Don’t get fooled again

Many of us remember the era of Barnes and Noble’s expansion. The mass discounter, fueled by going public and selling shares, did all the wonderful things that an industry would hope for. They developed mass distribution and produced great spaces that put books on the landscape in many places they never were before and they challenged their independent competitors to get professional. But these benefits were not worth the losses we suffered as an industry.
Publishing was no match for the business thinking and size of Barnes and Noble. The executives at B&N were wide awake and driving hard. Publishing rolled over. It seemed inevitable and in just a couple of years they became the boss. Negotiating with them seemed pointless, they held all the cards and pushed publishing to conduct business in a way that was only responsive to B&N and the landscape they were creating and not a strategy driven by it’s own values, goals and interests.
So a couple of decades go by, and we have the advent of Amazon, meet the new boss, same as the old boss.
And still, I don’t see an industry centered on it’s values, operating with a long term strategy to protect it’s brands and product and their value. I don’t see an industry trying to build a profitable and diverse retail and distribution network. Amazon seems to have the same air of inevitability that Barnes and Noble did. Publishing acts as though Amazon, and before them B&N, are more durable than the book.
Well, not only is B&N fading now and trying to find it’s future and Borders long gone, but there’s also a knock at Amazon’s door …It’s the new boss- ALIBABA.
This company makes Amazon look small.
I hope this will allow publishing to see that our industry must be ours to guide. Retailers will come and go no matter how inevitable and durable they appear. Retailers are to be used and developed by publishing, so let’s stop getting used by the boss.
Don’t get fooled again!

Change it had to come
We knew it all along
We were liberated from the fall that’s all
But the world looks just the same
And history ain’t changed
‘Cause the banners, they all flown in the last war

I’ll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around me
Pick up my guitar and play
Just like yesterday
And I’ll get on my knees and pray
We don’t get fooled again

Meet the new boss
Same as the old boss

Why we need Amazon

We need Amazon in the retail bookselling space. We need the distribution and the database. We need the mega data that comes from so many readers occupying one space. At some point in the lifespan of a book we need Amazon and the other mass retailers to discount too.
There are huge numbers of readers that we can reach in the big boxes and on line. It’s good. It’s essential.
I want to be very clear about this. This is no anti Amazon or anti big box or down with Walmart ideology.
The way to growth is a healthier, more intelligent use of the various means of distribution and pricing strategy.
Our customers are coming to books from all points, geographically, economically and socially.
The strategy of reaching them has to accommodate that. Publishing’s strategy also has to return the most benefit to the industry and all it’s participants.
Let’s maximize our returns. That means start with full price sales.

Books on the landscape

One of the reasons we need to fight for our bricks and mortars stores as part of the bookselling space is to insure that books remain visible. Bookstores are the very best advertisement for books. Seeing others shopping in bookstores, carrying bags from those stores, driving by the stores, meeting friends at the stores, mentioning the book store in conversation, all these are indicators that raise the value of the book and of reading.
If we don’t see bookstores we absorb that they have little value and that reading has little value.
Most industries get this- it’s just true. This is why it makes sense to put your brand into locations with enormous traffic even when the direct returns from some of these locations doesn’t allow for profitability. Seeing makes it real. People covet what they see every day.
If we continue to drive book sales to the internet and off the street we are making books invisible.
One thing has to change. Stop allowing for huge discounts in invisible places.
People want to shop in book stores, they want to browse, they want a bookstore in their neighborhood and community but when so many of the books they really want are so much less expensive on line, they buy them there.
Let’s say you work at Random House- walk out of your office building at the end of the day- look ahead to the east, turn left and look north, turn to the right and look south, and ask yourself how far you would have to walk to find a store that sells what you’ve been working on all day.
Make the retail space profitable and you’ll see books and bookstores everywhere. It’s that simple.

For Book Sellers

I hope to focus on a single vision. A better way of doing business, a way into a healthy profitable bookselling space. The key is to sell books at the price printed on the book.
We must ask the publishing community to stop allowing discounters to discount books when they arrive in print. Truly, the moment a new title goes up on Amazon, it is given a discount, months before it is available.
Booksellers anticipate the coming weeks’ new titles and have many of them awaiting their street date in the receiving room. But our industry allows mass discounters to sell the very best of these at 42% off months before we can put them in front of our customers. The ordinary books are at 25% discount.
This practice is decimating the retail bookselling space.
There is a better way and we are going to create it together.
Discounting is something that publishers can control. Selling to Walmart, Costco, Target and Amazon is a choice and we, the industry, can define the terms. To paraphrase Andrew Wylie, we are not Proctor and Gamble, we are Hermes. Let’s protect our brands, protect our value.
Follow this blog and let’s work together to create a new sensible healthy retail bookselling space.

The Long View

The retail book selling space needs to be robust and diverse.

In order for that to happen we have to work hard to protect our value proposition, the price printed on a new book. We have to stop using discounters which amounts to remaindering our most valuable products months before they are even available. How healthy can the retail space be when months before our best new titles arrive they can be purchased at a 42% discount? 

The short view for the publishers is that we don’t want confrontation, we need to reach the readers and the revenue of our discounters, especially Amazon, and that our authors and agents would never allow the risk involved in taking back control of pricing. We fear that Amazon would take our books off the site or remove the buy button and the sales will disappear, authors will flee and agents won’t do business with us. Ask the authors and they will tell you, ” look ,my contract pays me the same for every sale no matter who sells it at whatever price”.

The long view is far calmer. Books are here forever in some form. As Markus Dohle has said, not for 50 years, not for 100 years but forever. And that means digital too.

Amazon is a threatened space. If it isn’t Alibaba, it will come from everywhere and either we will throw our books, our cultural treasure and the jobs and intelligence and all the rest on the conflagration of discounters to win our readers’ pocketbooks, or we will wake up one day and see the long view.

We aren’t in this for the next 6 or 12 months. We are responsible for books and culture and ideas forever and it is our responsibility to pull our books from discounters. The retail space for books will SNAP back to life and even if Amazon or Walmart in their hubris takes off the books from their site unable to deal with honoring our value proposition, how long can a book site go with the books of Random House Penguin or any our major houses.

Take the long view.

 

 

 

 

 

 

Book Stores in Manhattan and the Publishing world turned upside down.

 

Another great flash came across the consciousness of the people in the book trade recently with a front page article in the New York Times http://www.nytimes.com/2014/03/26/business/media/bookstores-forsake-manhattan-as-rents-surge.html?ref=todayspaper&_r=0 and a long piece in the New Yorker about Amazon.com http://www.newyorker.com/reporting/2014/02/17/140217fa_fact_packer?currentPage=all .

In  some ways,  the  business of books is upside down.

We take our newest most valuable items and sell them at an enormous discount through internet retailers and discount outlets.

We developed a large network of independent professional booksellers and then encouraged chain stores whose goal was to eat their lunch with discounts. They did.

Then we put those discount chains to the fire by aiding and abetting an internet service that out-discounts the discount chains and super stores. One of the chains is gone the other reeling.

The discounter of course would claim that this good for consumers and more efficient but it isn’t.

This discussion has been going on seemingly forever about selling books and what seems to be wrong. One story blames the rent, another the aggressiveness of Amazon, others the demise of reading altogether or the migration of readers to e books. If we look back several decades and reread the stories the culprit was the chain stores.  Some of our most sophisticated essays on the issue such as Andre Schiffrin’s have pointed out the pricing regulations in France and Germany that protected booksellers and suggested that we ought to follow that model.  In those countries selling books at a discount was illegal and allowed a vast and diverse array of bookstores to survive even in big expensive cities like Paris.

The problem is the price but we don’t need legislation, we need leadership. If retailers, even Amazon or Walmart, don’t uphold the price point, you don’t sell to them.

What is broken in the publishing world is the industry’s ability to sustain a diverse growing retail distribution network that maximizes the value it produces. The reason it broke is that the producers, that is the publishers, somehow gave in a long time ago to the notion that it was a good idea to give up control of pricing. Decades ago, as the chain book stores and superstores opened, a siren call of profitability sounded in the halls of publishers.  It isn’t hard to see the value of dealing with a one large well capitalized efficient distributer of your product.

But it was wrong.  It is still wrong.

And by the way, yes my point here is that Publishers should regain pricing control, but it is also wrong for Amazon to continue to step on the throat of publishing companies to give in on terms when it has already achieved so much market share and so damaged an industry by taking its chosen path to growth.  Our values as Americans, as lovers of justice and decency make this repellent to us . Jobs and cultural capital are being destroyed.

In order to protect one’s brand, be it Knopf Hardcovers, or Polo Ralph Lauren, savvy , consistent pricing and good use of distribution channels are key.  The very newest or most highly valued items, be they seats on a plane, or styles that we wear must be priced to uphold value and  this has to be protected by the industry creating the product. But publishing is upside down. Only in books can you buy the newest, the most coveted, the most valuable, at a deep discount.  It isn’t a monopoly it’s the hideous opposite, a monopsony. Amazon, the only buyer, is dictating terms and pricing and coop and sometimes even editorial control. Of course they aren’t the only buyer but the control they exert over the vendors is  indicative of the effect.

It’s as though the leaders of our industry have been in a destructive, abusive relationship for so long they can’t see the way out.

Discounters, and mass distributors,  have their place in the life span of goods and for certain types of merchandise, even some new books, to be sure. Having a tool set that includes Costco, Target, Amazon, Barnes and Noble and Urban Outfitters is essential to publishing and many readers.   But giving these retailers control over pricing has been deadly to the sector of the retail distribution network that is attaining the highest prices and upholding the value of our product industry wide.

Only independents stake a claim every day that a new hardcover book is worth the price that is printed on it. We charge that price and we live by it. To us and to our customers that is the value of a hardcover new release. We uphold the value of our product.  I can’t think of another product or industry that is so destructive to its own value proposition or that of its retailers.

Moreover the lack of diversity in our retail network has sacrificed the diversity of voices that can be heard. Small retailers in every industry give wings to new trends, we break out ideas and incubate the new in niches and protected zones just by virtue of how we operate. In bookselling we are thousands of different owners doing things all a little differently; putting different books on display, reading differently, operating in different areas.

And because we are so diverse, because our experiences and selves are all so different we need to encourage and make a place for all these voices, all our points of view.  That place is at first in thousands of different book shops.

Indies break out books – indies are the space for new and smaller voices- the industry knows this.

Because even in an extremely small bookstore, take for example “3 lives” in the west village, or “The Grolier Poetry Book Shop” in Harvard Square, there is more on offer to a human being than in the screen that is Amazon.  

In Manhattan in particular it’s true that we have very high rents to contend with.   But we also have the most literate book loving city to serve.  And we have a walking  vibrant city life that loves its local shops. Nationwide we have seen a bounce in the past two years for certain segments of book selling and more bookstores are opening. Even in Manhattan this can be true . And if we fixed the pricing problem there would be a steady stream of new shops opening in nooks and crannies  and then even big bold spaces.