Tuesday, November 22, 2011

The Future of Books

Begin quote:
Nashville might seem like an archetype of the death-of-the-bookstore-everywhere narrative, but its story turns out to be different. The cashier who checked me out at the Brentwood store, Nancy DeVille, had transferred from the Nashville location when it closed, and she said both outlets were constantly packed with regulars drawn to the sight, feel, and smell of books. David Beddow, a supervisor at the Nashville store from 2005 to 2008, remembered costumed crowds snaking around the corner for the release of the latest Harry Potter. He said revenue there had actually increased during his tenure, from $5.5 million to around $7 million a year.
Despite rising online book sales and digital downloads and the Great Recession, bookstores in the area were profitable—right up until they closed. Even Davis-Kidd, locally owned until the Joseph-Beth Booksellers chain purchased it in 1997, had been solvent, undone not by the collapse of the local market but by the bankruptcy of the parent company. (The local Barnes & Noble, at the Opry Mills mall, was closed after a 2010 flood.) Nashville lost its bookstores not because people there had abandoned physical books and retailers. For the most part, it lost them remotely, at the corporate level.
Nashville’s story is not unique. When Borders declared bankruptcy in February, more than 200 of its 400 outlets were still “highly profitable,” says its final chief executive officer, Mike Edwards. There’s no question that the book industry is in flux, with digital sales last year making up about $900 million of the $28 billion-a-year market and increasing fast. But a sizable portion of the book business is still taking place in actual stores. Barnes & Noble (BKS), the nation’s largest book retailer, hasn’t been forced to close its 700 locations. Thus, it wasn’t Amazon (AMZN) —or Amazon alone—that sank Borders. “When there’s a massive transition in an industry, the strong players make it through to the other side,” explains David A. Schick, a retail analyst who covers booksellers for Stifel Nicolaus Equity Research (SF). “What gets caught up in the change are the weaker players.” end quote.

My wife really like real books made of paper and love's paperbacks. She must read two or three a week. Since I got glasses I don't read books that much because I get headaches since I read with glasses when I read books. But I don't get headaches when I read things on a computer. So go figure. So, I read a lot of articles and research on the computer as well as several magazines even though I miss reading books. So sometimes my wife and I read to each other so I don't read long enough to get a headache in one session while reading a book made out of paper.

However, what is really important about the article I quoted above is that about 200 of the 400 Borders outlets were profitable. What this means in real terms is that there likely always will be independent bookstores being profitable in some areas. So if you want to start a bookstore you might want to research what locations were profitable when Borders closed. There will always be people who want to read and own books made of paper, even if they have to print those books out at home on their printer.

note: I only wear glasses for reading and no other time. For example, I don't need them for driving a car or riding a motorcycle or bicycle. A friend who has difficulty reading menus and things now liked my small blue case that I keep in my pocket with mini-glasses in them. So, if you only need glasses to read it is nice to either put them up on your head like my wife does and then only bring them down if you need to read something or just keep a mini-pair in you pants or shirt pocket for emergencies.  When my eyes first started to have difficulty reading small print I was about 45. I'm now 63. But at 45 I would carry a card sized magnifier in my wallet to read the things I needed to before I really needed glasses.

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