Barnes & Noble and the Publishing Free for All

THE advent of blogging during the late 1990s significantly lowered the barriers to entry in the publishing industry. Any person with a computer, a blogger account and a half baked idea could get into the industry, and they did. To shake things up further, the advent of blogging reduced the cost of distribution and the price of consuming content to zero. In 2010, eBook sales almost doubled and now make up more than 9% of total consumer book sales.

Despite these significant changes to the industry and a decade of warnings from visionaries like Seth Godin, the publishing industry has been far too slow to respond. The cost structure for physical book publishing is under big pressure, and the following cost breakdown shows where the cracks have appeared:

Cost of Physical Book Publishing:
Author gets 15%
Publisher gets 35%
Distributor gets 10%
Retailers get 40%

Earlier this year a number of major brick and mortar book stores closed their doors. In the US, Borders Group filed for Chapter 11 bankruptcy protection in New York. In Australia, REDGroup Retail, the owner of the Australian book chains Borders and Angus & Robertson, was forced into voluntary administration.

And this is not the end of the story. US based Barnes & Noble and Australian based Dymocks have their heads on the chopping block and are likely to suffer a similar fate, unless significant changes can be made to their respective business models (hint: get out of the bricks and mortar book business while you still can).

If you have any thoughts on how this train wreck waiting to happen will play out, please comment below.

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2 Replies to “Barnes & Noble and the Publishing Free for All”

  1. Several thoughts.
    On the “get out the bricks and mortar book business while you still can”, this is fine if you own stock in the company. It isn’t easy to follow if you actually ARE Dymocks. They’ve got a bunch of stock, leases on stores and contracts with employees. How do they shift into a different business ?
    Publishers also have a problem. Ebooks make it much easier for new publishers to set up, including self-published. Do publishers have a good reputation with readers ? Do people know or care who publishes their favourite authors ? Mills and Boon seem to understand and practice “branding”. Publishers will need brands to be relevant, and will need to nurture that brand by better quality and consistency within a brand.
    Tempting to look at newspapers and periodicals too, as they are suffering from similar pressures, though advertising is a major differentiator along with the presence of government funded news organisations (BBC or ABC in Oz).

  2. Thanks for your comments, Gary.

    This will not be easy for Dymocks, I totally agree with you. However, being on the cusp of extinction is never an easy place to be. I appreciate that I haven’t really suggested what they should do about their predicament. It would seem that regardless of whether they keep their traditional book stores, they will need to diversify their offerings, enter new markets and create new products.

    It is easy to talk about the good old days and how sad it will be when books stores are gone, however it amazes me that I can buy all my books from Amazon.com who ships them from the US, directly to me door, for cheaper than I could buy the books in store at Dymocks.

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