I didn't have any Enchanted, Inc. questions to answer, but I've got a tangentially related topic that's one of the big pieces of news in the book world this week. The Borders chain is now pretty much dead. The remaining stores will start closing by the end of the week. This is sad for me, and not just for book buying, since the Borders stores that were even remotely convenient all closed during the last round of cutbacks. But Borders was a major factor in selling my series. I did most of my booksignings at Borders stores, and I heard that a lot of Borders staff members were handselling these books. I got my best bookstore sales through Borders.
The impact that this could have on the book business is kind of scary. The publishing industry does not respond well or rapidly to change. When I was working in the technology industry, we all got a kick out of that EDS ad about running with the squirrels, which was what dealing with telecommunications and the Internet was like. The publishing industry is more like running with the snails, or maybe the tortoises. Not too very long ago (especially in publishing timelines), publishers were basing a lot of their profitability projections on the initial print run -- they didn't want to publish a book if it wouldn't be profitable from the first print run -- and the initial print run was based mostly on orders from the major chains. Even though Amazon has an increasing share of the industry, they order on a more as-needed basis instead of making a big up-front order, while the chains' initial order is generally the majority of copies they'll sell for most midlist books (for the bestsellers that are offered at Walmart, that's where most of the sales come, but most titles aren't sold at Walmart). There are too few independent stores, and each of those stores sells a tiny fraction of the number of copies as a chain sells. So, basically, the buyers for Borders and Barnes and Noble decided what books would succeed and what books and authors would fail, based on their initial buy-in. The people who buy thousands of copies have more sway than the people who buy a few hundred copies at a time and definitely a lot more sway than people who buy ten copies at a time. I don't know what impact the increasing popularity of e-books has on all these decisions and how that's factored into P&L projections. The first print run is still important because it needs to cover the cost of typesetting and print set up (the creation of printing plates). There's anecdotal evidence that the publishers are undercounting the sales of e-books, which means they aren't accurately tracking their impact on the bottom line, and that means they're likely not being properly factored into P&L projections that are part of the decision of which books will be published. So, what this boils down to is that the failure of Borders as a chain means that now the Barnes & Noble buyer in each market segment pretty much has total power over what authors will get another contract, without even the buyer for another major chain to balance that power.
Why did the chain fail? One reason that's been given is that they were slow to catch onto electronic retailing. For a very long time, they outsourced their online shopping to Amazon, so they only strengthened their competition and then entered that market after customers had already formed relationships and habits with other sellers. The other reason was the cost of real estate. Their stores tended to be in expensive locations. Yeah, that's where readers tend to be (educated and affluent), but there were some mistakes made in location decisions. I've been in a lot of Borders stores, and while it's nice that they tended to be extremely spacious, that was a lot of expensive space that didn't turn a profit. Then there's where the stores were. It seemed like they picked locations by sticking pins in a map at every B&N location, then putting their stores in the closest available space. I did a lot of stock signings, where I visited all the bookstores in a city to sign the copies they had on hand, and it seemed like almost all the Borders stores were within about two miles of a B&N. In a lot of cases, the Borders store was across the street from the B&N. That's really convenient for an author trying to hit all the bookstores in an area, but I can't think that it's too great a strategy for maximizing your potential customer base. It's like the TV networks' proclivity for scheduling a series exactly opposite the series most likely to appeal to the same audience. You're forcing people to choose one or the other instead of going to a place where there aren't other options. It's like the main goal was to hurt the competition instead of to improve their own chances (in most cases, B&N was there first).
One strength Borders used to have that they squandered was a knowledgeable and empowered store staff. They used to have networks of subject matter experts at the store level who could help customers, hand sell books and who even had some say with the corporate-level buyers. There was also apparently some autonomy at the store level in purchasing, so instead of all stores stocking what was dictated at a corporate level, they could adjust what they carried based on what would do well at each store. Then apparently corporate started tightening up on control, and there were subject matter experts who were let go because they tended to be senior employees who earned higher salaries, and they were replaced by entry-level people. Things got really bad when instead of genuine handselling they started dictating it from a corporate level, with certain books that all employees were forced to push, with quotas. That was when I stopped shopping at Borders because it was too distracting and annoying to be stalked by employees pushing books I had no interest in (they were all of the book club fodder variety) while I was trying to look for something specific.
What happens now? I have no idea. I hope maybe that more independent stores will arise to fill some of the gaps or that maybe mass merchandisers like Target and Walmart will sell a broader variety of books. I hope publishers will realize that the business is changing and use something other than first print run to decide a book's potential profitability (like including e-books and possible long-term sales). I won't hold my breath, though. Like I said, running with tortoises.