Rocket Bomber - business

Nook speculation at this early stage is dangerous, and likely useless

filed under , 7 January 2012, 12:53; byline — Matt Blind

Full Disclosure: Barnes & Noble signs my paychecks, and I own trivial amounts of BKS through a company sponsored 401(k). But I am field management, in stores, and so not privy to corporate secrets past what both you and I can both read in press releases.

So, B&N: in Thursday’s press release they said

“In order to capitalize on the rapid growth of the NOOK digital business, and its favorable leadership position in the expanding market for digital content, the Company has decided to pursue strategic exploratory work to separate the NOOK business.”

and two ‘graphs later

“There can be no assurance that the review of a potential separation of the NOOK digital business will result in a separation. There is no timetable for the review, and the Company does not intend to comment further regarding the review, unless and until a decision is made.”

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of course others have commented; a small sample:

http://news.cnet.com/8301-1023_3-57354321-93/barnes-noble-ceo-were-committed-to-the-nook/
http://dealbook.nytimes.com/2012/01/06/with-nook-plan-barnes-noble-sets-out-possible-shake-up/
http://seekingalpha.com/article/317961-why-barnes-noble-needs-to-keep-the-nook?source=yahoo

##

I think the main thing that prompted the announcement was 1st: full legal disclosure. They are legitimately looking into this, & I’m sure there is an SEC rule that requires them to say so.

But, a decision to “separate” the Nook business could include operating the digital division as a wholly owned subsidiary, spinning off the business [issuing stock in a new Nook company to all current B&N shareholders], selling it outright, or something less revolutionary, like doing some basic math/accounting to list nook as a separate line item in B&N annual reports.

Or nothing. Nothing is an option.

I think the main thing that B&N wanted to accomplish with this announcement was proper consideration. Some props for what they’ve done in 2 short years – A wholescale reevaluation by both pundits and investors in the business. It could be a thinly veiled message direct to Liberty Media, asking them to invest another half billion to buy the whole company outright (or to buy the nook business, unbundled)

At any rate, much like the announcement made that B&N was considering “strategic alternatives” up to and including a sale, which made the news last year.

If you were to ask my opinion, I must demure: that would be too much like investment advice. But I’m not quitting my job as a bookstore manager, or cashing out my 401(k).



Status update: since I haven't posted to rocketbomber.com in a month

filed under , 18 November 2011, 23:24; byline — Matt Blind

I’ve been working quite a while on a bookstore business plan; not only because I think it’d be a nice feature for this blog, BUT ALSO because, hell – I want to run my own damn bookstore. I’d be most pleased to entertain investors in such an endeavour.

But as per usual, I’m making a simple thing more complicated.

Instead of just posting my business plan, I’m going to post a guide — with many, many references and large blocks of previous research — so you [or anyone] can write your own bookstore business plan.

[with the appropriate caveats, not only to protect myself, legally, but also to make sure *your* efforts to fund a bookstore don’t repeat the obvious mistakes, or run into the obvious obstacles]

So I’m looking at 6 case studies: from non-profit book collectives through small storefronts, to landmark bookstores, to regional name-brand booksellers with a strong web presence.

[like I said: making a simple thing more complicated]

I’ll have to work out which chunks of my own business plan are bookstore-slash-retail universal, and such can be reliably copied/referenced by others, and then also outline specific plans for each case study. I also need to write up the appropriate introduction, educating and specifically directing the readers to do their own research and due diligence: even if you use my knowledge base as your own starting point [and constant reference] there is no replacement for getting into the numbers, getting dirty, and coming to your own conclustions.

SO: I’ve a lot of work ahead of me — Work for free, at that, because I’m weird that way.

Alas, there are no work-in-progress posts – or ‘thinking/talking aloud’ in a blog post [unless you count the past 33 months of rethinking the box.]

The final project can be parsed into chunks, but must post all at once – or in very short succession.

##

So the blog ‘radio silence’ is not a reflection of me giving up, but rather, an unfortunate consequence of my doubling-down. More to come, soon.



Engines of Industry

filed under , 5 August 2011, 21:17; byline — Matt Blind

Microsoft was founded by a college dropout — but to be fair, Harvard was the college and Gates was very smart going in.

Apple was founded by a college dropout – though, it should be granted, both Jobs & Woz did summer interships at HP [and other things – look at wikipedia].

Facebook was founded while Zuckerberg was still a student,

Google was founded by students,

Dell Computers was founded by a student,

Yahoo [which was big once, don’t knock it] was founded by students,

and — dare I pull in some old media for you? Len Riggio founded the company that would become bookseller chain Barnes & Noble while still a student at NYU, way back in 1965

So.

Tax breaks to millionaires do not create jobs. Tax breaks to millionaires do not create new companies, whole new industries, whole new product categories, and whole new ways of life.

If one were serious about creating jobs and not just scoring points with one’s political donors, instead of making sure the top marginal tax rates are now and always will be below 25% — one would invest in the brains that create jobs.

Gates dropped out of Harvard but had an excellent education up to that point — Yahoo and Google both were founded by graduate students — Steve Jobs and Steve Wozniak had the advantage of being in right place at the right time, sure [hard to replicate 1976 Silicon Valley] but they also happened to be students in the Silicon Valley, Berkeley for Woz, Homestead High School in Cupertino itself for Jobs.

Instead of tax cuts for the rich that some claim are the job creators, how about we extend a helping hand to those that actually have a proven track record of inventing whole new American industries?

How about we invest in education, and provide a college education to *all* without the massive debt currently required.

How many Apples, Googles, Facebooks, and Dells would have been established if a smart college kid could borrow $100,000 to start up a new company right after she graduates, instead of being forced to borrow that $100K up front just to get through school?

So many missed opportunities. Sure, some companies founded by the smart young kids would fail — this is different how? — but it would be up to them whether or not they could make it work.

For such a small amount of money, we could make sure the kids get into university, and through grad school if they have the talent and the drive. AND THEN these best-and-brightest could assume hundreds of thousands in debt, *not* to pay for school but to create new companies, new industries, and new jobs.

I might suppose that the only reason we don’t provide a free college [and post graduate] education for worthy, qualifying students is because that would make us socialists — dirty, dirty socialists with more free-enterprise startups than we could manage, with more good-paying jobs for college graduates, and a way to enable a whole generation to create, invent, and prosper rather than loading them down with debt that forces them to make compromises and just make do for at least two decades — long enough to burn out their hopes, dreams, and entrepreneurial spirit.

And of course, we’d be able to do that not just for this generation, but the next and the next and the next one, you know, the one that cures cancer, colonizes Mars, and does fabulous things we haven’t even dreamed of yet. All that and a bag of chips, for the in-context-minimal cost of 4-to-6 years for a kid at a university.

It would be like the economic benefit of the 1950s GI Bill but available for all generations and snowballing into perpetuity.

Of course I’m bitter because I worked through school (and asked WAY too much of my parents) and didn’t have the benefit of this myself — but, economically speaking, why are college costs disproportionately borne by students when it costs so little for the government to provide this, and when it means so much to both our culture and our economy?



Numbers and Perspective for B&N's AR

filed under , 21 June 2011, 22:02; byline — Matt Blind

Remember, at RocketBomber.com, We Read Boring Corporate SEC Filings so you don’t have to! [sm]

In addition to this morning’s press release where all these lovely, lovely numbers were glossed, spun, and (barely) referenced, B&N also released the actual numbers. Because they have to. It’s an SEC regulation or something.

Look here: http://forinvestors.barnesandnobleinc.com/edgar.cfm
and then click the link – you can download the pdf or xls file too, if you’d like.

So, choice bits from Barnes & Noble’s recent SEC 8-K filing, top line —

Sales, 52 weeks ended 30 April 2011,
B&N retail: $4.364 Billion
B&N college: $1.776 Billion
bn.com: $ .858 Billion

Big numbers. Actually, it only adds up to $6,998,565,000, not quite the $7 billion in the press release, but we’ll give them a pass on that. Rounding, and all.

CEO William Lynch had additional comments in a conference call following the press release.

Our data indicates that for the sixth consecutive quarter we continued to gain significant market share in the fast emerging eBook and digital newsstand market — faster, in fact, than any other company over that period. Our internal figures corroborated by analyst estimates, indicate we grew our market share of eBooks another 1 to 2 points in Q4. It now represents approximately 26% to 27% of the overall US market for eBooks. … Our overall NOOK business across devices, accessories, and additional content grew to over $250 million in comparable sales across retail at BN.com in Q4. That delivered close to 300% growth versus last year. As mentioned, BN.com’s gross margin gross profit expanded quarter-to-quarter from 9.5% to 13.2%, illustrating the quickly scaling digital content business model. We now sell 3 times as many digital books as all formats of physical books combined on BN.com. [emphasis everyone’s – that last bit is the one quoted & tweeted all over the place, I just put the tags on it to post it in bold]

So, .com reported gross sales of $858 Million — and not all of that is books, but if it were, that is $214 Million for actual, physical books sold online, and $643 Millions-worth of e-books.

Woot. E-books FTW.

Except the retail stores scored $4.3 BILLION — and the college div. $1.7 BILLION — and not all of that is books, but if it were:

Barnes and Noble sells 9 books — actually, lovely physical books — for every e-book.

Yay! Go Team Books!

That’s just dollars, though, and I might as well be casting bones or reading goat entrails — there’s no way to go from these reported numbers to actual unit sales [esp. as some e-books ‘sell’ for nothing!] — but throw enough BILLIONS around and it all seems very impressive.

Some details shine through, though: look at the other statistic Lynch dropped: B&N has more than 25% of the e-book market, and e-book sales [for the year just past, & let’s do the math: $643 (?) Million / $6.999 Billion] is now (up to?) 9% of their business. From zero to hundreds of millions and perhaps 10% of the store, in just under 2 years.

And growing. Actually, as a bookseller this trend should worry me.

B&N reported a loss, attributed to the .com division (expenses of $280 Million offset by merely $75 Million in gross .com profits) (brand new digital devices don’t get pulled out of a hat) and that $205 million dollar shortfall in digital was enough to drag the whole balance sheet down, to the tune of $73 million for the year.

But I personally would call that a good loss, you know, investing in the business and all.

##

This is just from the Q4 Earnings Report, which included year-end numbers; I can’t wait for the actual Annual Report to see if B&N provides any more context or analysis.

DISCLAIMERS:

I’m a book lover, a believer in the intrinsic value of a good editor as it relates to the quality of the finished book products, a proponent of printing as both an art and a craft, and a collector of bound-paper-artefacts — and more-or-less neutral on ebooks, though my other positions make me (by default) a part time anti-e-book activist…

…who also happens to be employed as a retail wage slave by Barnes & Noble. This does not make me predisposed to parrot the company line or even be particularly kind to my employer [as is proven by at least one recent post] but they do sign my paychecks so I have to disclose that fact for the FCC or SEC or both.

I own a very small amount of B&N stock via an outdated 401(k) matching plan that was discontinued, like, 5 years ago; I get the proxy cards but honestly I couldn’t tell you how many shares I own. [I need to transfer whatever-the-amount-is to the same mutual funds as the rest of my 401(k) – thanks for reminding me]

Additionally – the previously-posted boilerplate disclaimer: “No statements made on this blog are meant to constitute, or even masquerade as, legitimate investment advice; any information is provided for entertainment and edification purposes only, and if that doesn’t cover my ass I invite you to claim whatever you like and I’ll be happy to show up in court drunk as a sailor on leave, for as many days in a row as it takes, to make a mockery of you, and your case, and the proceedings in general such that no judge or jury could even imagine that I’d be a credible source for my own name and birthday, let alone investment ‘guidance’. If pressed, I might even be able to produce receipts and character witnesses to prove I’ve been drunk more-or-less continuously since 1996. You do not want to call me on this.”



Amazon and Taxing My Patience

filed under , 1 June 2011, 16:34; byline — Matt Blind

[Please also read the preceding post, Cheaters Prosper]

I’m a bookseller—not a lawyer—and I don’t pretend to know all the ins and outs of tax law, but a couple of Google searches can pull up most of the information you need to know why Amazon should be collecting the tax. I’ll leave you to your own conclusions on why they fight so hard against it.

First up:

http://www.newrules.org/retail/rules/internet-sales-tax-fairness

“In a 1992 decision, Quill v. North Dakota, the U.S. Supreme Court ruled that retailers are exempt from collecting sales taxes in states where they have no physical presence, such as a store, office, or warehouse. (The legal term for this physical presence is ‘nexus.’) Although the case dealt with a catalog mail-order company, the ruling has subsequently been applied to all remote sellers, including online retailers. The Court said that requiring these companies to comply with the varied sales tax rules and regulations of 45 states and some 7,500 different local taxing jurisdictions would burden interstate commerce.

“In its ruling, the Court specifically noted that Congress has the authority to change this policy and could enact legislation requiring all retailers to collect sales taxes without running afoul of the Constitution. ‘Congress,’ the Court declared, ‘is … free to decide whether, when, and to what extent the States may burden interstate mail-order concerns with a duty to collect use taxes.’

“Today, software has largely eliminated the difficulty of calculating and remitting sales taxes for the country’s many state and local jurisdictions. Indeed, Amazon.com, which opposes extending sales tax to online retailers on the grounds that it would be ‘horrendously complicated,’ collects sales taxes nationwide for Target as part of its management of the chain’s online business.”

So, first: the argument presented by mail-order and online retailers against their obligation to collect the tax [19 years ago!] has been made irrelevant by technology.

Second, the Supreme Court took the time to point out Congress could reverse their decision at any time with simple legislation.

Most importantly, though,

“[W]hile remote sellers are not required to collect sales taxes, the tax is still owed by the individual who made the purchase. Individuals are suppose to keep track of these purchases and pay an amount equivalent to the sales tax as a ‘use’ tax on their state tax returns. Few people do, however, and the use tax is almost impossible to enforce, which effectively exempts these purchases.” [emphasis mine]

Hear it again from another source: http://www.nolo.com/legal-encyclopedia/sales-tax-internet-29919.html

“Consumers who live in a state that collects sales tax are technically required to pay the tax to the state even when an Internet retailer doesn’t collect it. When consumers are required to pay tax directly to the state, it is referred to as ‘use’ tax rather than sales tax.

“The only difference between sales and use tax is which person — the seller or the buyer — pays the state. Theoretically, use taxes are just a backup plan to make sure that the state collects revenue on every taxable item that is purchased within its borders.”

And from Wikipedia: http://en.wikipedia.org/wiki/Use_tax

“A use tax is a type of excise tax levied in the United States. It is assessed upon otherwise ‘tax free’ tangible personal property purchased by a resident of the assessing state for use, storage or consumption of goods in that state (not for resale), regardless of where the purchase took place. The use tax is typically assessed at the same rate as the sales tax that would have been owed (if any) had the same goods been purchased in the state of residence. Use tax applies when sales tax has not been charged. Purchases made over the Internet and out-of-state are the most common type of transactions subject to a use tax.” [emphasis in original]

also: http://en.wikipedia.org/wiki/Sales_tax#Enforcement_of_tax_on_remote_sales

“In the United States, every state with a sales tax law has a use tax component in that law applying to purchases from out-of-state mail order, catalog and e-commerce vendors, a category also known as ‘remote sales’. As e-commerce sales have grown in recent years, noncompliance with use tax has had a growing impact on state revenues. The Congressional Budget Office estimated that uncollected use taxes on remote sales in 2003 could be as high as $20.4 billion. Uncollected use tax on remote sales was projected to run as high as $54.8 billion for 2011.” [emphasis mine]

It is not that internet purchases are “tax free” — they’re not. It’s a matter of who collects the tax. If you want to argue that internet purchases shouldn’t be taxed, well, take that up with your elected representatives — but as noted above, this went all the way to the Supreme Court and the ruling came back that tax is still owed even if it is not collected at time of purchase — in both the 1992 case, Quill Corp. v. North Dakota and the earlier 1967 case cited as precedent, National Bellas Hess v. Illinois Department of Revenue, no one was arguing that the tax was not due, only that making out-of-state companies collect the tax constituted an unfair burden. The tax due is not a matter of where the company headquarters is located, or which warehouse it ships from: it’s a matter of where you, the purchaser, live.

When you buy a book from a bookstore, we collect the tax at the register (It’s listed on your receipt). We send a check to local and state governments monthly, and the sales tax revenue is an important part of what keeps your local municipalities running: it would be very hard to make payroll (for say, firefighters and police officers, and to be fair, also the really awful people at the DMV – but they deserve a paycheck too) without this stream of income. If these sales tax revenues weren’t available year-round, your city or county would have to borrow the money, and then wait until April (or later) to pay the loans back, incurring interest and fees that eat into already small budgets.

Amazon’s continued resistance to collecting taxes has nothing to do with the internet being tax free. [in case you missed it: the internet is not tax free]

Amazon doesn’t have to advertise the tax when they list prices — just like they do not currently list shipping costs. They can still sell a 500 page hardcover book for $11.37. They can still beat us on price, and force bookstores into bankruptcy by doing portions of our job better than we ever could. These fundamentals would not be changed if Amazon added one more little line item, between the price they charge and the shipping fees. Amazon would make no less money.

Well, Amazon might make marginally less money. Like, one-millionth less. But it’s still cheaper to pay for lawyers than it would be to actually collect the tax and forever burst the myth that Amazon is tax free.

When I pointed out that Amazon cheats, I was referring to the near-universal [incorrect] perception among shoppers that Amazon “will always be cheaper” by whatever percentage equal to that tax. It is such a widespread belief that I encounter it at the bookstore every day, and I even get “corrected” by well-meaning people on the internet.

When retailers cry foul and ask for equal treatment under the law, we’re not asking that a ‘handicap’ be imposed upon Amazon because we just can’t compete. Almost the exact opposite is true: We’re asking Amazon to stop cheating and play by the same rules. We’re asking Amazon to stop abetting widespread tax fraud. We’re asking Amazon to disclose to their customers the actual costs of purchases, including the tax, and customers’ obligations under the law.

I’m just trying to sell you a book. *I* didn’t come up with the sales tax, I don’t “charge” tax [retailers collect it on your behalf], and Amazon will beat me in most (but not all) cases purely on price whether they also collect the tax or not.

But let’s stop perpetuating the myth that internet purchases are free of tax.
Also, allow me to correct the perception that asking Amazon to do the right thing [morally if not legally — and also the right thing for their customers] is ‘sour grapes’ from grumpy retailers over losing sales to the internet.

I can provide intangibles at the bookstore that Amazon can’t. I’ll compete on that. But I’d appreciate a level playing field without the de facto tax-subsidy that allows Amazon to advertise an additional discount that doesn’t really exist.

##

Full disclosure:

I work full time as a bookseller at Barnes & Noble. I’m a manager at one of their many, many stores.

I’m also an Amazon affiliate, and earn a small sum from linking from my book reviews to the Amazon site. [I’m also signed up for 3 other affilate programs I use on a regular basis, so my relationship with Amazon is not unique.]



Cheaters Prosper

filed under , 27 May 2011, 11:37; byline — Matt Blind

It’s not that I hate Amazon; I shop with Amazon too, on occasion. But I do hate cheaters and it seems like AMZN has gotten a pass for far too long —

Take local sales tax, for example: as a retailer, I have to collect it. As an internet retailer, Amazon should have to collect it too — but they don’t. Please note, your local business do not charge sales tax, they collect it on your behalf to pay for local services, and the salaries of the government employees [your neighbors] who provide those services.

Amazon claims it shouldn’t have to collect these taxes [note: no one is asking Amazon to pay tax, they merely need to collect on your behalf] because it’s not a local company — Why, we’re up here in Washington State, what do you mean local sales tax? — but that’s not the issue:

Amazon’s customers are local — UPS trucks use local roads to deliver Amazon packages [roads maintained by taxes], Amazon’s customers’ kids go to local schools, Amazon’s customers’ civil disturbances are broken up by local police — heck, readers make use of local sewers when they read Amazon’s books [on certain occasions], sewer lines built using local taxes.

Local sales tax isn’t paid by the retailer, it’s paid by you, and your neighbors. Sure, you can opt not to pay tax if you order through Amazon — and Amazon is more than willing to be complicit in the act, as that translates into a 4-11% “discount” [depending on your particular locality] and that is a massive competitive advantage. The states of Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t charge income tax so a majority of the state budget has to come from other sources, like sales tax. (Alaska and New Hampshire also don’t charge a state sales tax, but I’m sure local jurisdictions within those states do.)

Maybe we could move to an honor system, where no retailer has to collect the tax, and you just report your purchases for the year past every April, and you’re on your own coming up with the total tax bill. Then Amazon wouldn’t have to collect sales tax and neither would I and your yearly tax headache [and burden] would be tripled — instead of straight-forward automatic collection at point of sale you’d have to save all receipts, figure out what was bought where [as each muncipality, county, and state have different rates] and reconcile your tax burden on an individual basis for each jurisdiction. Sound like fun?

Here’s the plain, honest truth: Amazon will have to collect sales tax. Even if it takes an Act of Congress and a Supreme Court decision, it’s coming. It’s to Amazon’s advantage to prevaricate and dodge and lie and cheat for as long as they possibly can, though — and negotiate back room deals besides, because the alternative is competing fairly with other retailers on a level playing field — without additional discounts enabled by lies and tax evasion.

Amazon Knows This: and they have already built the website infrastructure necessary to comply with the law — so don’t listen to them if they say it would be “prohibitively expensive” to “radically change” the way they operate. Truth is, they already collect sales tax in 5 states.

A handy explanation is on their web site – and oh, yeah, you don’t want to know what they had to go through to accomodate the agency model for ebooks:

“ Kindle books, subscriptions and active content titles sold by various publishers are subject to sales tax based on the publisher’s state tax reporting obligations and the taxability of digital books in those states. As a result, sales tax for Kindle books sold by the publisher may differ from the sales tax to which you’ve been accustomed for Kindle products.”

And figuring out local sales tax based on the purchaser’s home address would be too hard to figure out. Right…

Amazon doesn’t want to get stuck paying sales tax twice — once at point of sale, and once at point of delivery. And that’s fine; it may in fact take an act of congress to work out how digital delivery of files count in terms of “point of sale” and taxable sales, and to clarify where internet sales of physical goods actually takes place (for tax purposes).

For Amazon, is the point of sale where their web server is located, or the warehouse? — or is the computer screen right in front of you? I think we all know who the customer is, and where they live, and where the sales tax should be going.

See also:
http://www.thestreet.com/story/11052898/1/amazon-sales-tax-the-battle-state-by-state.html
http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States#By_jurisdiction



Bookstores and Bookselling in Graphs, 1992 to 2010, with some other stuff

filed under , 25 May 2011, 19:46; byline — Matt Blind

The US Census Bureau has been reporting retail sales numbers on a monthly basis since January of 1992.
http://www.census.gov/retail/

It’s not just about having the numbers. It’s not even the way the USCB breaks retail down into convenient categories, like books. But if you have the numbers, and a little time (and in my case, sufficient beer to keep the brain lubricated while churning data)
…well, the nice thing is being able to visualize almost 20 years of dynamic change in an industry in a single graph

Please note: while I go back to 1992 because those are the earliest numbers available, 1992 is handy because that’s just before the major chains (B&N and Borders) exploded across the suburbs, with new big box bookstores springing up like mushrooms every week. [Barnes & Noble went from 203 “superstores” in 1993 to a peak of 726 big boxes in 2008; Borders went from just 44 superstores to 515 over the same period.]

Of course book stores were also closing, particularly smaller independents and mall locations. Barnes & Noble was closing B.Daltons by the hundreds annually, closing the last of them in 2009. Borders also closed their smaller outlets, but has been much more confident in the Waldenbooks chain; the recent store closings have all been Borders Superstores (more than 200 of them) — but the surviving Waldenbooks have been left largely intact. (I might be tempted to guess they don’t want to shrink Waldenbooks any further as that would make it more difficult to sell them as a unit)

The first chart tells a story of an industry undergrowing massive growth, doubling from 8.3 Billion to 16.8 Billion in just 12 years; hitting a peak of 17.2 Billion in 2007, before the current recession. The past 5 years seem like a minor blip, or maybe a bit of a plateau before future continued growth.

Maybe you can sense there’s a ‘but’ coming…

Let me adjust for inflation — just an quick calculation using the numbers pulled from http://www.westegg.com/inflation/

After adjusting for inflation, 2005 was a definite peak and book stores are struggling — struggling every month, getting worse year after year.

##

Someone is going to come back with e-books, right? “Well this obviously proves e-books are killing bookstores”

Except that ebooks sales were miniscule until Dec. 2009 – and the much-vaunted Kindle wasn’t even introduced until 2007. The graph shows the decline started the year before.

Was it Amazon? Amazon is a problem, and Amazon sales are certainly growing by billions year after year

but their growth in “Media” is much slower than the growth in overall revenue — and is shrinking as a percentage of total sales over time

I would say those that conflate “Amazon” with “books” and “ebooks” might need to make some mental realignments and redefine their terms: Amazon only makes half their money off of sales of “Media” and only 20% from media sales in the US. Amazon, as a website and as a company, is more than a bookstore.

Oh, Amazon is still eating my lunch: Amazon Media Sales exceeded Trade Book Store sales for the first time in Q3 2010; a feat they matched in Q4.

to produce this one, I had to really work the data – Amazon only reports sales results quarterly, and only breaks down sales by category in their annual reports. Media includes digital downloads (not just e-books, but all that music and even the occasional video) and also includes sales of music, movies, and video games on physical media — you know: discs. I’ve done my level best to tease out Just the Book Sales by comparing Amazon to the overall market and ended up frustrated. My best guess is above.

On the book side, I used the publisher’s reported revenue [http://www.publishers.org] to adjust the monthly Census Bureau retail number — taking the Billions of dollars’ worth of college text books out of the equation. The results are much more striking on a monthly basis [with dramatic reductions in January and August, with a smaller but still noticeable effect on September and December] — matching the Census numbers to Amazon’s quarterly reporting averages out the effect over the whole year.

So, even considering that trade book sales are only half of overall bookstore retail and that Amazon’s sales continue to grow year on year — well,

Amazon is not your local bookstore yet. Their market share of physical books is growing slowly, not explosively, and I might even be able to argue that Amazon’s sales of old-school-paper-books has been mostly flat, growing only modestly, and their market share since 2005 is growing only because book store sales shrank. —oh, a gain is still a gain, and a book sold by Amazon is a lost customer for me, but Amazon is doing nothing special and nothing different from what they did—for books—in 1997.

There is no way for anyone to really know until the economy improves and consumer confidence (and spending) finally gets back to 2007 levels. Ask me again in 5 years.

It also remains to be seen how much ebooks will continue to cannabalize physical book sales, both in stores and online. It is Amazon’s own admission that they sell more e-books than books.

##

The recession didn’t hit until 2008; book store sales began sliding 2 years earlier. Why?

I don’t know, but I have two theories.

First: consumer spending took a hit in 2006 because credit card regulations changed, and suddenly everyone (well, everyone still using credit cards) had to rethink all of their spending. Discretionary purchases (like books) took a hit first.

http://www.dailykos.com/story/2005/08/20/139986/-Your-Credits-The-October-Surprise-2005
http://mooreslore.corante.com/archives/2005/08/21/dating_the_next_recession.php
http://useconomy.about.com/b/2010/05/12/how-2005-bankruptcy-bill-led-to-recession.htm

The other explanation is much harder to swallow, and has implications for the long term health of my industry:

Kids aren’t reading. Well, of course they’re reading but they look at a screen, not a page.

The Consumer Expenditure Survey program [http://www.bls.gov/cex/] consists of two surveys, the Quarterly Interview Survey and the Diary Survey, that provide information on the buying habits of American consumers, including data on their expenditures, income, and consumer unit (families and single consumers) characteristics. The survey data are collected for the Bureau of Labor Statistics by the U.S. Census Bureau.

That top line is total spending on reading, in Billions. Note the downward trend, and note the loss of about $3 Billion over the last 10 years. That’s all you need to know. No need to blame Amazon, or E-books — this is a much larger trend, visible across all age demographics.

It isn’t just that the kids aren’t reading—though they aren’t—much more disturbing is the slope on the next two brackets, the Under 45 and Under 35 sets.

The Bad News: Even ebooks are competing for a shrinking market.

The Good News: Even if all current trends continue: reading is still going to be a $10 Billion Market 10 years from now — and ebooks and the internet are inventing new forms of ‘reading’ and building new markets even as you read this.

It’s not only about competing for readers, but also just competing for eyeballs. Games, movies, online video, blogs, aggregators, and social media — the much bigger market is the Attention Economy: How do we get people to spend time with us, and with our product?

Here is where bookstores have an advantage over Amazon:

people are here in the store using our wifi for hours every day — they come back day after day — some folks only come once a week but they stay all afternoon. Folks coming in for “just a book” only leave hours later. Bookstores are ‘sticky’ in a way that many websites wish they could be. Of course, we provide the chairs and tables, the browsing and atmosphere for free.

How do we monetize this? Can we monetize this? Is there a value for bookstores that has nothing to do with books? Is there value in providing a public space? Can we do more than just sell coffee?

##

I don’t have an answer for this. Or at least, I don’t have a single, definitive answer; I just have a lot of ideas and a lot of questions.

Pessimists will look at the charts posted above and say, obviously the book business is dying. I think it’s more a matter of coming off of an awesome high in the 90s, and rediscovering a business model that is more reasonable or sustainable — or finding a new use for this massive bookstore platform moving forward.

There are about 1500 or so Big Box Bookstores all across the country; more than half are already making the rent, even if we can’t quite please investors with massive profits.

Say only 500 locations are truly worthwhile, and worth keeping open on a self-sustaining basis for the next decade: that’s a hell of a lot of prime real estate that hundreds of thousands of people visit regularly — the longer they’ve been open, the more valuable they are. Bookstores also have a bit of a ‘halo effect’, as we are already associated with learning, knowledge, literacy, culture, and entertainment. Bluntly: We’re known for books, and even if you don’t read them, you know about books.

Apple [The Almighty, can-do-no-wrong APPL] only has 312 stores. Apple has it’s own thing going on; apparently their products key into the same neurons as religious cultists or obsessive hobbyists and hoarders.

But if you were trying to compete with Apple, wouldn’t it be handy to have a retail platform like a bookstore, with free wifi already in place and millions of square feet nationwide and an established brand, and locations your customers already know about, and have already visited in the past?



Perfectly boring little post, nothing to see here, move along...

filed under , 17 May 2011, 22:18; byline — Matt Blind

I’m not going to bother with rumor-launching headlines or search-engine grabbing keywords or stock symbols & name-dropping, and all that tech blog buzz that clogs up most talk of ebooks and devices. This is just a quiet little post — a shared secret between me and my regular readers. You know, I don’t think I’ll even publicize this, past posting it to the blog.

##

It’s rather amazing what one can find on the internet, if you know where to look. I rather enjoy looking at the want ads.

no, not for Atlanta. [Have a job; kinda love it actually — I get to spend 40 hours a week with books. Even the bad stuff is “good” after a fashion as it is continual fodder for blog posts.]

Instead of looking for a new job, I like to look at jobs available in Palo Alto, CA. Did you know Barnes & Noble Digital is based in Palo Alto? [of course you do, I told you myself like a year ago. How quickly we forget…]

So what’s up in Palo Alto?
[note: links below valid as of 9PM EST 17 May 2011 – but these are job listings, and not permanent web pages.]

They’re looking for the usual, scarce talent (in fact, they’re also hiring headhunters…) and in the usual flavours — Android, Flash, Webkit, Bug fixes & OS optimization — past the usual, though, it starts to get really interesting.

Senior Services Delivery Engineer

“The B&N Cloud Services team in Palo Alto has built a brand new set of services which the NOOKcolor device is using for several functions including eBook browsing, searching, and purchasing, as well as social networking features. Bring your skills and experience in data center automation to minimize downtime, improve the code deployment process, and expand automation in all areas.”

Why, I had no idea B&N had a Cloud Services team. What else are we going to find?

Senior Java Cloud Services Developer

“if you are a Java Software Engineer with back end development experience or a Java Senior Server Engineer who has solved complex scalability, performance, and or optimization issues, then this position should interest you! We are working on designing and operating a highly optimized mobile services platform and we are looking for Java server engineers that have a strong background in core platform server development to join the team.”

So Java engineers to work on the servers — but for what?

Business Development Manager, 3rd Party Apps & Services

just wait until you read the job description:

“The primary objective in this role is to manage and grow key business partnerships, especially in the areas of music and video…” and “Contribute to the development and refinement of Barnes & Noble’s strategy around media & digital content.”

And then there’s this listing:

Product Manager, Mobile Clients

“The Product Manager for Mobile Clients is responsible for the product planning and execution throughout the product lifecycle for Barnes & Noble Nook eReader mobile client software. This includes gathering and prioritizing product and customer requirements, defining the product vision, and working closely with the content acquisition teams, product marketing, engineering and customer service to ensure that revenue and customer satisfaction goals are met. The Product Manager’s job also includes ensuring that the product supports the company’s overall strategy and goals.” [emphasis mine]

and

iOS Developer (iphone, objecitve C)

“Join the eReading and eCommerce eVolution. Simply put, building great software is the most important thing we do at BN.com. Whether it’s our eBookstore, our fastest growing product line, offering content on multiple mobile platforms, or continuing to grow our award-winning eCommerce shopping platform, you will personally have the opportunity to build software solutions used by millions of customers. In our NYC and Palo Alto offices, we’re making significant investments to create a world-class team of Software Engineers, Architects, and Technical Leads who will thrive in our solution-focused, collaborative culture.

***We are looking to hire multiple iOS consultants and employees for a major initiative***” [emphasis in original listing]

Oh my, that does sound exciting. That was first posted 13 days ago. [4 May 2011]
edit: or *reposted* at that point in time. Here’s the thing: I can’t find confirmation of the above job posting at the official corporate site so I’m thinking this is an undeleted artefact from at least 30 months ago, before the original B&N iPhone app launched. Note the different tone used, and the reference to “significant investment” rather than to the currently-up-and-running B&N Digital division. Still, the cloud stuff and video content could be cool, even without a new iPad app. [/endnote]

##

The Nook Color won’t be standing still:

Hardware Design Engineer

“Candidate will be responsible for architecture and design of current and next generation B&N e-readers. Engineer will be responsible for schematic of design and choice of key components in conjunction with JDM manufacturer in Asia. Responsible for supervision of pcb layout as well as board level BOM. Definition of all testing and analysis of prototype systems. Work with JDM to bring up and debug system level boards. Work with mechanical designers to define form factor and clearances. Manage JDM regarding support in the areas of layout and signal integrity testing. Work as a team lead or senior designer in a team of 2-3 EE’s per project”

Platform Multimedia Engineer

“Barnes and Noble are searching for world-class software engineers to join the Android platform development team. In your role you will be responsible for the design, implement, and optimize multimedia system software for Barnes and Noble’s NOOKcolor product line leveraging its hardware acceleration and enabling cutting edge digital media use cases in the areas of audio, video, and image playback and capture. Advanced use cases include HD content delivery and playback leveraging streaming video and encryption, video telephony, etc.” [awkward grammar in original listing. Ooo, not so professional — hope they fix that, or fill this position (these positions) soon.]

tantalizing hardware and features aside, I also like the fact that B&N will be paying to make it look good:

Art Director

“The Art Director is responsible for driving the creative vision, direction and development of all visual design assets for Barnes & Noble, Digital Products. This person is responsible for conceptualizing the visual identity of our digital products, as well as ensuring visual and brand consistency across all experiences. The Art Director also manages the Design Team, providing creative direction and hands on support to digital artists, ensuring their workload is manageable and the output is high quality and on brand.”

##

These are just job listings, and reflect expectations & required skill sets: not actual job responsibilities or finished products. I’d be reading a lot into these if I were to extrapolate future hardware or applications just from a handful of classified ads that are likely going to disappear soon anyway.

Oh, but it’s fun to guess.

Here’s one I should probably apply for

Executive Assistant

“Be a part of the digital reading evolution! Since its debut, NOOK and the Barnes & Noble.com eBookstore have received accolade upon accolade from the most well-respected technology and consumer electronic pubs in the industry. We’ve assembled a team of the top thought leaders in Software Architecture, Product Management, Consumer Electronics, Supply Chain and Mobile technology. At NOOK’s epicenter… our growing Palo Alto office has an opportunity for an Executive Administrative Assistant with a track record of success supporting Engineering Executives. In this individual contributor role, based in Palo Alto, CA, you’ll be responsible for supporting the success of 2 engineering executives and their teams.”

—except I’m a book seller, have been for 10 years. I’m probably not qualified ;)



Books are not Music

filed under , 10 May 2011, 22:30; byline — Matt Blind

Start Here:

http://en.wikipedia.org/wiki/Phonograph_cylinder
http://en.wikipedia.org/wiki/Gramophone_record
http://en.wikipedia.org/wiki/Long_play

The playing time of the earliest wax cylinders was only 2 minutes.

As the name implies, the phonograph cylinders were wax and could only be replayed 100 times or so before they had to be replaced. [though worn out cylinders could be “erased” and reused for home recordings]

Later cylinders made of celluoid and phenolic resins like Amberol (you may have heard of a similar material brand-named Bakelite) lasted much longer, and in fact Edison [you know, the guy who invented the damn things] came up with a way to double the information packed on cylinders, so you could listen for all of *4 minutes*. [Whoa, give me a minute, I think I’m getting the vapors]

By the 1920s, a 12” 78 would run 4 and a half minutes. My Goodness. But as always, technology marches on…

So by the 30s you have Columbia introducing the LP — 10 minutes to a side playing at 33½ rpms on 10” discs — and RCA Victor (not wanting to pay licensing fees for Columbia’s patents) introducing the 7” 45 (which ran at 45rpms — hence the name) (* for those of you who have previously heard of 45s, of course)


image credit: Wikimedia commons

The competing formats [which used different spindle sizes and ran at different speeds] shaped the music that was released – and while a number of disc-switching systems were employed to get around size/time limitations, for the most part songs were truncated to the format. The 3-4 minute single is a direct result of the 45. When folks today talk about an EP (~15min, 3-5 songs) or an LP (~40min., the Album of my youth) (or of Albums, for that matter) they use a nomenclature descended from the limitations of grooves in plastic. Wikipedia has a wealth of information on all this minutiae.

The point I would like to make, my major digression before I get to the actual argument I’d like to make in this post, is that consumer music on distributed media in the 88 years between Edison and Rubber Soul was almost exclusively the sale and distribution of singles — a single song, just like 99¢ downloads today. The limits of technology at the time meant an operational upper limit of about 270 seconds. Even prior to discs — before cylinders even, of either wax or plastic — there was printed sheet music, and player piano rolls, which were also largely limited to single songs — and the music business being what it is, of course parties whose profits depended on one model sued the new technology in court: Wikipedia also has an article on the White-Smith ruling. This is a pattern repeated many times and covered at least twice in depth by folks who know more about the issue than I do.

But the rights & formats & changing technology are secondary to the primary economics of consumption: except for a golden period in the late 60s and throughout the 70s [the era from Rubber Soul to MTV] the industry was ALL ABOUT the production of singles and the mass consumption of “hits” — through the 50s, 60s, disco in the 70s, 80s, 90s, and the decade just past: rare indeed was the artist who released an album as a preconceived artistic whole, and so many of those were also supported by the release of singles that it’d be hard to envision an ongoing music industry without them.

Thriller? Seven of it’s nine songs were released as singles, and the stature of the album itself (to say nothing of it’s record-breaking sales) are as much about the success of the singles as in the album’s “concept” — if it has one. Purple Rain? It even has a movie, right? Can’t separate the tracks from the album — except they did, releasing the title track, Let’s Go Crazy, and When Doves Cry (along with two other tracks that no one remembers) as singles — and just like I can’t think of the name of any other track, I doubt anyone except die-hard Prince fans could even hum a few bars without the album playing in the background.

Classic albums, even Dark Side of the Moon, the 1973 masterwork and ur-concept album — the platonic ideal form of the concept album — all have at least one ‘best’ track that ends up as the single. Floyd’s label released both Time and Money from DSotM, likely without consulting the band. [“btw, which one’s Pink?” & the other lyrics from ‘Have a Cigar’ on Wish You Were Here released 2 years later seems the best commentary on that]

So some few albums aside: it’s all about the single. The single is what we want, and even though artists continued to release album-length CDs throughout the 80s & 90s, we only grudgingly bought the whole disc just to get one or two songs we like. For about 20 years, recording industry profits were unfairly inflated as they were charging $8 — then $10, then $15, then $18 — for a pair of singles.

Add onto that as well the large proportion of fans repurchasing their entire collection on CD: 20 and 30 (and 40) year old albums that wouldn’t have sold otherwise that suddenly found new life, and the ability to package even third-tier artists’ output into ‘greatest hit’ collections that would sell. [Even if, once again, all we wanted were the one or two hits.]

##

Many would point to the death of the music chains as a dire premonition for all retailers of packaged entertainment. Oh look, there goes Borders. Watch it, Blockbuster is next.

The advent of downloadable music led to decreased album sales, decreased sales of physical media, the bankruptcy of several chains that sold music [though some individual stores and ‘indy’ music stores seem to be doing OK – many of them by increasing their stock of vinyl!] and in general, much soiling of pants by music industry executives.

*Allow me to call bullshit* : The music industry collapsed because the CD format (and CD pricing) led to an unsustainable bubble built on the $18 price point cited above (for 2 good songs and an hour of dross) and the once-in-a-format buying binge as customers built a “library” — you only re-buy your collection once, though, and once you’ve bought ‘enough’ you fall back to your normal (& typically very sparse) buying habits.

The “rediscovery” of the single by the shopping public made possible by per-track purchases (and the occasional illegal download) supposedly led to the collapse of album sales, but it should come as no surprise that as soon as we could drop the 11 tracks of filler [at an unjustified markup] and just pay for the songs we liked — well, we did so.

(Perhaps many of us downloaded them illegally first — but the whole industry went into transition for a solid 10 years starting in 1999, and one could certainly write a whole book on that. The fact that Apple and Amazon make money off of music proves “piracy”, while real, is not the bugbear the RIAA wants you to think it is.)

I’d argue that the point where we all hit ‘enough’ CDs for our library just happened to coincide with the advent of digital downloads, two trends which both resulted in decreased album sales but also two separate and distinct trends the recording industry unfairly conflated — an assumption which led more or less directly to their present day stupidity like suing fans for liking music, and withdrawing from digital when they should have embraced the new format as firmly as they once did CDs — to the point where they were pushing CDs down our throat. This misstep means they ceded the initiative, and the profits, to Apple — and to Amazon, to a lesser extent. This is ground that they will never make up, and soon the artists [who actually make the music] & the tech companies [who now distribute it] will meet somewhere in the middle and wonder just what the recording industry is for, anyway?

##

One more quick aside: The movie companies suffered from a similar blindness, but also benefited from format changes and the associated bubble as we rushed to build our personal movie collections (something one couldn’t even do in the 70s, unless you owned a film projector) – in fact, the studios got to hit us twice, selling us the same movies on VHS & DVD (and now Blu-ray) and even as ticket sales slump (a trend hidden by ever-increasing ticket prices) they showed improving profits — and developed whole new profit centers.

In some cases, the film libraries are worth more than the current production studios. Movies differ from music in that prior to VHS, there was no collector or home consumer market: you bought the ticket while it was out in theaters and that’s it. Even the occasional broadcast on TV hardly holds a candle to DVD.

So movies finally made their way into a market that music had been developing since 1880. Not surprisingly, there was pent-up demand — in fact, ask any blogger what they want to see on DVD or Blu-ray and even if they blog about business or book retail or manga of all things, I’m sure after some thought said blogger would be able to give you a Top 10 wishlist of things that should be out and available for exorbitant prices but isn’t. Stop worrying about bittorrent, guys. Fire your lawyers and hire archivists — the money is sitting in vaults, on celluloid that is deteriorating as we speak.

##

Anyway.

As stated up top: Books are not Music

CDs can be deconstructed into individual tracks — indeed, the single is the “default” unit of music and CDs are the artificial construct: when given the option, we want CDs broken up so we can buy just the tracks we need. In contrast to music, books have always been a long-form art, and even short stories take a hell of a lot more than 4 minutes to read. [If you can read a short story in 2 minutes, that tells me the author worked and agonized, for weeks or months to write something that short, and you need to go back and read it again. now. I’ll wait.]

Songs are played on the radio, available from our personal libraries, available via streaming services, and otherwise permeate our life, and except for our teens — when we soak up new music like life-giving water [and the once-every-20-years format changes, when we’re forced to repurchase the music of our youth] — actual music purchases are fairly rare.

Books aren’t movies, either, for that matter: Both music and movies are passive entertainment — you can turn on the radio and have it playing in the background while you write, or cruise the web, or study, or make sweet sweet love, or many other tasks that require more of your attention. Similarly, I can put on a DVD and simultaneously cram popcorn in my maw while either drinking beer or letting my hands roam over a willing partner [an activity that usually ends with us missing the last half of the movie, but hey, that’s one more argument for owning the DVD].

Movies and music are passive entertainment; we can sit back and do other things while we enjoy them. Seeing a first run movie in a theater is more engaging than watching videos at home — but I think many of us have noted how many other people manage to text, talk, or tweet their way through a movie [you and I would never do that though] — or have noted with distress the jackhole who thinks he’s MST3K but wittier and who maintains a running commentary through the whole thing. [most of you have a tire iron in your trunk; I’m not advocating violence against jackholes but I thought I’d remind you it’s there]

Books are active and engaging. You don’t read a book while you write blog posts and surf the web. Hopefully you don’t read books while driving – mostly because you can’t, but also because it would be dangerous to try. You might be able to page through a magazine, skimming the ads and reading only the article headlines, while talking with friends or otherwise doing something else but when you sit down to read a book: That is all you are doing: You are reading a book, and it takes up your whole brain.

Sure, you can listen to music while you read and I often do: but the one is just background noise, while the other engages you to the point it crowds out everything else.

You can sell music by the track, and assemble playlists from many disparate sources. You can sell TV series by the episode, and while we occasionally marathon a whole series in a single sitting, it is much more common to take TV shows in half-hour to hour chunks, and to keep at least a half dozen ‘stories’ going at a time, at the rate of one episode a week.

Dickens and his serialized novels aside: when we buy a book we buy the whole damn thing, and read the whole damn thing, and the reading of it takes over our whole imagination — and even in a series consisting of several books we only begrudgingly admit that it takes a while to write a book, and given a preference we’d read a whole series at once rather than wait between installments. There are the Twilight books as an example, of course, or Potter mania from a few years back, or the agonizing wait Martin has put us through with “The Song of Ice & Fire” [Game of Thrones for the newbs who only heard about it from HBO] — or King, or Patterson, or Steele, or Woods, or Block, or authors sadly passed who will write no new books, or the next series in your favourite genre that you haven’t even heard of yet.

Readers are obsessive.

Not everyone is a reader; certainly more folks passively consume music [because they’re stuck in a car during a commute, or it’s playing as Muzak on speakers in most public spaces we inhabit] and Movies & TV are a mass media in ways that books will never be. […alas. and our society is poorer for it]

In fact, a book is usually only considered a success after it get picked up for [inferior] TV or Movie adaptation — so very sad. Even a “bestseller” will get a sales bump from a movie, because the movie-going public just aren’t readers.

##

Sure, I sell to a niche. And at least two large chunks of that niche [genre readers and avid fans of a particular author, whichever author] are getting peeled off by digital readers: I’m beat, usually by price and certainly in ‘instant gratification’ metrics.

But my core, the reader, is still there. Book Discovery hasn’t quite made it’s way online yet, and the plain truth is that more readers discover new books in a bookstore than they do anywhere else. I’d argue that to an extent they only *can* discover new titles in a bookstore, because of the inherent properties of the books.


image credit: Wikimedia commons

For music, there is radio. And when there were record stores, there was radio. While there were concerts, there was radio — when digital downloads and online streaming and customizable channels and personalized suggestions all hit the scene, there was radio. We can argue that it sucks now, and many of the music stations really, really do suck: but they still broadcast, and it’s still one way (the primary way?) most folks discover new music — if only because broadcast radio is a mass distribution channel, about as ubiquitous as these things get. Seems old fashioned; but still there. Radio is not dead yet.

For books: yes, there are online sales sites and reviews and blogs — and to an extent, customizable channels and personalized suggestion services — but the primary, mass distribution channel is still books on shelves: the retailer. Seems old fashioned, quaint even. But actually bricks-and-mortar retail isn’t going away anytime soon.

[One could argue whether your “bookstore” in 15 years time will be just another small department in Walmart and Costco, but that’s a different essay — and if you ask a publisher whether they’d prefer that kind of channel or an actual bookstore, even a crippled, suffering bookstore that is a pale shadow of the 90s chains on only a fraction of their former salesfloor footprint — well, I think we know which they’d pick]

Books engage. Books demand. Books compel. I can do other things while I listen to music, or while a video plays — but when I read a book I Read and I find myself all but incapable of doing anything else. I can’t even drink beer — well, I can, but I only think to pick up the beer stein at the end of each chapter.

I’m not worried about the new digital landscape — if the world of bookselling changes so much that it’s all online, then well, the online players will need booksellers. I think I’ll be able to find my way. Books are not music, after all. You can make up your own mind about a song in about 5 minutes — in fact, you can listen to the whole damn song in that amount of time in nearly every case.

Books take longer to appreciate, and more skill to sell.

Also, publishers are embracing digital publishing in a way the recording industry never did — and still hasn’t. I’m not saying publishers volunteered to host this party, but now that everyone is showing up, they’ve sent the interns out to buy chips and dip and a digital keg.

Also, there is no related format-bubble like the CD or DVD binge as customers re-bought all their old favourite titles over again to build their new library…

Well… unless you count digital books as the new-format bubble that will eventually pop. (I’m not going to push the point or force you to confront it: I’m just going to leave that little gem right here where I can link to it later.)

As long as there are books, and readers, there will be bookstores. And Amazon is not a bookstore, which is my next topic.



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