Bookselling: Not Dead Yet.
[feeling better] [‘tis only a scratch]
Books are a 27 Billion Dollar business.
That would be a U.S., 2012 number; and even after we exclude the massive K-12 & Collegiate text book business, BookStats calculates the entire U.S. trade book industry (i.e. what you’re buying) is still $15 Billion, up 6.9 percent from 2011. [BookStats estimate for 2012 quoted here]
In parallel, the US Census Bureau reported that Bookstore Retail for 2012 was $13.4B of that total. Obviously there are differences between the two numbers — total Book Retail ≠ Publisher Revenue, not least because there are multiple sales channels, all the annoying non-book product lines invading most bookstores, and of course the fact that publishers sell to retailers wholesale at a discount. These are the numbers, though — and I’ll remind you the Census retail number is for *stores* and does not include online sales.
For comparison:
- 2012 U.S./Canada Box Office was $10.8 Billion, up 6% compared to $10.2 billion in 2011 [Source: MPAA, pdf]
- 2012 Consumer Spending on Home Entertainment (DVDs, Blu-rays, and Video On Demand) was $18 Billion [Source: Digital Entertainment Group, pdf]
- 2012 Television Production (television programming only, excluding broadcast and cable networks, and Movie production) was a $36B business [source: IBISWorld]
- And lastly: In 2012, the “traditional video game market” (excluding mobile) was $58 Billion [Source: Reuters]
(also, HA! ‘traditional’ video games! next we’ll be hearing about “artisanal locally-sourced small-batch” video games)
Of course, it is easy to conflate the manufacturing, distribution, and ‘retail’ segments in any content business — the dollars spent in aggregate are no guarantee for anyone of future business, or proof of any particular business model. As much as some people may miss the old Tower Records storefronts (“Tower Records” still exists as a bad website, and as a licensed brand outside the US) the old record store model was not sustainable in a new world of MP3s and streaming digital.
[I might argue that point… but that’d be a different essay]
Anyway, the point we’re starting with is that Billions are made in the manufacture and sales of books — and while $10 Billion can be tucked into Amazon’s revenues and all but disappear, Books Are Not Amazon. Or Dead… Yet… or ever… I hope.
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Since at least 1744, there have always been two parallel tracks for book sales: the retail bookseller, and the mail order catalog. If it is not immediately obvious, Amazon is in fact a mail order business, juiced and enabled by the internet but still a very different shopping experience from storefront retail.
Mail order got a big boost in the 1880s when Sears, Roebuck, & Co. leveraged the network [a rail network] to speed up both ordering and fulfillment by an order of magnitude. Amazon is a big damn company, books are a minor sideline these days — but that fraction of Amazon that sells stuff is the heir of Sears & Roebuck, an obvious evolution and not something that is new or revolutionary.
Books by mail became a thing (a massive, popular thing) 70 years before Amazon with the Book of the Month Club: After a couple of false starts, the now-iconic Book of the Month Club was founded in 1926 and by the 40s was (arguably) the nation’s largest bookseller. [I don’t have 1940s book retail numbers in front of me at the moment, hence the qualifier, but in 1949 after a little over 20 years in business, the BotMC shipped it’s 100 Millionth book.]
This history of the Book of the Month Club is incomplete, especially as it seems to stop in 1994, but in addition to the 100-Million factoid above, there are some other great nuggets:
“Although BOMC’s membership continued to grow in the first half of the 1960s, the company’s sales began to stagnate as the impact of increased numbers of retail book stores — many of which sold bestsellers at discount prices — was felt. Another important factor was the rise of paperback books. The proliferation of book clubs and the resulting competition was yet another cause for the slump. Between 1962 and 1963, BOMC saw its sales slip from $19.8 million to $17.6 million. To compensate for the shrinking number of books purchased by members, the company spent more money on promotion to beef up membership.”
Widespread discounting of bestsellers, the popularity of a new format, and newly expanded competing sales channels led to flat growth of an established book seller? You don’t say.
“In the early 1980s the company determined that there was money to be made by publishing books on its own or in cooperation with publishers, rather than only buying the rights from publishers to sell BOMC editions of their books. In 1982 BOMC established its own original publishing division. Its first publishing projects were reprints of such classics as All the King’s Men by Robert Penn Warren (published by BOMC in 1982), William Shirer’s Berlin Diary (published in 1987), and the Revised English Bible (published in 1989). The publishing division then moved on to anthologies and multivolume sets.”
Moving beyond book sales and into publishing? Rescuing forgotten titles and publishing the classics? Why does that sound familiar?
The New York Times reporting in 2001:
[blockquote]
“Since the 1980’s, however, the club system has been under duress. National bookstore chains made books more widely available, alleviating the need for mail-order services. Then online retailers began competing to sell books even to the truly isolated or lazy. As a handful of perennial blockbuster authors came to dominate best-seller lists, the club’s management began paying multimillion-dollar contracts for the rights to several of an author’s future books at once.
…
“Even the idea of a single ‘book of the month’ was becoming obsolete. Computerized databases enabled the club’s managers to tailor the ‘main selection’ each month to the previous buying habits of individual members. A member who responded well to nonfiction would see a steady diet of it as the club’s main selection, while a neighbor might receive only novels.”[/blockquote]
“The Book-of-the-Month Club Tries to Be More Of-the-Moment; New Judges and Niche Marketing Are Part of a Comeback Plan” : David D. Kirkpatrick, NYT, 28 June 2001
Goodness, using computerized inventory and sales history data to individually tailor recommendations.
“There is one kind of book club which could have a bright future: specialist clubs that harness the internet. Two successful new clubs in recent years have been Bertelsmann’s Black Expressions in America, aimed at black women, and Mosaico, a Spanish-language club. For specialist titles, bookstores cannot compete for range with a book club, and the internet lacks the personal touch of a trusted team of editors.”
“Book clubs: The final chapter? The future looks bleak for an archaic corner of old media” : The Economist, 15 May 2008
If someone at The Book of the Month Club had thought to engage their readers/customers on a Goodreads level, the past two decades in book retail would have unfolded very differently. If Goodreads had bought the BotMC in 2008, instead of being acquired themselves by Amazon… well, what-if games are hardly productive and do little to change conditions on the ground.
However: History (in retail or otherwise) is hardly as inevitable as it seems, and the future is more fluid than most realize.
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The past 20 years of Books is not the story of The Big Box Bookstore, nor was it all about The Rise of Online Empires.
The success of both the nationwide chains and of Amazon are both aspects of a single phenomenon: The past 20 years of bookselling are best seen as a change in customer demand for books.
There has been a lot of noise and bluster about showrooming, the book discovery “problem”, the merits of book recommendation algorithms, and the shrinking shelfspace allotted to books in stores. In my opinion, way too many of these opinion pieces romanticize bookstores and don’t take into account how everything has changed since 1993. You know, 1993? World Wide Web, you might have heard of it?
Before the web — and web browsers, the now-invisible but indispensable invention — There was no “online”. At least not in the ways we casually assume today…
The conversation began with pulps in the 30s and Zines in the 60s. As in so many other aspects of our modern life, technology took these modest print efforts and dialed it up to 11: more reviews, more posted reading lists, more fan-to-fan conversation, discussion, flame wars, and FAQs: more fan nexus — hell, being able to even find other fans who like what you do — this “book discovery” that was about Individual Enthusiasm and Consistent Effort and Engagement — that had nothing to do with Amazon and everything to do with dial-up BBS, CompuServe forums, Usenet groups, Listserv mailing lists, and all the other proto-Reddits that your Grandma used a long long time before you, youngling, fired up your first Game Boy for the pokemons.
And yes, while my own experience is heavily sci-fi flavoured, the genres/pulps are the industry leaders in publishing: first to paperback, first to e-, first to a self-sustaining internet community telling stories entirely divorced from the publishing treadmill. Evolution, growth, and development take place on the margins, and the fringe.
In 20 years, discovery hasn’t changed: There is nothing Amazon’s user reviews add to the process that wasn’t already there in the letters column of a fan zine. It is all about the dialog, even when (these days) the dialog is with a machine. “What’s Hot, What’s New?”
Anatomy of Book Discovery: A Case Study : Patrick Brown, posted to Goodreads, 14 June 2012
Book Discovery: Give Me Blind Dates With Books Suw Charman-Anderson, Forbes, 28 March 2013. check the update at the bottom of that article; it led directly to the new website http://www.nonamesnojackets.com/
Why online book discovery is broken (and how to fix it) : Laura Hazard Owen, PaidContent, 17 January 2013
The discovery process is the same today as it might have been in 1989. What has changed is the volume of information available to readers. Once, you had the NYT Book Review, the New York Review of Books, a handful of others… now a world of reviews are a Google search away.
The increase in information about books led to a subsequent demand for books: You have no idea how much you want something if haven’t heard of it yet. There has also been an explosion of “broadcast channels” discussing and recommending books; the biggest of these was Oprah (is Oprah? How’s her book club v2.0 working out) but what other individual sites lack in stature, they more than make up for in numbers: 1000s of people with blogs (or tumblrs, or pinterest boards) (or even maybe facebook – I’m not on facebook so I don’t know about book culture there) — tens of thousands of mini-channels, and at least a dozen ‘major’ sites, all discussing books.
The change in customer demand is often referred to today as “The Long Tail”, a term coined (and/or repurposed to describe this phenomenon) by Chris Anderson — don’t get too bogged down in the Wikipedia entry on this one: that was hijacked by some math nerds a few years back — the basics of the long tail is that when customers can find obscure books they are also more likely to buy them. The immediate corollary is that someone, somewhere will buy even the most obscure book but only if they know about it — undiscovered is the same, functionally, as out of print.
Many commentators describe The Long Tail as uniquely an internet phenomenon, something that only came about with the rise of internet retailers. I politely disagree, and if you would care to know why: I invite you to get a job at a big box bookstore. Come work for me for a month. Answer the phones. Deal with the shopping public.
The change in customer demand does not begin and end with a web site and is not limited to online sales. When someone wants a book, they will seek it out from any retailer, and their buying decision is affected not by the discovery process but rather the same mix of price and convenience that backs all of their sales decisions. Say you just heard about the Cotton Malone thriller series from author Steve Berry – you may not have heard of Steve before (he’s a NYT bestselling author now, but also a bit of a b-lister) (sorry, Steve) — but via some mechanism on the internet, like a by-the-way-comment in a tangentially related blog post you suddenly are aware of The Templar Legacy (isbn 9780345476159) and you think, “Hey, maybe I should read that.”
So you pick up the phone, call your local bookstore – they have it, and you buy it over the weekend. You’re out running errands anyway on Saturday, stopping by the bookstore is easy. Convenience is a matter of personal perspective: maybe ordering online is easier, But There Is At Least One Bookstore Chain With 700+ Stores (still out there in July of 2013, even, not dead yet) and for many people it’s easier to buy in stores.
This example is not only hypothetical, but even if I’m right, the story is anecdotal. Online retail is obviously taking over everything. It’s not like I can point to 13 Billion Dollars in store-front retail book sales as reported by the US Census Bureau or 4.5 Billion in retail sales from a major chain — in an economy that may be recovering but still sucks.
…Nobody is going to a book store anymore, obviously.
When we talk about bookselling, we throw around figures in the billions – in the arena of business news, this isn’t enough to register with observers.
We can talk about monthly sales in the hundreds of millions. I can point out that with reported annual book store sales of $13 Billion, that means bookstores bank more than one billion dollars every month — on average, anyway ;) — and I’ll remind you a third time that the US Census reporting on book stores explicitly excludes online sales channels.
An industry that is dying, obviously.
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For those who might argue otherwise: That bookselling is in decline, that retail storefronts can in no way compete with the efficiencies of online retailers, or even that no one wants a bookstore any more. Well, that is another topic.
[update 14 July 2013, 5:00pm EST : some sentences were added to clarify my thoughts on how the explosion of information on the internet is what expanded customer demand.]