The death of the old publishing and bookselling industry

I have been writing for the past year on the revolution underway in the book publishing and book selling industry. Here is an article which traces the history of one of the major forces behind this revolution- Amazon.

Bookselling in the United States had always been less of a business than a calling. Profit margins were notoriously thin, and most independent stores depended on low rents. Walk-in traffic was often sporadic, the public’s taste fickle; reliance on a steady stream of bestsellers to keep the landlord at bay was not exactly a sure-fire strategy for remaining solvent.

Still, overall, selling books was a big business. In 1994 Americans bought $19 billion worth of books. Barnes & Noble and the Borders Group had by then captured a quarter of the market, with independent stores struggling to make up just over another fifth and a skein of book clubs, supermarkets and other outlets accounting for the rest. That same year, 513 million individual books were sold, and seventeen bestsellers each sold more than 1 million copies.

In the mid- to late 1990s, when online bookselling was in its infancy, Barnes & Noble and Borders were busy expanding their empires, often opening stores adjacent to long-established community bookstores. The independents were alarmed by these and other aggressive strategies. The chain stores could give customers deeply discounted offerings on a depth of stock made possible by favorable publishers’ terms not extended to independents. Clerks at the chains might not intimately know the tastes and predilections of the surrounding neighborhood, but the price was right: lower was better, lowest was best.

For many the notion that bricks-and-mortar bookstores might one day disappear was unthinkable. As Jason Epstein put it : “A civilization without retail bookstores is unimaginable. Like shrines and other sacred meeting places, bookstores are essential artifacts of human nature. The feel of a book taken from the shelf and held in the hand is a magical experience, linking writer to reader.”

Enter Steve Bezos of Amazon who set out to construct a twenty-first-century ordering mechanism that, at least for the short term, would deliver goods the old-fashioned way: by hand, from warehouses via the Postal Service and commercial shippers. But he was extending reader access to a greater diversity of books. After all, even the largest 60,000-square-foot emporiums of Barnes & Noble and Borders could carry no more than 175,000 titles. Amazon, by contrast, was virtually limitless in its offerings. And its growth over the last decade has been phenomenal ousting the old fashioned bookstores from their heady perches.

The death toll tells the tale. Two decades ago, there were about 4,000 independent bookstores in the United States; only about 1,900 remain. And now, even the victors are imperiled. The fate of the two largest US chain bookstores—themselves partly responsible for putting smaller stores to the sword—is instructive: Borders declared bankruptcy in 2011 and closed its several hundred stores across the country, its demise benefiting over the short term its rival Barnes & Noble, which is nonetheless desperately trying to figure out ways to pay the mortgage on the considerable real estate occupied by its 1,332 stores across the nation. It is removing thousands of physical books from stores in order to create nifty digital zones to persuade customers to embrace the Nook e-book readers, the company’s alternative to Amazon’s Kindle

The sad fact is that today bookstore wars are over. Independents are battered, Borders is dead, Barnes & Noble weakened but still standing and Amazon triumphant.

Yet still there is no peace; a new war rages for the future of publishing. What is clear is that “legacy publishing,” like old-fashioned bookselling, is gone. Just as bookselling is increasingly virtual, so is publishing. Technology has democratized both the means of production and distribution. The implications for traditional publishers are acute. One thing, however, is certain, and about it publishers agree: e-book sales as a percentage of overall revenue are skyrocketing. Soon one out of every three sales of adult trade titles will be in the form of an e-book. The inexorable shift in the United States from physical to digital books poses a palpable threat to the ways publishers have gone about their business.

The inability of most traditional publishers to successfully adapt to technological change may be rooted in the retrograde editorial and marketing culture that has long characterized the publishing industry. As one prominent literary agent told me, “This is a business run by English majors, not business majors.” Not very long ago it was thought no one would read a book on a computer screen. That assumption is now demonstrably wrong. Today, whether writers will continue to publish the old-fashioned way or go over to direct online publishing is an open question. How it will be answered is at the heart of the struggle taking place between Amazon and traditional publishers.

How the Digital Age might alter attention spans and perhaps even how we tell one another stories is a subject of considerable angst. The success of Amazon’s Kindle Single program, an effort to encourage writers to make an end run around publishers, not only of books but of magazines as well. That program offers writers a chance to publish original e-book essays of no more than 30,000 words (authors agree to a bargain-basement price of no more than $2.99 in exchange for a 70 percent royalty and no advance). It has attracted Nelson DeMille, Jon Krakauer, William Vollmann, Walter Mosley, Ann Patchett, Amy Tan and the late Christopher Hitchens as well as a slew of lesser-known scribblers, some of whom have enjoyed paydays rivaling or exceeding what they might have gotten were magazines like Vanity Fair or The New Yorker to have commissioned their work. Royalties are direct-deposited monthly, and authors can check their sales anytime—a level of efficiency and transparency almost unknown at traditional publishers and magazines.

E-book sales have been a highly addictive drug to many smaller publishers. For one thing, there are no ‘returns.’ E-book sales allowed smaller presses to get a taste of the kind of money that online impulse buying can produce. Already e-book sales were underwriting the publication of paper books-and-ink at Wings Press.

Even as Amazon moves towards integrating publishing and selling books, concerns are being raised about its monopoly of the sector. In the realm of electronic publishing, Amazon until recently controlled about 90 percent of the market, a monopoly by almost anyone’s definition. Most people bought their e-books in the proprietary Kindle file format that could only be purchased from Amazon and only read on the Kindle reader that was manufactured by Amazon. Other makers of e-book readers designed them to accept the open-source e-pub format that allowed customers to have a wider choice of retailers to supply them with e-books. Since then, Amazon’s market share has been declining, but 60 percent of all e-books in America continue to be sold by Amazon in the Kindle file format.“Monopolies are always problematic in a free society, and they are more so when we are dealing with the dissemination of ideas, which is what book publishing is about. “ says one critic. “ And when their business interest conflicts with the public interest, the public interest suffers.”

The history of writing, however, gives us every reason to be confident that new forms of literary excellence will emerge, every bit as rigorous, pleasurable and enduring as the vaunted forms of yesteryear. Perhaps the discipline of tapping 140 characters on Twitter will one day give rise to a form as admirable and elegant as haiku was in its day. Perhaps the interactive features of graphic display and video interpolation, hyperlinks and the simultaneous display of multiple panels made possible by the World Wide Web will prompt new and compelling ways of telling one another the stories our species seems biologically programmed to tell. Perhaps all this will add to the rich storehouse of an evolving literature whose contours we have only begun to glimpse, much less to imagine.