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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.

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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.

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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.

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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.)

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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.

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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.

Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty. You can reach Jane by email at jane @ dearauthor dot com

13 Comments

  1. library addict
    Jan 05, 2011 @ 13:25:06

    I hope Borders stays open and not only because I have 10+ books on pre-order. The B&M stores have always been more romance reader friendly than B&N, at least in my experience.

    I don’t like the idea of Amazon or whomever “spying” on people’s reading habits. And as much as I still shop there (though not for ebooks or even print books) I think we all benefit from them having competition.

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  2. library addict
    Jan 05, 2011 @ 13:26:20

    I miss editing. That should be the Borders B&M stores.

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  3. DS
    Jan 05, 2011 @ 13:57:26

    I read the Boston Review article. While I can understand the distress of publishers when faced with changes in the book market, I don’t have a lot of sympathy. One place I worked for from 1986 to 2000 went under due to the failure of the principals to understand that things were changing and adaptation was needed. That business no longer exists.

    When I left I think it was still salvageable but they just kept doing the same things they had always done, but with fewer people, higher costs and less success. That’s a sure path in insolvency.

    Maybe I have seen too many industries fall apart to think that something just as good will not arise from the ashes. Steel, coal, ethanol, downtown retail– I have seen them all fall in my area. And in some cases they find their footing and rise again.

    Clearly publishers need to rethink their strategies. I don’t see how a push back by the publishers could help at all. Its sort of like jousting over the same churned up ground. They need to be more creative than that. From chain book stores to the internet, as a book lover I have benefited from each step of the way. Right now I have more books and a greater variety of books than I could read in a year. And I’m happy about it.

    I have bought online a number of digital books that could not for one reason or another find a publisher. Not uniformly brilliant but none as bad as the Kensington book I read on a cross country flight and marked nearly 50 pages that had errors of usage, formatting or spelling.

    And this probably sounds mean, but I suspect the columnist wouldn’t be nearly as concerned over the satisfaction of a genre fiction lover.

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  4. DS
    Jan 05, 2011 @ 13:59:38

    Ok I miss the edit function. I meant “will rise from the ashes” not “will not rise”

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  5. Jen X
    Jan 05, 2011 @ 20:26:38

    I love Borders. Their Romance section is huge and very well stocked. I do hope they make it.

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  6. nasanta
    Jan 05, 2011 @ 21:12:33

    I hope Borders makes it as well. I really like their weekly coupons, and so aside from Paperbackswap and e-books, that is where I go to while away the time or purchase paperbacks – like today.

    I don’t like the idea of Amazon or B&N or whatever spying on reader habits. I’m not sure I understand the difference between syncing and side-loading. Is syncing like Kindle for PC and side-loading like adding e-books to an iPod via iTunes rather than Kindle for iPhone?

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  7. Rosie Nguy
    Jan 05, 2011 @ 22:08:48

    I hope Borders pushes through as well. For some reason I don’t like B&N that much, so if I ever buy books new I usually go to Borders or Amazon. They have the Borders Rewards programs that I love because they give out free coupons all the time, and so far I’ve gotten 2 free books from them through the Buy 4 Get 1 Free and the end of the year Borders Bucks plus coupons. I always manage to get really good deals. Plus I have 2 books on pre-order from them.

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  8. Christine M.
    Jan 06, 2011 @ 08:18:59

    @nasanta:

    Side loading is when you have to physically connect your device (say the Sony Readers) to your computer to add a book to it. Sony has no means to “reach” in your device to see what’s in it or how far along you’ve read a book.

    Can’t help with a clear definition of syncing but basically I think it’s when your device has a direct connection with the provider (iPad with Apple, Kindle with Amazon) and thus when you update (‘sync’) your device with new books, the provider can ‘see’ what’s happened on your device since the last time you’ve updated it.
    Hopefully if I’ve got it wrong someone will correct me.

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  9. Jane
    Jan 06, 2011 @ 08:56:58

    @nasanta Sideloading is adding books manually, no matter how you do it. On the iPod, you can only sideload books into Bluefire, Txtr, Stanza, and iBooks but not the nook or Kindle App.

    Syncing is when you buy the book direct from the retailer, Amazon or BN, and they store the book for you. When you “delete” the book, you are just archiving it back onto the AMZN or BN server.

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  10. Christine M.
    Jan 06, 2011 @ 12:17:00

    @Jane:

    In other words sideloading is when you “manipulate” a file and syncing is cloud computing?

    ReplyReply

  11. MyLiteraryCoach
    Jan 06, 2011 @ 13:41:13

    @DS:
    Thanks for your comments. Publishers need to look beyond their immediate plight to reconfigure their business. They are connectors between authors and readers.

    I have also seen/worked for publishers with a long tradition of success who could not re-adjust to the major transitions within that mix: changes in reader interest, forms of communication, and so forth. “They just kept doing the same things… That's a sure path in insolvency.” Correct.

    The problem, as I see it, is that the mass market channels (big-box bookstores) are giving way to other ways of getting the information each of us seeks. The bookstores that will continue to thrive are the ones that work on building community.

    The well-known or celebrity author will probably always find a large following. Otherwise, I think the future lies in gathering groups of like-minded persons who sometimes like to read, but certainly likes to share information.

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  12. Pat L.
    Jan 07, 2011 @ 21:54:26

    I love Borders, there is one a few minutes from me and I can really stretch my gift certificates and savings with all their great coupons. It would be so said if they did not make it.

    ReplyReply

  13. Stumbling Over Chaos :: Linkity, plus 2010 Reading Year in Review
    Jan 10, 2011 @ 19:43:30

    [...] news and linkity from Dear Author,  ReadReactReview, Smart Bitches, and Literary [...]

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