If Barnes & Noble Goes Out of Business, Would Anyone Care?

2987827908_b8a4808c02_bThe New Republic is concerned that the death of B&N could have odd and unpleasant side effects on publishing.  While other retailers would take up the slack in terms of sales, they would not provide the early volume of orders that some publishers have come to rely upon:

... Even on the brink of closing, Barnes & Noble still accounts for as much as 30 percent of all sales for some publishing houses.

But the focus on sales masks the deeper degree to which the publishing industry relies on Barnes & Noble. The retailer provides much of the up-front cash publishers need to survive, in the form of initial orders. Most independent bookstores can’t afford to buy many books in advance; a single carton of 24 books would represent a large order. Amazon also buys few books in advance, preferring to let supplies run down so as to prompt online shoppers to “add to cart” because there are “only five left in stock.”

Barnes & Noble, by contrast, often takes very large initial orders. For books it believes will fly off the shelves, initials can reach the mid-five figures—hundreds of thousands of dollars that go to the publisher before a single book is even sold. That money, in turn, allows publishers to run ads in magazines and on Facebook, send authors on book tours, and pay for publicists. Without Barnes & Noble, it would become much harder for publishers to turn books into best-sellers.

Basically the one-percenters are concerned that Barnes & Noble won't be there to finance their business (although I'm not sure why they'd care; big orders mean big returns).

Boo-hoo. They'll have to find a new sugar daddy.

And as for the predicted consequences:

In a world without Barnes & Noble, risk-averse publishers will double down on celebrity authors and surefire hits. Literary writers without proven sales records will have difficulty getting published, as will young, debut novelists. The most literary of novels will be shunted to smaller publishers. Some will probably never be published at all. And rigorous nonfiction books, which often require extensive research and travel, will have a tough time finding a publisher with the capital to fund such efforts.

That reads to me like someone took a list of existing roadblocks which keep authors from getting published and concluded that they would continue to exist after the death of B&N.

Roadblocks are bad, yes, but I don't see they would be a reason to fear the demise of B&N.

Do you?

image by Sue Hasker

About Nate Hoffelder (11591 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

20 Comments on If Barnes & Noble Goes Out of Business, Would Anyone Care?

  1. The very last paragraph of the New Republic article honestly made me giggle.

  2. Nope.
    Couldn’t care less.
    There isn’t a B&N anywhere within driving distance of me.
    There used to be a couple of Borders but the same BPHs now fretting over B&N blocked all attempts by the mall operators to keep them open.

    On second thought: if the New Republic is right, I’ll cheer B&N rinse through chapter 11.

  3. Literary fiction is not frequently sold in BN stores. Funny enough it’s easier to find them in indie bookstores and on amazon. And “rigorous nonfiction books” are not sold at all. If you want a textbook on a subject, you find it in a college bookstore or most likely on… you guessed it… amazon.

    The article finishes with “Without Barnes & Noble, we’ll be adrift in a sea of pulp.” BN almost exclusively sells pulp fiction. The only notable exception are there quite nice reprints of classics.

    I don’t think that the sky will fall.

  4. I wonder if Authors United will back down if B&N falls.

  5. I would lament the demise of B&N. We are already beginning to see the effects of Amazon’s dominance of the book industry, and there have been complaints about changes Amazon has implemented or suddenly rigorously enforced.

  6. It’s pretty much a non-issue, really. About the only thing dragging B&N down is its lackluster Nook division. If it finishes dumping the Nook, there’s no reason B&N shouldn’t be able to survive. Whether you buy “digital fatigue” or not, a lot of people still do like reading print books, and there’s still a place for print bookstores—their business model is not played out like record stores’ was. If B&N should go under, someone else will move in to fill the vacant ecological niche.

    • Actually, it is their business model that is killing them. Not so much the “selling books at B&M” part but rather the “stock tons of books more or less at random to see if any sell”.
      The “tons of books” side means the big stores and big stores need big customer bases to support them. That means that, outside of a handful of big metro areas, customers need to want to drive large distances to get to a B&N store. It is happening less frequently and will continue to happen less frequently.
      The “see if any sell” is also problematic because of the returns system; it disincentivizes B&N from investing in actual market research to know what customers want before ordering. This lack of market insight is why they need big stores and leads to product churn which increases costs.
      I’ve long held that the long term model bookstore chain will be like Payless–lots of storefronts all over–or the old B. DALTON’S stores: small, with a mix of new releases, perennial sellers, and local interest content based on actual data and demographics, all backed by an efficient “special order” system capable of 1-day or better delivery of a deep catalog.

      Does that sound at all familiar?
      Because we all know who is building stores like that, right?

      B&M bookselling ala B&N is a Pareto-like business where the bulk of their income comes from a very small fraction of their catalog and the bulk of their costs comes from the slow sellers, yet they don’t know upfront what will or not sell. They just guess and stock, based on their “experience”, biases, and most particularly, the payola fees. Take away payola and B&N goes chapter 11 tomorrow.

      That is not, btw, going out of business.
      Chapter 11, though, will force them to retool their business and get out of the leases killing them. At that point they will have to choice of either sticking with the “cathedral of literature” pretense and closing vast numbers of stores, shrinking down to 50-100 big metro areas sites, or shrinking the stores to a size the local pbook buyers can support.

      The longer they delay this restructuring the bigger the damage will be and the smaller the resultant “New B&N” will be.

      See, the thing is, unlike the tradpub establishment’s fearmongering, the choice isn’t really Classic B&N or nothing. Rather it is what kind of B&N survives and whether it remains primarily a bookstore or becones a “lifestyle products” chain that carries books.

      Five years from now there will without question be a national chain of small B&M bookstores that is efficient, effective, and profitable. What is in question is whether it will be called B&N or AmazonBooks.

  7. Amazon may care. They can’t afford to destroy all competition or they might become vulnerable to a monopoly anti-trust case. I recall Microsoft invested in Apple when Apple was at its lowest.

    • Not really.
      Big market share per se is not illegal.
      Second, B&N isn’t the only non-Amazon source of pbooks: there are thousands in the US. And there are enough ADSers to keep many of them afloat.
      Third, US antitrust is about consumer harm: it is going to be hard to prove consumer harm from an efficient vendor selling books cheap. The laws don’t care about competitors, just consumers.

      Now, the FTC might want to apply some other, non-antitrust competition laws but for the most part Amazon is golden there, mostly becsuse of the B&N-led boycott of APub titles.

      There biggest exposure is on the KDP select/KU side, the exclusivity requirement, but that is a strange enough creature to start with and they way it works it needs a limited catalog to succeed financially. Exclusivity lets the publishers choose what goes in instead of Amazon playing Kingmaker.

      There is a lot of blather going on in tradpub circles about Amazon and antitrust but no action because they know they are safe from any fair and reasonable inquiry. Now the IdiotTrump (single word) has it in for Bezos so he might mount a witch hunt.

      So if tradpub wants antitrust action against Amazon all they have to do is get IdiotTrunp elected.

      Don’t think they are that desperate.

  8. I LOVE PULP; if you like Genre fiction you tend to get ghettoized into the PULP category; But I really would not miss Barnes and Noble. When I was younger there was a store in my neighborhood called Discount Books and Comics, the store was very popular I used to go every Tuesday to check out the new releases in Scifi and Fantasy and my brother would go to get Action/Adventure books (and Comics), and there were always regular customers coming in for new Romances. This was not a sit down and relax store it was crowded dusty (great place to find old books authors you may not have read). This was my go to store better selection than Waldenbooks and B&N. When the owner retired and the store closed my next favorites were Coliseum Books and the Strand but I had to take the train to get there. The only chain bookstore I ever really liked was Borders (which put Coliseum out of business IMO). I now buy my books exclusively on Kindle, I go to B&N to buy magazines and browse book covers (which I miss doing), but I really miss the local stores. I don’t live by a mall and I don’t have a car but I can come home from work and browse Amazon while making dinner. That is what is destroying the Bookstore model, accessiblity. I just miss holding the different books and browsing for the next new favorite. But on Amazon I have found authors I would never had found at a chain bookstore, maybe a local might have carried it, but its doubtful. Sorry if it was long and veered of topic a little.

  9. If B&N stores were still the same stores they were when the chain first expanded, I might be sorry to see them go. If they have a quarter as many books in any given store now as they used to I would be very surprised. Since it’s all games, toys, a coffee shop, and very few books, I think all I’d miss is the coffee shop.

  10. I would miss B&N if it went out of business. It is the only book store close to where I live and have spent many happy hours sitting in the cafe perusing books and magazines. I go there regularly just to browse and see if there is anything new and interesting.

  11. “a single carton of 24 books would represent a large order”

    So how often are these “large” orders of 24 books being placed? Because if 24 books is a large order and they’re not happening at least a couple times a week for each of the big 5 publishers, then it’s hard to imagine how any bookstore makes enough money to pay the rent and keep the light on, not to mention pay employees.

    Or does that 24 book large order refer to the number of copies of a single title? That would make more sense.

    And 1,000 stores buying 24 books each is the same number of books sold as one chain store buying 24,000 to distribute to it’s multiple stores. There’s obviously going to be some economies of scale for processing one order instead of 1,000, but it’s not like the bookselling business has always only been large conglomerates selling to a very small number of large bookstore chains. Adapt or die.

    This reads so much like “in my day we got teleported directly to where ever we wanted to go, how dare they expect us to walk ten miles — up hill both ways!”.

  12. The brick & mortar stores can go as long as the ebook business stays. I’ve had every generation of Nook except the current one.

  13. Yeah, this article is at least 10 years too late. B&N _used to_ have sizable literary sections (fiction, magazines & journals, poetry), but that demise has already occurred.

  14. I have to say, sometimes the publishing industry & B&N remind me of a dinosaur looking up in the sky and seeing an asteroid. Instead of trying to figure out what it can do to survive, it tries to stand where it can’t see the asteroid. B&N has three stores with an Espresso Book Machines. And what does it do with those EBMs? Does it try to provide a way to sell out-of-print or low-volume titles to customers? No, it uses them solely for indie authors who want to print their own books, or those who want a bound copy of an out-of-copyright title for which they have a PDF. It’s operating like a vanity press! Presumably, publishers could have found a way to make some of their titles available as POD books, but they’re not interesting in changing their business model at all.

  15. The key question, if BN goes out of business, will the number of printed books decrease? I happen to think it won’t — and I bet that only a shrinking percentage of books are bought at stores like BN.

    BTW, have you visited a library recently? Besides the book collection, most libraries sell a gigantic load of used books — some probably sell as much as actual bookstores…

  16. I live in a pretty dead town (not small, just dead) – no place to go, nothing to do, mostly farmers & lots of taverns. B&N is the only place where people who have teeth& can read can go. Yes we sit in the cafe browsing, but you always end up buying something. When/if B&N goes it will be really BAD. However having said that we all joke about how they buy 500 of every book & spend the next 2 years trying to sell them. Go Set a Watchman, that huge turkey of a book which got bad reviews- no problem, they bought STACKS of it which set around for ages –untouched. Who are their buyers, children? AND it’s freezing in there; they must waste $1000 a month in wasted energy. So cold you can’t stay very long. AND hillbilly music on the muzak – Really? Incredibly awful. l love books & the cafe but really sloppy management, it’s like nobody’s really trying.

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