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Barnes & Noble is Dead, And Len Riggio Killed it

If you waterboard a Book People you might be able to get them to discuss what might happen _if_ Barnes & Noble goes bankrupt: it will be bad for old guard publishers.

What you won’t hear them say is that the current trend toward digital is going to make B&N obsolete as a bookseller (instead, they’ll assume  static system), or that the current mismanagement renders any discussion of B&N’s future moot.

The Book People at Publishers Weekly, for example, continue to ignore the writing on the wall, instead reporting:

During its annual meeting held Tuesday morning at its flagship store in New York City, Barnes & Noble chairman Len Riggio supported its new CEO, Demos Parneros who was named to his current role in April.

During the meeting, Riggio called Parneros "the perfect fit" to help the company grow its top line and improve profits. Observing that Parneros "has brought lots of energy to the company," Riggio said he is looking forward to watching the executive over the next few years, noting that Parneros shares his vision and will revive B&N "store by store."

The thing about Parneros is that in his first quarter at the head of B&N, revenues fell by 6.6%. That is not entirely his fault, but his plans for turning around Barnes & Noble amounted to six paragraphs of buzzword bingo. This does not inspire confidence in the man, and that should make you wonder why Riggio is so certain about Parneros ability to help B&N rise from the ashes.

Riggio chose, and then fired, the last two Barnes & Noble CEOs, and when that post was vacant he twice held the position of CEO. The company lost money under his leadership, and it also lost value – the stock price dropped from over $17 a share (when Riggio sold stock in 2014) to $7.30 a share today.

And yet in spite of the declining value, B&N continues to pay out a dividend of fifteen cents a share each quarter. As the Motley Fool notes, B&N is using a lot of its profit to pay that dividend – this, at a time when revenues continue to fall.

That is not a pattern to inspire confidence in B&N’s future. No, what it looks like is the senior management is buying off the major investors, a group that not so coincidentally includes Len Riggio.

Riggio is running B&N into the ground, and he is paying himself a bonus while he does it.

image by MikeKalasnik

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Syn September 20, 2017 um 1:24 am

If they want to save B&N, they need to understand whats wrong with it. They can’t-do that when they are in denial that print is dying and customer policies matter. B&N Squandered their nook customers with an awful product and the worst customer service and policies that saved them a buck yesterday but lost them a customer today. Until they address their issues, they aren’t going to save this dying dino. And they can’t blame (Book people this is for you too) Amazon because B&N ran such a sh*ty company.

RL September 20, 2017 um 9:36 am

I think that they have no direction, and in part it is due to having leadership that does not listen to the customer. They need to have some leadership that understands technology and their competition (Kobo, Amazon)as well.

Marion Gropen September 20, 2017 um 11:00 am

Print is still 75% of all publishing sales, including indie sales. It’s holding steady, and may be increasing.

What’s dying is brick and mortar retailing, and it’s hitting booksellers early and hard. Of course, those indies who do fiction don’t need to care, but the ones that do non-fiction are getting hit by this, just like traditional publishers are.

And let’s not forget that we’re losing the last major counterweight to Amazon’s ownership of access to our readers. Remembering that Amazon doesn’t need any and all book sales, I don’t think that’s good news for anyone.

BDR September 20, 2017 um 1:38 pm

Before Amazon, readers read what bookstores carried and bookstores carried what Big Publishing told them to carry. Independent author publishing was called vanity publishing and was nothing but a scam.

In the (apparently to you) "good old days", getting published was nothing but a crapshoot while the Big 6 deciding their fate wiled away their days with two-martini expense-account lunches.

THEN Amazon happened. Suddenly, readers discovered a *vast* number of alternatives; multiplied exponentially because now ANYONE could publish, profit and entertain others. The Big 6 became the Big 5. And dying. In fact, like a headless snake which continues writhing, they’re already dead; they just don’t know it yet. All thanks to Amazon.

So, Friend, tell me AGAIN how "evil" Amazon is. Yours is an ignorant comment. I’d be embarrassed by it, were I you.

Marion Gropen September 20, 2017 um 2:28 pm

Bookstores bought what publishers told them to buy? If only. But yes, the assortment and variety available have vastly increased. And Amazon’s primacy was well earned.

It’s just also dangerous to its vendors (aka author-publishers and other publishers).

Nate Hoffelder September 20, 2017 um 2:23 pm

That stat is misleading.

It keeps everyone from seeing trends like nonfiction sales evaporating into the ether as people turn to other digital sources to learn stuff.

It also glosses over the fact that some niches have gone overwhelmingly digital:

I think could be worth another post.

Marion Gropen September 20, 2017 um 2:30 pm

I agree with both of your points above. I don’t know whether book publishers will still be around in 30 years, but I would lay long odds that they are still strong in 5, and probably for 10.

Will Entrekin September 20, 2017 um 12:19 pm

"Print is still 75% of all publishing sales, including indie sales. It’s holding steady, and may be increasing."

Do you have a cite for this that isn’t AAP or Bowker? That seems suspiciously like it could be either self-reported by publishers or based on ISBNs. Just thinking, last I heard, Amazon is the largest/leading book retailer for both print and digital, but there’s really no perfect way to track the latter (AuthorEarnings reports being the closest I’ve seen).

Marion Gropen September 20, 2017 um 1:31 pm

You’re right — it’s AAP and BISG. But Amazon does sell a lot of print, so saying that Amazon is the largest book retailer doesn’t mean that it’s not correct.

Will Entrekin September 20, 2017 um 2:05 pm

Yes, you’re right: Amazon does sell a lot of print. But it also sells a lot of digital, much of which is invisible to AAP/BISG, so you don’t really have the support to make the claim you’re trying to. You can’t say that print is 75% of all publishing sales because there’s no clue what "all publishing sales" is.

Marion Gropen September 20, 2017 um 2:26 pm

You may be right. But a little algebra could solve that problem. If I had the time, I’d do it here, and we’d all figure it out together.

DaveMich September 20, 2017 um 3:10 pm

Amazon sells a lot of print.

They’ve also said, for years, that they sell more digital than they do print. Given how much print they sell, that says a lot.

Will Entrekin September 21, 2017 um 8:08 am

No amount of algebra is going to tell you the numbers Amazon won’t reveal. The AuthorEarnings reports are about as close as can be gotten, and they’re great considering trending over time based on discrete snapshots, but I think even that’s incomplete. Algebra could tell you what all self-reported/ISBN-tracked sales comes out to, but that’s even more incomplete. There are too many indie authors selling a ton of ebooks without ISBNs and not reporting to surveys like AAPs because they’re too busy writing and selling the next one.

Marion Gropen September 21, 2017 um 9:29 am

You can have a pretty good idea that most of the print sales on Amazon come from houses that either report to AAP, or upon which the AAP has a pretty good statistical bead. So you add a fraction for the indie print sales, based upon numbers from Author Earnings, or anywhere else you can find it.

Then you look at Author Earnings for an idea of indie ebooks, and to AAP for an idea about traditional ebooks.

You look at known numbers for brick and mortar stores, and so on. There are a lot of statistical estimating techniques for getting at Amazon sales, including ones for dividing up the numbers that are in their 10k and 10qs.

Take 3 or 4 of the best estimations, average them, and work from those results to get the proportion of print to ebooks, and whether or not the trends are changing.

It’s what industry analysis is all about, a lot of the time. It’s a royal pain in the neck to do, and takes a bunch of time, but if you do it right, you really CAN get a pretty good look at the hidden numbers by triangulating from the ones you can see.

Will Entrekin September 21, 2017 um 12:19 pm

Marion: I’ll believe it when I see it.

Paul September 20, 2017 um 1:51 pm

Maybe their only hope (assuming they still have IT staff who know this), is that Amazon’s patent on one-click shopping is just about to expire. Bring that back and suddenly the Nook stands a slim chance.

On the downside the site is terrible (in terms of buying books) if you have ad blockers turned on, and both Chrome and Safari will be doing that in January by default.

Allen F September 20, 2017 um 3:34 pm

One-click does no good if the rest of the website is 'crap'.

Also, why would they be serving up third-party ads at their store’s website? That makes no sense.

Case in point, I only use the web with ad blocker and NoScript engaged, and I have no problems using Amazon’s website.

Amazon isn’t B&N’s main/current problem – B&N’s actions are …

Paul September 20, 2017 um 3:37 pm

That’s exactly my point. Ad blockers work fine on Amazon’s store but they stop me from buying stuff on the Barnes and Noble store. Hence my belief that its going to cause B&N problems when the new browsers come out.

Syn September 21, 2017 um 3:02 pm

**Amazon’s patent on one-click shopping is just about to expire. Bring that back and suddenly the Nook stands a slim chance.**

This comment actually made me laugh. B&N has way bigger problems than one shop click. When I worked for them, a large number of customers were only shopping at B&N because they didn’t want to see it go out of business but griped and complained about customer service (because of the screw you customer policies), how long it took to get a refund on a physical item (About 3 weeks if your lucky) and that there was no refund on digital books. (Buy a book that shows it is in english but your copy is in spanish. Sucks to be you.)

People were rewarding B&N with pity sales for doing a terrible job. Imagine my surprise when I bought an ebook I hated and went to Amazon to see if I could possibly return it to be met with you may return for any reason within 7 days. One click, no one to call, no questions asked. That was mind-blowing to me as someone that always had to deny B&N customers even when it wasn’t their fault. B&N did not care. They supported Agency model (Another unfriendly customer move)because it made them lazy and not have to compete.

B&N can do whatever they want to try to win sales but what they need to focus on is how to win and keep customers. Without policies that don’t favor the customer, they don’t stand a chance in hell of winning those people back unless Amazon becomes a terrible company and put B&N on equal footing with them.

BDR September 20, 2017 um 2:00 pm

BKS will keep paying its dividend until then can pay it no more because that’s the *only* thing holding the stock price up. Eventually, they won’t be able to and that’s when the end will come.

Their problems are not only declining sales in a declining market, a minuscule presence in epublishing and a ridiculously bad investment in a hardware product line within a stagnant market, it’s a boatload of (basically) almost worthless real estate that’s costing a fortune to maintain.

None of this will ever get better for them; they know it and others know it. The sad fact is, it didn’t *have* to be this way and Indigo in Canada is proof of that. Amazon didn’t kill Barnes & Noble, their own incompetence killed them.

Melissa (My World…in words and pages) September 21, 2017 um 10:09 am

I still buy print. I don’t buy print from B&N. And here’s the reason:

I use to love going to their store and browsing and buying. But then it got to the point I was seeing the same old books. And old, I mean old. The same authors that have been on shelves for years is all I saw there. They didn’t stock anything new that I could or wanted to pick up. This left me very disappointed and eventually not stopping at the store anymore.

This breaks my heart because I love seeing the books and holding them. This was a great way for me to find new books, but they don’t do it anymore.

Also, there are a lot of authors that only sell ebooks because of costs and turnaround. B&N doesn’t sell all over the world as easily (from what I’ve seen through overseas readers) and this pushes people to Amazon.

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