Can traditional bookstores survive the digital marketplace?
To the Editor:
Bookselling is an industry suffering through the tribulations of digital transformation as e-books and Amazon have upended longstanding business models and put new emphasis on price. Enter the Justice Department and a judge who agreed in a stunning decision last month that five publishers and Apple, a new entrant in the field of bookselling, conspired to fix prices as they tried to constrain a deep-pocketed competitor, Amazon, from controlling the market with unsustainably low prices.
In the meantime, readers had learned that books could be cheap if ordered online, while the nation’s bookstores were becoming showrooms where some consumers browsed then ordered elsewhere, sometimes from their phones right outside (or even inside) the store. Something needed fixing, to be sure. Publishers, hoping to rescue the bookselling infrastructure that had sustained them for decades, needed another new model and looked to Apple to increase competition and level the playing field.
I was an independent bookseller in the early 1990s during the rise of the book “superstore,” so the showrooming phenomenon was nothing new to me. When a superstore moved nearby, customers started “shopping” in our store, browsing, seeking advice, then leaving without making a purchase. Suspicious, we started following them on their beeline to Barnes & Noble, where they inevitably bought the book we had recommended at a discount we couldn’t afford to give. Dispirited, we closed our store. Now Barnes & Noble and all brick-and-mortar bookstores face the same circumstance.
Your local bookstore can’t survive as a showroom. The Justice Department apparently wants you to have cheap book prices above all else. But isn’t there a bigger picture?
We vote at the polls, but also with our wallets. What is the value of the best book you’ve ever read? Can you even put a price on it?
New York, Aug. 12, 2013
The writer is a literary agent.
The end of the traditional bookstore and print books is cause for woe only among those of a certain age. Younger generations will miss them no more than they miss celluloid film stock and vinyl records. Yet video and music are alive and well, and more people than ever are producing artistic and creative content because the barrier to entry is lower than in the past and the means of distributing the content is vastly more efficient.
It will be the same with written expression. Writers will still enjoy creating stories using the written word, and people will still enjoy spending time with a “good book”—regardless of the technology used to consume it.
I am reading “Journey to the Center of the Earth” now on my tablet while visiting Snaefellsnes National Park in Iceland, the very place that inspired Jules Verne to write his classic story. I downloaded the book in seconds the day after arriving here. If the author were still alive, he would be delighted that his works were so easily accessible!
Hellnar, Iceland, Aug. 14, 2013
As both a bookseller and the president of the American Booksellers Association, I would heartily agree that the book industry has seen an astounding digital transformation. What shouldn’t be overlooked is that it’s also witnessing a vibrant renaissance in indie bookselling. Nationwide, sales in independent bookstores are up over the past two years, new stores are opening nationwide and a whole new generation of booksellers is coming to the fore.
While indie booksellers, too, were stunned by the Justice Department’s assault on a legal pricing model for e-books that was resulting in greater consumer choice and lower prices, our focus will be to continue providing readers and book buyers an unparalleled experience for browsing and discovering their next great read. Research bears out that the percentage of those who discover new titles in a physical bookstore far outstrips that of those who learned about a new book online. Algorithms are still a pale substitute for a bookseller’s insight, knowledge and passion.
Our neighborhood bookstores are where customers come to experience firsthand a deeper connection with authors, great writing and their own community.
Austin, Tex., Aug. 14, 2013
The writer is co-owner of BookPeople.
The plight of independent booksellers is yet another example of Joseph Schumpeter’s concept of “creative destruction,” which describes situations in which technological innovation expands the range and affordability of products available to consumers at the expense of traditional suppliers.
Understandably, those threatened by disruptive change bemoan innovative business practices as unfair, evil or even bad for society. The problem with such arguments is that those dislodged by innovation are conflating their own welfare with the marketplace as a whole. In a similar vein, one could also question whether technological progress was bad for farming or just family farmers. Or whether iTunes has been bad for the music industry or just for defunct record stores.
There is a role for traditional practitioners, provided that they restructure to the realities of a smaller base of loyal customers willing to pay higher prices for valued attributes. For example, community-supported agriculture cooperatives and farmers markets serve consumers seeking fresh produce from local farms. And Powell’s City of Books in Portland, Ore., has maintained an evangelistic core of customers enamored of the ambience and expertise of their local bookseller, despite higher prices.
In the price-fixing case against Apple and the publishing industry, the courts have sided with consumers in upholding the inevitable, if selectively painful, laws of creative destruction.
Westport, Conn., Aug. 14, 2013
The writer is an adjunct professor at Columbia Business School.
I agree wholeheartedly with Mr. Bernstein, whose tale is similar to my own. I owned a bookstore in downtown Toronto, but closed it in 2000 because of a combination of big box stores and Amazon.
Amazon’s deep discounting and high volume of sales had the odd effect of making publishers raise the cover price, which made their books even less salable for independents.
The irony is I don’t even know why there’s a need for Amazon when the Internet makes it so easy to go directly to the publisher. Indeed, the agency method recognizes this fact by having the publisher set the price, giving Apple or Amazon a commission.
The agency method proposed by Apple is not illegal. It’s a valid method used by many producers. Apple’s mistake was in approaching the publishers directly. That was improper.
Amazon is anticompetitive and now has near monopoly status. How can the Justice Department believe that it is protecting book buyers when publishers live or die based on Amazon’s purchasing decisions?
Give me Apple any day.
Toronto, Aug. 14, 2013
As a lifetime voracious reader, I consider the hours spent browsing in independent bookstores to be among my favorite activities. I have amazing memories of the sensory delight of the Strand (New York), the Tattered Cover (Denver), BookPeople (Austin), Powell’s (Portland), and my favorite local bookstore, Elliott Bay Book Company (Seattle). These are places to lay your hands on the books, to savor them, to read the back cover, to listen to authors speak, to talk to other readers and to get spot on recommendations from the amazingly well-read booksellers.
I would consider it a tragedy if the unique pleasure of buying books were reduced to downloading digital e-books or buying cheaply from superstores or warehouses.
In support of readers everywhere, I deliberately flip the “showrooming” phenomenon on its head: I troll around the Web and then I purchase the book at my local bookstore. If it isn’t in stock, the shop will order it for me.
Yes, it costs a bit more for each book, but the vast pleasures and satisfaction of having a fantastic local bookstore in my town is well worth the extra cost.
Seattle, Aug. 14, 2013
The Writer Responds
I won’t argue with Mr. Sherman’s take on creative destruction, but the concept, with its origin in the writings of Karl Marx, does not portend a triumphant finale for capitalism. I will counter Mr. Sherman by suggesting that technological progress may indeed have been bad for farming and not just family farmers, given the deleterious health and environmental effects of industrial food.
If there are bright spots for independent bookstores, as Mr. Bercu, who co-owns one of the great ones, points out, it is very good news, because publishing, like the ecosystem, requires diversity to flourish. There’s room for everyone, but market manipulation tends to come from gamblers and speculators with not much interest in the product itself, just the money that can be made from it. Bubbles form, stuff happens and the Justice Department goes after publishers?
I applaud the technology that allows Mr. Brisco to instantly download a Jules Verne classic in his native language while visiting a foreign country. It’s amazing, but I hope he ends up talking to his travel companions about what he’s reading rather than how cheap and easy it was to obtain, which seems to be the conversation right now.
Because the process and the people that have, over the years, reliably brought to our attention an astounding number of important works of literature, scholarship, information and amusement—in book form—are priceless.
New York, Aug. 15, 2013
Note from KBJ: Amazon.com is the best thing ever to happen to readers, music lovers, and movie lovers. If you can't compete with Amazon.com, get out of the business.