended credit to them, sent authors to them?

What was once a legitimate playing field for independent booksellers became a plantation almost overnight. Publishers no longer needed them and if they were to survive it would be by their own sheer grit and determination, nothing more or less. The master looked away while thousands perished.

Between 1993 and 2003, the number of independent book retailers diminished by more than half, and their consumer market share dwindled from 30+% to less than 10%. The downward trend continues, albeit more slowly, accompanied by the sound of fingernails dragging across loose rock.

But there is hope on the horizon for the independent bookseller, and it comes in a strange and perhaps unexpected form - the e-book.

Reflexively, independent booksellers by and large view the digital book as a threat not just to their livelihood but to the legacy of which they perceive themselves a vital part. It is an affront to what they have been fighting for and dying for all along.

Unlike chain stores and online retailers, independent booksellers have a sensual relationship with their product. They like real books - the way they feel, the way they smell, the way they fit in your hand. They like the history that an actual book possesses, even a bad one. A digital book has no inherent sensual value. It is like the difference between going to a baseball game and watching the game day version on your computer. There is no comparison, and the hot dogs will never taste the same.

Nonetheless, independent booksellers should be rooting for electronic media. Their survival may depend on it.

The digital book has rapidly become a source of both profit and high anxiety in recent years for all sectors of the publishing industry. With Google attempting to digitize the universe and e-book platforms multiplying seemingly day-by-day, digital piracy plagues the publishers to the tune of a billion dollars a year.

With that kind of hemorrhaging, publishers can no longer afford to accommodate the price wars they instigated back in the 90’s with printed matter. There is no safety net with digital media. It’s a high wire act with high stakes. And with no net there is no room for error when it comes to the bottom line.

With this in mind, Macmillan Publishers, with the support of their counterparts in “the big six”, recently fired a shot across the bow by fixing prices on their electronic media so that vendors like would no longer be able to slash prices and undercut their competitors. This way, publishers can ensure maximum returns regardless of their distribution outlet.

In response, Amazon issued one of the most brilliantly absurd statements in the history of public relations: “Macmillan has a monopoly over its own titles.” Which is like saying Coke has a monopoly over Coke products, or that Jesus has a monopoly over his disciples. It would be funny if it wasn’t so telling of the sort of delusional thinking that has come into fashion, particularly among online retailers and their consumers, that everything is for the taking and that nothing, including provenance, is above the market.

In any case, while industry insiders spin the Macmillan incident as a shift in power from distributors to content providers, what this really means to traditional booksellers is that publishers are finally feeling the edges of their superstore model and it’s about to bite them in the ass. They’re afraid of the what’s coming. It may have taken 20+ years, but the independent bookseller may yet be rewarded for its tenacity.

As digital media proliferates, the market share for printed material will naturally decrease over time, rendering the superstore model ineffective. It’s already happening, with Borders on life support (and no hope of recovering) and Barnes and Noble trending flat on in-store sales. One can reasonably expect to see Barnes and Noble reining in and streamlining its bricks and mortar operations in the coming years, (boasting efficiency and a new kind of “knowledge & service” that makes their new smaller stores superior to their behemoth ancestors,) and turning its attention more fully to its online retail efforts.

This will open more markets for independents already on the ground. Specialty stores will become more viable. As the weight shifts to the e-book, publishers may well choose to fix prices on printed books as well in order to protect profits in both sectors. This too will help independents gain advantage in what remains of the printed book market.

It’s worth noting here that several countries in Europe have always required fixed pricing on printed books and that the result has been the coexistence of a thriving independent bookselling industry alongside a healthy online and chain store market.

Historically, America has resisted market controls like fixed pricing because, well, it’s unAmerican. Our entire notion of freedom and progress derives from a slavish belief in free markets. We would rather see John Henry die with a hammer in his hand, and hold him up as a hero, than make room for both him and the steam drill. It’s a pathology that constantly pits old against new, and allows us to believe that the future is inevitable in whatever form it takes. We know deep down that this is not really the case because radio didn’t die with the advent of television, nor did home video replace the movie house, and bicycles are still being manufactured.

The notion that digital and printed media are mutually exclusive is a mythology better left alone. What’s really happening now is that e-books are giving new life to the printed word. Fewer and better books will be brought to press. New markets will open as the superstores retract. Small retailers will rise up and in turn provide new opportunities for publishers to really diversify their product in ways not seen for over a decade.

The temptation to engage digital media as the enemy is self-defeating. History need not be repeated. John Henry need not die. For independent booksellers, now is the time for a quiet smile and a pat on the back as publishers are forced to come to terms with the monster in the (big) box.

A. Bitterman
Reading Reptile
328 W. 63rd St.
Kansas City, MO 64113