The first business day of the New Year brought the decision to fire the General Counsel and Chief Information Officer as the company prepares to negotiate with vendors. The end is clearly near for country’s second biggest book chain. But the question isn’t whither Borders but whether the loss matters much to books or the publishing business.
Barnes and Noble is busy claiming the all-important Christmas selling season had improved its same store sales by 9.7% in late 2010. We’ll have to wait to see what those numbers really mean but some substantial component of that rise is going to be Nook device sales.
Although Borders decline is a measure of shifting retail channels as books move away from being sold in bookstores to online and big box retail sales, it is also a sign of the rise of e-books. The Nook probably can’t save Barnes and Noble. But not having a electronic reading device surely hurt Borders. There are no accurate numbers for ebook sales but all accounts suggest that e-books own around 10% of the US market and will likely rise substantially again this year. (That’s another reason to write Borders off.)This is a pretty perfect analogy to the music industry, as I described in the DMB post this week. The rise of e-books has democratized publishing and robbed the large publishing houses of their gatekeeper power. More and more authors are now able to self-publish and reach their intended audience, instead of relying upon publishers and retailers to do their work for them.
The development is, of course, bad news for the retailers and publishers, but not necessarily for the authors. Time will tell as always, but for now I consider this another example of creative destruction and of the power of technology in pushing capitalism forward.
[The Big Picture]
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