Wednesday Midday Links: Things look dire for Borders
It seems that every year there are reports that Borders is struggling financially; that payments will be late; that new financing must be obtained. Every year, Borders manages to cobble together new financing and new debt agreements to keep the doors open to one of the oldest brick and mortar chains in the US and the second largest book retailer in the US. This year, however, it seems particularly grim. On December 31, 2010, news leaked that Borders would be delaying payments to big name publishers because of a liquidity problems. Yesterday, Publishers Weekly reported that Borders was meeting with publishers to work out a new deal with promises of a new financial source but that Barnes & Noble wasn’t happy about this.
“We think the playing field should be even,” the B&N statement says. “We expect publishers to offer same terms to all other booksellers, including Barnes & Noble and independent booksellers. We fully expect publisher's will require Borders to pay their bills on the same basis upon which all other booksellers pay theirs. Any changes in publishers terms should be made available to all.”
The special deal between Borders and the major publishers could be subject to a collusion charge. Is Borders saveable? I think everyone in publishing is hopeful that it is. For romance books, Borders can represent between 5-30% of an author’s print run. (Print runs being based on orders from wholesalers and retailers). If Borders goes under, this will result in a serious contraction in the market. Some of the loss may be replaced by shoppers moving to Barnes and Noble. Some of the loss may be recouped in the move to digital sales. Some may just be a loss.
I’ve read that there might be as many three to five million readers were activated during the Christmas holiday. That figure must not include the wifi only versions as there is no “activation” for those devices. This has led to an increase in the number of digital books purchased. According to USA Today, tomorrow’s list will herald a first in digital publishing:
E-book versions of the top six books outsold the print versions last week. And of the top 50, 19 had higher e-book than print sales.
Onnesha Roychoudhuri published a piece for the Boston Review on how Amazon is turning books into widgets and this isn’t good for anyone, least of all the reader.
What happens when an industry concerned with the production of culture is beholden to a company with the sole goal of underselling competitors? Amazon is indisputably the king of books, but the issue remains, as Charlie Winton, CEO of the independent publisher Counterpoint Press puts it, "what kind of king they're going to be." A vital publishing industry must be able take chances with new authors and with books that don't have obvious mass-market appeal. When mega-retailers have all the power in the industry, consumers benefit from low prices, but the effect on the future of literature-‘on what books can be published successfully-‘is far more in doubt.
Having said all this dire news, the fact is that until the Borders debacle, I think many people felt good about the publishing market. According to this report at Publishers Marketplace (paid link), there was no real drop in hardcover sales:
In format sales, despite publishers concerns’ over protecting hardcover sales–and price points–from encroachment electronically, hardcover unit sales were almost flat, declining by less than 1.4 percent. Trade paperback sales declined by 2.9 percent, with the biggest loss in mass market paperbacks, which fell by 13 percent. (The elimination of hundreds of mall-based stores by B. Dalton/Barnes & Noble and Waldenbooks/Borders by the end of 2009 likely had an outsized impact on this segment.)
Digital Book World is coming up soon. It is a conference about digital books for publishers. It’s a place where they talk about the importance of DRM, or at least that was the tone last year. In other words, it is very pro publisher which isn’t necessarily anti reader but publishers have a different perspective and objectives, obviously, than we readers. A couple of companies performed an agent survey about ebooks and it includes belief that ebook royalties must go up and that almost a third of agents are intrigued by setting up their own ebook publishing firm. I’m not sure how ebook royalties can increase if ebooks become the primary source of revenue for books and advances still exist. High ebook royalties (greater than 50%) in a no advance setting instead of ebooks as a secondary, supplementary source of revenue seems to be setting up a publisher for a loss. It might make sense in terms of backlist titles, though.
NPR follows up on an EFF ongoing story about reader privacy. Your ereading habits are being observed by the vendors.
Most e-readers, like Amazon’s Kindle, have an antenna that lets users instantly download new books. But the technology also makes it possible for the device to transmit information back to the manufacturer.
“They know how fast you read because you have to click to turn the page,” says Cindy Cohn, legal director at the nonprofit Electronic Frontier Foundation. “It knows if you skip to the end to read how it turns out.”
I think this only applies to those books you buy from the retailer that have the sync feature. I don’t believe this type of “watching” occurs when you sideload a book.