Following on my post from yesterday, which was following on Richard Russo’s op-ed piece, which was following on Amazon’s “Price Check special,” today Slate’s tech guy, Farhad Manjoo, has his own piece about Amazon and indie bookstores—one that has seemingly pissed off everyone I know.

If there’s one thing to say about this, Manjoo brings the provocation right from the get-go: “Don’t Support Your Local Bookseller: Buying books on Amazon is better for authors, better for the economy, and better for you.”

That sound you hear is the sound of 99% indie booksellers exploding simultaneously. And for that last 1%? Check this:

I was primed to nod in vigorous agreement when I saw novelist Richard Russo’s New York Times op-ed taking on Amazon’s thuggish ways. But as I waded into Russo’s piece—which was widely passed around on Tuesday—I realized that he’d made a critical and common mistake in his argument. Rather than focus on the ways that Amazon’s promotion would harm businesses whose demise might actually be a cause for alarm (like a big-box electronics store that hires hundreds of local residents), Russo hangs his tirade on some of the least efficient, least user-friendly, and most mistakenly mythologized local establishments you can find: independent bookstores. Russo and his novelist friends take for granted that sustaining these cultish, moldering institutions is the only way to foster a “real-life literary culture,” as writer Tom Perrotta puts it. Russo claims that Amazon, unlike the bookstore down the street, “doesn’t care about the larger bookselling universe” and has no interest in fostering “literary culture.”

That’s simply bogus. As much as I despise some of its recent tactics, no company in recent years has done more than Amazon to ignite a national passion for buying, reading, and even writing new books. With his creepy laugh and Dr. Evil smile, Bezos is an easy guy to hate, and I’ve previously worried that he’d ruin the book industry. But if you’re a novelist—not to mention a reader, a book publisher, or anyone else who cares about a vibrant book industry—you should thank him for crushing that precious indie on the corner.

Yep. “Crushing that precious indie on the corner.”

Before getting in to Manjoo’s argument, I just want to highlight some of the terms and phrases he uses in relation to bookstores and their fans:

“least efficient”
“least user-friendly”
“most mistakenly mythologized”
“cultish”
“moldering”
“precious”
“frustrating consumer experience”
“paltry selection”
“no customer reviews”
“no reliable way to find what you’re looking for”
“dubious recommendations engine”
“difficult to use”
“economically inefficient”
“my wife—an unreformed local-bookstore cultist”
“supposedly sacrosanct”
“hectoring attitude of bookstore cultists”
“allegedly important functions that local booksellers”
“poofy couch”

If I didn’t know better, I’d say that a bookstore must’ve stole Farhad’s girlfriend at some point in time. This is vitriol, or in schoolyard parlance, them’s fightin words.

Manjoo’s anti-bookstore argument mostly revolves around price—the idea that you can get 2 books on Amazon for the price of 1 that you can get at the local bookstore, and jumps from that to the conclusion that the only reason bookstores sell books at list price is because they are riddled with inefficiencies.

He does at least try and understand why some people like bookstores:

I get that some people like bookstores, and they’re willing to pay extra to shop there. They find browsing through physical books to be a meditative experience, and they enjoy some of the ancillary benefits of physicality (authors’ readings, unlimited magazine browsing, in-store coffee shops, the warm couches that you can curl into on a cold day). And that’s fine: In the same way that I sometimes wander into Whole Foods for the luxurious experience of buying fancy food, I don’t begrudge bookstore devotees spending extra to get an experience they fancy.

Cause yeah, the experience of visiting a store like Talking Leaves in Buffalo, NY or Square Books in Oxford, MS is pretty much the same luxurious experience you get in any of the 304 Whole Foods locations littered across our country. Exactly.

But this starts to get at Manjoo’s prejudices and where he’s really gone astray . . . More on that in a second, first, here’s one last damning quote about the (non-)value of bookstores:

Say you just care about books. Well, then it’s easy: The lower the price, the more books people will buy, and the more books people buy, the more they’ll read. This is the biggest flaw in Russo’s rant. He points to several allegedly important functions that local booksellers play in fostering “literary culture”—they serve as a “gathering place” for the community, they “optimistically set up . . . folding chairs” at readings, they happily guide people toward books they’ll love. I’m sure all of that is important, but it’s strange that a novelist omits the most critical aspect of a vibrant book-reading culture: getting people to buy a whole heckload of books.

What this all boils down to is Manjoo’s unabashed desire to operate like a rational consumer. If the goal of every entity—business, consumer, etc.—is to “maximize surplus value,” then you should try and wed yourself to the principles of neo-classical economics, in which the free market determines the price (there’s nothing preventing bookstores from discounting, and thus increasing demand), and it’s your job to only purchase things in which you get the biggest bang for your buck. It is absolutely 100% economically irrational to purchase a book you’re willing to pay $30 for for that $30 if there’s a $20 version available through means that don’t entail a lot of opportunity costs. This is the primary consumer advantage for online retailers. It’s just as easy (or even easier) to buy the Steve Jobs bio via an online retailer than it is to drive to a store and buy one, and that way you’ve accrued surplus value.

OK, fine. Tech people and stock brokers and MBAs and some Slate writers think like this and want to live like this. Two things: first off, people don’t behave rationally, especially when it comes to price, and secondly, there are hidden opportunity costs in this scenario that relate to community.

Manjoo, in a myopic fashion that is stunningly boneheaded, equates the “buy local” movement with bookstores supporting local authors. That is foolish and beside the point. One of the primary purposes of bookstores is building a literary community. Sure, you can point to readings (which, unless it’s Richard Russo are generally attended by 10 readers and a few homeless) as a physical representation of this, but it’s actually something much larger. A good independent bookstores is a place where you know you can interact with people who read as much as you do. It’s a safe haven for the literati in a world that’s increasingly rationalized and scary. It’s one of the few physical spaces where you can talk about literature and art after college.

This all sounds sort of dreamy and pollyannaish, but bear with me for a few sentences . . . In a way, a good bookstore is the equivalent of Cheers. Sure, I could buy a six-pack for less than half of what it would cost in the bar, but I wouldn’t get to chat with my favorite bartender, laugh with my friends, or check out the pretty people. OK, this is maybe as shitty an analogy as the Whole Foods one, but the “value” of a store like Schuler Books in Grand Rapids, MI, is the social experience AND the book selection. Manjoo’s focus on cushy chairs and shit belies the gross materialism that underlies his entire worldview. (Which helps when you talk about tech, I suppose. And explains some of that social awkwardness thing.)

The reason bookstore lovers advocate for bookstores rarely has to do with the actual books available. We all know that we can find anything we want in quicker, easier ways that cost less money. The reason people sign petitions to save St. Mark’s is because of the enjoyment you get of people watching there, or chatting with Margarita about crazy Russian writers and the East Village poets. Things are learned in bookstores and in interactions that are not able to be learned in online experiences. And for some people, that value exceeds the $10 that you could save buying Steve Jobs online. This isn’t true for all people, but it is for some. Like, as he admits, Farhad Manjoo’s wife.

Anyway, to parallel yesterday’s post, here are three ideas:

1) If you value this community experience and feel like online retailing (especially the big-A) will eradicate it like polio, you should try and find ways to help your local retailers and rail against the online stores. This is the route a lot of booksellers take, and it is an admirable one based on beliefs. I’m not sure how much of a difference this makes in the end, since technology is molding society and our values, but it’s an option.

2) You can give up. Buy books online and use that extra $10 to meet your bookish friends at a local pub. Invest in anti-depressants and Match.com subscriptions. Pray that you become part of the 1% even as you watch hyper-capitalist companies suck your surplus dry in ways so insidious that you think you’re actually signing up for them.

3) Maybe there’s an evolution that could take place. The U.S. Government and other municipalities should make it easier for bookstores to become nonprofits or get grants or find ways to support their base costs. Maybe bookstores and libraries or museums or cafes or bars or other community spaces could join forces in creating spaces for post-grad thinkers to share ideas and passions and books and whatever. The idea of a bookstore a la 1990 starting up in any mid-sized town and surviving is difficult to imagine, but there are always places like Writers & Books and whatnot that can combine bookselling with writing with the love of books with the idea of desiring social interaction.

Oh, and as a friend (who is also writing about Manjoo’s “boneheaded” article) pointed out just now, this article reeks of link bait. Manjoo could be gaming us all, hoping we get pissed so that the read rate on his articles spikes leading to more money for him to spend on $.99 books at Amazon, thus maximizing value.

We talked about this very briefly on last week’s podcast, but now that Richard Russo has written an op-ed piece for the NY Times, I feel like it’s worth exploring this Amazon Price Check controversy in a bit more detail.

First off, for anyone not familiar with this recent Amazon vs. Indie Bookstore kerfuffle, here’s a quick synopsis: About a week ago, Amazon posted this offer explaining that on December 10th, if you use their Price Check App in a physical store, and then buy the product via Amazon.com, you’d get $5 off. Sort of.

To keep this as logical and accurate as possible, here’s the “fine print”:

Use the Price Check App with the location services enabled on your mobile device. See below for information on enabling your mobile device’s location services.

While you are out shopping, you may optionally provide the Price Check App the in-store advertised price of a qualifying product in the eligible product categories (Electronics, Toys, Sports, Music, and DVDs).

Place a qualifying product (shipped and sold by Amazon.com) into the shopping cart within the Price Check App.

Within twenty-four (24) hours of placing a qualifying product in your Price Check App shopping cart, complete your purchase from any Amazon channel (Price Check App, Amazon website, or other Amazon apps). If you do not make your purchase within this time period, the discount will expire.

Your discount of 5% off Amazon’s Price (up to a maximum of $5.00*), will be automatically applied at checkout within the Price Check App.

Naturally, indie bookstores (and Dennis Loy Johnson and many others) got PISSED about how this behavior (using customers to spy on competitors) was evil and would destroy all independent bookstores everywhere, and maybe cause Melancholia to crash into Earth. (Or something like that.)

What was pointed out in the comments section at MobyLives, and is absolutely evident in the instructions above is that books were not included in this program. Sure, some bookstores sell DVDs and Music, so they’re not completely unaffected by this program, but indie bookstores selling DVDs and CDs are making bigger mistakes and should be worrying about things other than Amazon.

Not that this “books aren’t included” argument had any impact whatsoever. Some of my favorite bookstores in the world took this Amazon program and used it as a marketing tool to reinforce local loyalties. Third Place had a special offer all day on the 10th, Diesel started an “Occupy Amazon” Facebook page and movement, and the ABA CEO Oren Teicher posted an open letter to Amazon’s Jeff Bezos that opens “We’re not shocked, just disappointed,” then builds off the sales tax controversy into an attack on the price check program.

Personally, I think the ABA should keep these two issues separate and deal with them on their own terms, but whatever. The point is, most indie stores seemed to follow a similar logic: Amazon may not be targeting bookstores with this particular offer, but they will in the future, and they’ve done enough damage that we need to react now. I worked in indie stores, I get this.

Yet, for some reason, this program didn’t bug me that much. I guess because a) I knew books weren’t included and that’s all I ever buy, aside from wine and b) I fucking hate Target/Best Buy/WalMart/Sam’s Club/Toys R Us and all the other crappy big box stores that sell Electronics, DVDs, Music, and Toys and make Henrietta, NY (and a billion other cities) a veritable wasteland of disgusting warehouse-style buildings and parking lots. To me, there’s little more depressing than driving down one of these streets in Anytown, USA passing by Applebee’s, Chili’s, Best Buy, a vacant Circuit City building, WalMart, and a nondescript sadness-inducing shopping mall. So, had I been motivated to leave behind the couch and my books to save 15% or $15 (whichever is less), to screw Target for its general state of sucking, I would’ve driven over to Sorrowville and scanned some toys that I would then buy from Amazon. Fuck em.

The thing is, shopping in all of these above named locations is an absolutely awful experience. And to pretend that even 25% of America is all quaint locally owned shops where customers get to know the owners and everyone smiles and bakes cookies for each other is foolish. Maybe in NYC and San Francisco and Seattle (ironically) and Chicago and large cities, this is the case. But where I live (where most people live), you can frequent the handful of decent locally owned restaurants and bars in town, but if you need to buy your daughter Mousetrap, you have to go into the bowels of hell. Or order it online. That is the truth.

I love shopping in indie bookstores. Whenever I visit a city, I check in at as many of them as I can. And buy books every single time. I have a problem. (I literally gave away 13 boxes of books when I last moved. And still have 10 in storage to go along with my 4 bookshelves at home, the 2 at work, and the growing stack of books next to my bed. DISEASED.) And I sincerely desire a situation in which indie stores populate the U.S. and most people have an actual choice between ordering books online (which you pretty much have to do if you live in Rochester) or buying from Bookstore X just down the road. I think that should be the goal of anyone advocating for buying local, or restricting Amazon’s influence, or whatever. What we want in the end is a healthy book culture in whatever form that takes.

Which brings me to Richard Russo’s opinion piece from today in which he goes after Amazon in praise of indie stores:

I first heard of Amazon’s new “promotion” from my bookseller daughter, Emily, in an e-mail with the subject line “Can You Hear Me Screaming in Brooklyn?” According to a link Emily supplied, Amazon was encouraging customers to go into brick-and-mortar bookstores on Saturday, and use its price-check app (which allows shoppers in physical stores to see, by scanning a bar code, if they can get a better price online) to earn a 5 percent credit on Amazon purchases (up to $5 per item, and up to three items).

Books, interestingly enough, were excluded, but you could use your Amazon credit online to buy other things that bookstores sell these days, like music and DVDs. And, if you were scanning, say, the new Steve Jobs biography, you’d no doubt be informed that you were about to pay way too much. I wondered what my writer friends made of all this, so I dashed off an e-mail to Scott Turow, the president of the Authors Guild, and cc’ed Stephen King, Dennis Lehane, Andre Dubus III, Anita Shreve, Tom Perrotta and Ann Patchett.

I’m not entirely clear that the first sentence of that second paragraph makes sense, but let’s let that go for a minute. Here’s my problem: Richard Russo and everyone he mentions in here are corporate authors. They are published by the largest media conglomerates in the world, who have used their power and money and influence to shape the book retail world to their advantage.

Who was the target of the last Robinson-Patman anti-trust ruling? Penguin and the other members of the Big Six. They were giving unfair discounts to B&N and Borders at the expense of indie bookstores? Why? Because they could make more money by aligning themselves with the big box stores. (Death to Big Box Stores!)

The reason I bring this up is because it’s worth wondering if the Big Six are in this publishing game for the benefit of book culture as a whole, or to make as much money as possible for their shareholders. The correct answer is the latter, and that’s reflected in nearly every decision they make. As a result, people like Richard Russo and Stephen King publish their books with Random House and Simon & Schuster so that they can reap the benefits of these corporate practices. Namely, Russo and King get way more cash and reach way more readers by being part of this system. They’re also not motivated by “doing the right thing for book culture” but by trying to maximize their impact, relevance, and earnings.

And that’s totally well within their rights. And by “their,” I mean Russo & Co., the Big Six, and Amazon. If one of these parties does something illegal, that’s a different matter, but as I well know, arguing against any of these entities from a moral “you shouldn’t maximize profits by being evil” perspective rings totally hollow in today’s business climate. Banks run rampant, oil companies are less than trustworthy, GE and all fellow corporations game the system to avoid paying any income tax whatsoever to the U.S. government. All in the name of capitalism and the free market, something that we’ve all unwittingly signed on to, and are still coming to fully understand the long-term impact of.

So it seems to me like there are three major ways to approach Amazon and this situation:

1) Acknowledge that what they’re doing is what every corporation would do if in their position (Amazon is not a bookstore, Amazon is more a tech company meets retailer), and that if you don’t like it, you should do everything in your power to benefit those outside of the corporate system and try and take down capitalism as a whole. Publish with nonprofits. Buy all books from local stores. Donate heavily to worthy literary organizations like PEN and Words Without Borders and Open Letter and the Center for the Art of Translation. Help foster and maintain a book culture that’s based in something other than price and hype.

2) Agree that capitalism rules the day, and go make your money in whatever way necessary. Amazon probably sells more Russo books than all the indie stores combined. (Maybe. I could be wrong, but if not now, then soon.) Random House’s colophon and publicity office gets Russo & Co. on the front of the NY Times Book Reivew. Use every advantage the current corporate and social structures give you to make as much money as you can, and if some presses and stores don’t make it, don’t worry—that’s capitalist Darwinism. The weak fail because they aren’t savvy enough. (I cringe writing that whole paragraph. Sorry.)

3) Figure out a valid third perspective or way of accomplishing what you really want. To say Amazon is a completely bad thing is to ignore the fact that someone living in a remote part of the country may not have access to books and other goods through their local stores. Or they have to deal with the obnoxious lighting of Target anytime they want to buy a TV or a copy of Twilight. That sucks. But it’s also true that book culture has been altered by the existence of Amazon. In some ways that are good (more people buying books), in some ways that are not-so-good (fewer communal places for book people to hang). Advocate for a fixed book price law. Work on finding ways to benefit local readers while acknowledging that a lot of people (especially in this economy) are very price sensitive. Find partnerships that benefit the culture as a whole.

I have no answers here. But I don’t think you’re going to get a capitalist company to stop acting in as capitalist fashion as possible, so rather than try and guilt them into “better” behavior, especially since MBAs around the world would likely applaud Amazon’s tactics, or say that they’re not going far enough, since the only goal there is in business is to make as much money as possible at the expense of your competitors.

Earlier in the week things weren’t looking so good for St. Mark’s. They’ve been asking Cooper Union for a $5,000/month break in their rent (which is currently $22,500/month), but Cooper Union was using their own financial difficulties to explain why such a decrease was impossible.

Well, apparently they’ve split the difference, and according to this New York Times article, for the next year, the rent will be “only” $17,500/month and Cooper Union will forgive $7,000 of debt owed them.

The school will also provide student help with revising the store’s business plan. [. . .]

In the past year, the bookstore’s owners have reduced their staff through layoffs and have cut their own salaries in half, but it was not enough to offset losses from the poor economy and the rise in sales of electronic books. Mr. Contant said August was the store’s worst month in memory.

But since then, as the store owners went public with their losses, the neighborhood rallied in response. A group called the Cooper Square Committee started a petition to save the store, attracting 40,000 signatures. Business picked up by about 25 percent in September and October, Mr. McCoy said, leading him and Mr. Contant to believe they could continue with a smaller reduction in rent.

The owners have no plans to rehire staff. The store’s finances remain fragile, especially as the current sales levels recede, Mr. Contant said.

From the NY Daily News:

The struggling St. Mark’s Bookshop was dealt more bad news Tuesday when its owners were told they will not receive a rent reduction.

Owners Bob Contant and Terry McCoy found out their bid for a $5,000 rent cut was nixed by landlord Cooper Union in a meeting with T.C. Westcott, a vice president for finance and administration at the arts and engineering school.

“They don’t feel they can do anything in terms of the rent,” McCoy said. “She started out by telling us that Cooper is really losing a lot of money.”

This is pretty unfortunately, especially given that more than 40,000 people signed an online petition in support of St. Mark’s rent reduction request. There are a few bright spots in this piece though:

[Westcott] did offer Contant and McCoy a deal: They can defer a month’s rent and pay it back over time. [. . .]

McCoy said the outcome of Tuesday’s meeting, while disappointing, is not devastating because the community has rallied around the bookstore in recent weeks.

“People have gone out of their way to patronize the store,” McCoy said. “It’s helped us enormously.”

Over at the New Yorker’s Book Bench blog, Macy Halford has a post entitled “Should We Fight to Save Indie Bookstores?” The basis for her post is the petition to Save St. Mark’s Bookshop that’s going round the Internets and is focused on the difficult the store is having paying market rent in the Lower East Side.

This has always been a huge issue—especially in Manhattan—and has helped shutter the doors of many an awesome bookstore. (Lenox Hill, Coliseum, Books & Co., list goes on.) I’ve been reading a lot about the history of independent bookselling (I’m teaching the very informative and interesting Reluctant Capitalists by Laura Miller in my “Intro to Literary Publishing” class this fall), and as a result could go on and on about this and related issues . . . But I’ll put that off for a rainy (or slighly less busy) day.

Anyway, here’s part of Halford’s explanation for why indie bookstores are important to keep around:

I was explaining all this over e-mail to a colleague, who replied, “I know bookstores are supposed to be good things, but we don’t have video stores anymore, and maybe we need to get used to the new order instead of lamenting the old.” This is what I’d say to his point: it totally sucks that there are no more video stores. I spent long nights hanging out at Kim’s in college, deliberating for hours over which random German film from the nineteen-seventies to take home with me. I actually watched stuff like that all the way through then, maybe since I’d spent so much time and energy looking for it. I even miss Blockbuster: when I was a kid, the Friday-night trip to the video store to pick out a movie was the most exciting event of the week. How I watch a video now is: I browse on Netflix for a while, start watching something, get about five minutes in, wonder if I’ve made the right decision, and start the process over. It’s ridiculous, and yet I can’t…stop…clicking…

My point is that I wish we had been able to save the video store. I know the young citizens of the new order don’t miss it, but kids don’t miss anything: they’re kids. And since we haven’t entirely killed the bookstore yet, I would like us not to. Going into bookstores to browse, to attend readings, to interact with the staff, to see the selection they’ve curated—all these things excite me and entice me to read. If my book-buying experience becomes simply me sitting alone on the couch click, click, clicking, I don’t know what I’ll become (I’ll probably forget I’m looking for books and jump over to Netflix).

Still, my colleague has a point: chaos and destruction are a part of life, and their consequences, impossible to foretell, are not always negative.

Yeah, and on the flip-side, economic, capitalist progress is a part of life, and the consequences of that haven’t always been positive.

Putting aside the occasional frustrations indie bookstores present to me as a publisher of “difficult” books (based on 13 years of working at or with indie stores, I’ve come to believe that 98% of America consists of locations where readers “don’t buy your sort of books”), I’ve come to believe that good bookstores are one of the best things on the planet. It’s been a while since I lived in a town with a solid indie store, and man, do I miss it. Letting my book nerd flag fly here, but there’s something life-affirming about visiting a good bookstore and interacting with other people who really love books and talking about books. There aren’t a lot of places for that sort of interaction in our society (especially not in Rochester, NY—sorry), and it is a great counterweight to the pressure of working hard (and constantly) to make just enough money to be able to make it to the end . . .

So, yeah. Indie bookstores are rad. And I too hope St. Mark’s survives.

For those of you who listen to our (semi) weekly Three Percent podcast, you may remember a discussion Tom and I had a month or so ago about the idea of a “Spotify for books,” whereby someone could subscribe to have unlimited access to all ebooks available on a given platform. As with Spotify, you wouldn’t actually “own” these books—if you stopped paying your $10/month (or whatever) the ebooks in your “library” would become inaccessible, etc. (Critics of this model like to point out that the same thing would happen if this “unlimited subscription” service were to go bust at some point.)

This is a rather simple model, one that’s very much like Spotify and Netflix, and only really applicable to books now that ereaders are fairly affordable and a significant number of books have been digitized.

It’s also an idea that Amazon is trying to put into action:

Online retailer Amazon.com, Inc. (AMZN: News ) is close to launching a digital book library and is in talks with book publishers, according to the Wall Street Journal on Sunday. The library will enable customers to access a digitized content by paying an annual subscription fee, similar to the service provided by Netflix, Inc. (NFLX). [. . .]

The launch of the digital library by Amazon could also further harm the print media and could lower the cost of print books and the demand for them.

Couple quick points:

1) I am a shitty capitalist. Not that I’m the only person to have ever thought about this, but it seems like one of those things that a smarter, more money hungry sort of person would’ve been proposing to a venture capitalist/Amazon a million months ago.

2) I actually think these services are good for print media (and the music industry). The issue of why you read/listen to what you read/listen to, and how you stay within your prescribed comfort zone, is a topic much to large for this ephemeral blog post, but if there’s ever a situation where readers/listeners are willing to “take a chance” on something out of the ordinary, it’s this sort of unlimited subscription model. Before Rhapsody (which I subscribed to for a decade before shunning them in favor of the younger, sexier Spotify), I bought maybe 6 CDs a year, listened to music occasionally, and would pirate things I maybe thought sounded OK, but wasn’t necessarily sold on. Rhapsody changed everything. This past weekend, I listened to tracks from at least 30 artists I had never before heard of, discovering a few I liked, and a number that were just meh. From a user’s perspective, this sort of noodling is essentially free, since you pay $10/month to check out any and everything you want. For presses like Open Letter, a service like this could be golden, since someone interested vaguely in international literature, but unwilling to spend $15 or even $9 on a book by an author with a strange name, would be able to start reading that book for a price that, within their mind at least, is basically $0. It’s like how you start watching strange shows on cable just because they’re there . . . There’s no risk in starting Museum of Eterna’s Novel and finding out if you think it’s the “First Good Novel.”

3) This service would convince me to buy an ereader. Not to replace my current book collecting obsession (on recent trip to New York I gave away 4 Open Letter books to reviewers and booksellers and bought 6 new titles), but to supplement it. There are things I don’t want to own, and books I’d like to just check out. It would be like a massive library right in your hand!

We’re finally back from our respective vacations, and back to podcasting. The big news from when we were gone was the liquidation and ultimate demise of Borders, so this week we talked about bookselling. About the fallout of Borders closing down, about the big losers, about the possibilities for the resurgence of independent bookstores, and about ordering books on Esperanto.

Nice piece by Cursor founder, Red Lemonade publisher, former Soft Skull director Richard Nash on CNN’s website about the fall of Borders and the role of booksellers:

There are many reasons why the tiny, scrappy independent publisher I ran from 2001 to 2009, Soft Skull Press, became a publisher with a Pulitzer finalist and books on bestseller lists from the Singapore Straits Times to the Boston Globe to the Los Angeles Times. Those reasons include the quality of the books themselves, the engaging authors, the supportive media (sometimes!). But the main reason people discovered our books, read them, and told their friends about them, is that thousands of people over the decade unpacked a box of books and, in the process of putting one on a shelf, got curious about it, decided to read it, and recommended it to friends, co-workers and, yes, customers.

This process replicated itself for hundreds of publishers and tens of thousands of books, numbers that grew as technology made it easier and cheaper to create traditional printed books. America’s book retail sector grew fast in the 1990s and 2000s (with hindsight, faster than the economy could sustain) to keep up with the growth in the publishing of books, enabled by cheap credit (again, with hindsight, perhaps too cheap). Superstore after superstore opened, offering customers more choice than had ever before been found in most physical bookstores.

But selection, whether of books or of music, was hardly a compelling reason to go to Borders, when Amazon had all the books you could want, and iTunes (or the file-sharing site du jour) all the downloads you could want. We have more culture, more media, than we can now consume in a thousand lifetimes — we don’t need any more choice. What we need is help in choosing. Borders was not offering that. [. . .]

Where will we find all the mini-Oprahs we need to connect writers and readers? Bookstores can and should be sites for this conversation. Increasingly, the good ones are places where people seeking deeper engagement with their culture and society choose to congregate. They are offering language classes, reading groups, singles nights, writing workshops, self-publishing solutions.

Not all bookstores have gotten on board with the transition from being a place where books await customers to being a locale of social and cultural exchange, which happens to support itself in part by selling books. The brilliant Dutch architect Rem Koolhaas has noted that the less a retail experience is focused on selling stuff and the more it is about something else — an event, an occasion, a vision — the more a store will sell.

Read the whole piece here.

So, Borders is basically dead-and-nearly-gone, what with their liquidation starting tomorrow and almost 11,000 employees losing their jobs in the next few weeks. This was a long time in coming, and is a surprise to no one.

That said, it’s a tricky thing to formulate an adequate response to. On the one hand, over the past few years Borders became a shitty big-box soulless retail outlet. I hesitate to even use the word “bookstore,” since that implies a level of care and attention beyond simply clerking sales and pyramiding crappy titles in entranceways. The only difference between Borders and Best Buy was in product margins. And volume of customers, I suppose.

But seriously, the chain trend has always been a troubling one, since there’s everything great about making more books available to more people. I would’ve flipped my shit if there had been a B&N or Borders in Essexville when I was growing up. (Those were dire times that I’ve since made up for by accumulating a National Debt’s worth of unread books.) And historically, Borders was more dedicated to having a deep backlist and a solid selection than their rivals. (See the series of interviews with Borders folks that appeared in the Review of Contemporary Fiction some time back.)

At the same time, these stores replaced quirky hometown bookshops with an offensive homogeneity that I was never completely comfortable with. It’s easy to play the cynic in relation to this sort of crap retail environment and complain that B&N is ruining the taste of Americans by force-feeding Twilight knock-off shit down the throats of anyone who wanders in the front doors. Not to mention that all the table space and end-cap displays and other promotional fixtures are paid for by publishers. I’m always shocked when people are shocked to find this out. Of course these promotions are paid for! There are very few pure things left in this hypercapitalist world, and books have such nonexistent profit margins that these stores had to milk what little they could milk.

That all said, the first bookstore I worked in was technically Borders Store #04. Schuler Books & Music in Grand Rapids was one of the first stores in the country that used Borders’ inventory, ordering, and POS systems, but had its own retail identity. In many ways, it was the perfect bookstore set-up: There was no true competition (Borders couldn’t have a store within 50 miles and the local B&N was a rundown joke), the costs were lower than they would be if the store did it’s own buying and account maintenance, and employees were encouraged to be too well-read and too smart and somewhat snarky and all of the great things that make up that special bookseller aura of the mid-90s.

But to the point: Borders released info on their last operating quarter yesterday and this is some pretty bleak shit.

Losses were $1.5 million; without gains from reorganization items and income taxes factored in, that number would have risen to $20.6 million. The value of Borders’s inventory was $431.7 million; total assets were $696.5 million, with total liabilities of over $1 billion.

And this from a massive company that leveraged certain advantages, like bulk purchasing, advertising money, national recognition, etc.

A while back I hypothesized that when Borders tanked (and really, this has been years in the making), there would be a rise in indie bookselling. I still really, truly hope that is the case, and I have heard from a number of bookstores whose sales have jumped recently, because of Borders and because of general increases in book sales. This is very encouraging and very interesting, but to play devil’s advocate against myself, all of these stores are in major metropolitan retailers.

That fits well with other indie bookselling trends I’ve noticed over the past years. Some of the greatest “new” stores—like WORD, Greenlight, Idlewild, etc.—are all quirky, curated, awesomely informed, out-of-the box thinking, socially savvy stores that happen to be in the NY area. There is one solid indie bookstore within 50 miles of Rochester, NY, and that’s Lift Bridge Books, a nice store, especially if you like kids books. They don’t carry Open Letter titles, which is that irritating truth for a lot of indie bookstores. Margins are too tight, they can’t take risks, etc., etc. So realistically, if an indie store opened here next year, it’s likely that it would stock all the same books that you could get everywhere else.

We do have a decent B&N here in town where residents can browse and buy all Open Letter titles. And that’s really the crux of the problem. Borders was a space for selling books. Yes, online retailing allows for a press like ours to reach a much larger potential audience, but I think our culture is enriched when there’s a lot of ways to interact with, find out about, and purchase books. Maybe libraries will fill in some of these gaps, or maybe everyone will use their iPads to virtually check things out and virtually communicate with each other.

Anyway, this PaidContent post about the Borders aftermath is pretty interesting and contains a few harsh points:

What does this mean for publishers and authors?

It’s unequivocally bad news for publishers and authors. Bottom line: The closure of Borders means fewer places to sell books (and promote books and book discovery). Publishers will have to reduce their print runs and shipments, and, as the NYT‘s DealBook pointed out, may have to lay off employees who worked only with Borders. Borders’ closure is particularly bad for paperback sales: it “was known as a retailer that took special care in selling paperbacks, and its promotion of certain titles could propel them to best-seller status.” Independent booksellers, counterintuitively, could also be harmed by Borders’ closing: In the Providence Journal, one independent bookseller feared that publishers, squeezed for cash, will be less able to extend discounts to indies.

Who is losing the most money from Borders’ liquidation?

Publishers. Penguin alone is owed more than $41 million. See our list of the biggest losers from the Borders bankruptcy.

Given the fact that Borders never bought any of our books (they’ve been on credit hold since the formation of Open Letter), this won’t impact us much at all. That said, I’m torn between being gleeful in my typical anti-corporate, anti-culture homogenization, anti-box store way, and feeling bad that we’re losing hundreds of spaces where readers of all ages could find out about books. I know that books aren’t going away, and that the internet and ebooks and edevices will be filling in some of this, but that’s something a bit different. Not better or worse per se, just different. All of this is what makes this a pretty interesting moment for publishing . . . and provides a chance to wax nostalgic about recent eras in bookselling.

I resisted commenting on the $8.3 million of insane bonuses Borders is offering its top execs, but now that Borders has reached a new low and are having a meeting with skeptical publishers this morning to try and convince them that their reorg plan is viable, I think it’s time to really diss on this debacle.

According to PW:

Publishers are unhappy over the size of the executive bonuses, worried about Borders’ plans for returns, and annoyed that the chain appears to have overstated how well they are doing by combining going-out-of business sales with sales from ongoing stores. None of the major publishers has yet to resume shipping to the chain on normal terms, although a number are shipping the chain on a cash basis. Borders is eager to return doing business on regular terms.

The details of the reorganization plan are confidential, but according to the Wall Street Journal, part of the reorganization will include a move out of Ann Arbor and greater reliance on e-book sales.

First off, the bonus thing is bullshit and smacks of all the b-school rhetoric about compensation incentives. “Get us out of Chapter 11 and we’ll make you RICH!” Since 1999, no book person has been CEO at Borders. Instead, they started raiding Jewel-Osco for execs with grocery store experience. Which worked out . . . well, what’s the antonym of “awesome”?

But now, somehow, someway, I feel sure that Borders will work its way out of bankruptcy, pay off these newcomers, and then go totally bust 6 months after they flee.

It’s not that I’m entirely cynical about corporations (yes I am. Especially after this), but look at the two named points of their strategy:

1) Get out of Ann Arbor;

2) Greater reliance on e-book sales.

Forget about the fact that, in some way, Borders morally owes Ann Arbor, but in what part of America will they find a more affordable place to have their headquarters? Downsizing is one thing, moving when you have no money just seems sort of dumb.

And e-books?!?!??!? When was the last time you even noticed that Borders has a website? Yep, never. Well, they do. And you can even buy a Motorola Xoom from there. And some affordable e-books that you can read on your Kobo. I feel like an ass kicking a chain that I used to work for¹, but if Borders has even 0.001% of the ebook market, I’ll be amazed.

(Really doesn’t help that they have to post this on the ebook page: “If you have any concerns about Borders’ recent changes, please be assured that your eBook Library is perfectly safe. Access and add to it freely..” Also funny that the Borders ebook software has been “liked” by 2,740 people on Facebook. Open Letter is “liked” by 2,248.)

Anyway . . . yes, focus on that. By the time Borders is shipping back trainloads of unsold merchandise after finally running itself totally into the ground I’m sure they can get their market share up to 0.01%.

The upside of all this is that the indie stores I’ve been talking to seem to all be having up years . . . Especially those located near soon-to-close Borders Stores. I suspected that a majority of Borders shoppers (something about using the words “majority” and “Borders shoppers” in a sentence feels wrong) would have turned to ordering online, but it’s reassuring to see that there are still a lot of people out there who want to visit a physical bookstore. It’s a great opportunity to indies to show a new group of consumers all the benefits they add to a community.

UPDATE: As I was finishing this up, I came across this piece on a new part of the “Teacher Appreciation Days” at Borders:

It’s an expansion on the BORDERS – GET PUBLISHED program that Borders runs in cooperation with BookBrewer, a self publishing service. For a measly $75 a teacher can sell their eBook through the Borders eBook store as well as other major eBook retailers, and receive a complimentary paperback version of their book.

I’m thinking that Borders is SO focused on e-books and potential e-book revenue that they’re totally unaware of the outside world. I’ll let MediaBistro take it away and deliver the parting shot:

Note: aside from the complementary paperback, this deal can be found anywhere for free. Teachers can publish through Amazon, Smashwords, B&N, or Kobo at no cost to themselves. You really need to ask if the $75 fee is worth it.

On a related note, Borders seems to have gotten a little scatter-brained since the bankrupotcy. The press release mentions two e-reader that Borders no longer sells. One is the original Kobo, which was discontinued months ago.

Yes, I’m sure this reorganization will go smoothly . . .

¹ Schuler Books & Music, which used to have one of the greatest staffs and fiction sections in all the U.S., is technically Borders Store #04. We used the Borders POS and Inventory system, Borders sent us stock that we would always have to supplement/replace with “real” books, etc. I’m thinking that this arrangement is going to have to change, since Schuler has been expanding, whereas . . .

As you may have heard, Borders is in a bit of trouble. Not that they haven’t been on the brink of disaster for years, but with the announcements of the past couple weeks—including the suspension of payments to some publishers, resignation of several execs, closing of a distribution center, etc.—it sounds like they really are on their last legs.

There’s a lot to be written about this and the impact such a collapse would have on bookselling and book culture in general, but in terms of what went wrong, The Atlantic has an excellent article by journalist/founder of Public Affairs Books Peter Osnos:

So what happened to Borders? An early innovator in controlling inventory, there was expert staff at its Ann Arbor headquarters and store managers who believed in the value of book-selling. At its peak, Borders superstores had all the attributes of good book-selling—extensive selections, browsing space, coffee bars, and outreach programs to surrounding communities. In 1998, Borders shares hit an all-time high of $41.75.

To understand Borders’ decline, it is worth going back to its origins on State Street in Ann Arbor. The store was founded in the early 1970s by Tom and Louis Borders, University of Michigan graduates who developed an inventory tracking system that, by the standards of the time, was as sophisticated as computers allowed. When I came into publishing in the middle 1980s, I was impressed with the shrewd team of buyers who dealt with publishers’ sales representatives and the store staff that made the most of the simple aluminum fixtures where books were displayed. The Borders brothers began licensing their inventory system and began to expand to locations in Michigan and around Philadelphia. [. . .]

The Borders brothers decided not to stay in the book business, and in 1991 sold the small chain and inventory systems to Kmart for $125 million. In retrospect, that was when the trouble began. Kmart already owned Walden mall stores, which were an awkward commercial fit with the Borders culture. Kmart itself was at the start of a downward spiral, and in 1995 Borders was spun off in an IPO. For a time, the newly named Borders Group seemed to be working. Under the leadership of Leonard Riggio, Barnes & Noble was expanding also, and the competition between the chains seemed to create dynamic energy that benefited them both. The losers were the local independents who couldn’t keep up with the marketing and promotional resources of these national corporations. [. . .]

Fast forward past a crucial mistake of making Borders.com an affiliate of Amazon, and you end up in the 2000s:

bq.Meanwhile, the mall business was drying up, and Walden eventually all but disappeared. The role of the Ann Arbor-based experts in selection was gradually diminished. A series of expensive marketing roll-outs and loyalty programs never gained necessary traction. Most damaging was the management turnover, especially at high levels. CEOs and other executives flowed through the Ann Arbor offices, cutting staff, rounding up financing from private equity investors, and promising to catch up with the digital age. But Borders always seemed a step behind where they needed to be. Borders stores took on a generic quality as executives and investors lacked the knowledge and patience to address the chains’ mounting problems. .

There’s a lot of Monday-morning CEOing that can go on, but I truly agree with this almost anti-MBA comment he makes at the end of his essay:

Len Riggio, Jeff Bezos of Amazon, and the successful independent proprietors, whatever their other business virtues and flaws, really have a deep attachment to books and the people who read them. But when Borders expanded, they brought in executives from supermarkets and department stores (all of whom insisted they were readers), and the result was a shuffle of titles and more downsizing against a backdrop of financial engineering, which only seemed to make matters worse.

So, according to Neil Van Uum, president of the Joseph-Beth Booksellers chain, which recently filed for bankruptcy, most indie bookstores aren’t long for this world:

Van Uum said the bankruptcy’s roots came in the summer when the company began “to run a little bit sideways” on some of the terms of its loans.

“I recognized we needed to do something,” he said.
While the company’s bankruptcy protection doesn’t specify its exact debt, its top 30 creditors are owed more than $5.8 million. The majority of that — $3.55 million — is owed to book company Ingram. [. . .]

Van Uum said the bankruptcy traces to a number of factors, including the tattered economy and increasing Internet sales. The chain has seen declining sales for the last five years.

“I think in the next three to five years, you’ll see half the bookstores in this country close,” he said.

Barnes & Noble, the country’s largest bookseller, put itself up for sale in August and has struggled for years with declining sales. It’s pinned hopes on initiatives including its Nook electronic reader.

“There’s a lot of fixed overhead in the book business, especially with stores as complex as ours,” Van Uum said.

He’s probably right, and that definitely sucks . . . Not for the sale and distribution of books necessarily, but for the culture of reading and book appreciation that underpins all great indie bookstores, which tend to be staffed by people who actually read too much and like to talk about books and the wonders of literature. Announcements like these make the America of Super Sad True Love Story, in which books are considered to be “smelly, outdated products,” seem like a distinct possibility.

But the real cause of J-B’s downfall? Not enough Open Letter titles.

Every time I feel like I’ve said all I really want to say about e-books and digital revolution (see all of these pieces from my recent trip to Paris), some crazy announcement or other is made, feathers are ruffled, barbs are traded, and I feel the insane itch to comment . . . And no matter how much I try and resist (just look away from the Simon & Schuster/Amazon.com pissing contest, just walk away), I always feel like I’m sucked back in.

This time it’s two separate and seemingly unrelated articles that got me to thinking about e-book release dates. First, from the Wall Street Journal:

Simon & Schuster is delaying by four months the electronic-book editions of about 35 leading titles coming out early next year, taking a dramatic stand against the cut-rate $9.99 pricing of e-book best sellers.

A second publisher, Lagardere SCA’s Hachette Book Group, said it has similar plans in the works.

“The right place for the e-book is after the hardcover but before the paperback,” said Carolyn Reidy, CEO of Simon & Schuster, which is owned by CBS Corp. “We believe some people will be disappointed. But with new [electronic] readers coming and sales booming, we need to do this now, before the installed base of e-book reading devices gets to a size where doing it would be impossible.”

I’m sure any and all regular readers of this blog already know where this is going. There’s no point in focusing on the “predatory pricing” tactics of Amazon.com in this particular post. (Tactics which sound pretty similar to the “predatory pricing” tactics of the big box stores a few years back, but wtf? those price cuts helped corporate publishers to consolidate and expand, so there wasn’t nearly the same amount of hand-wringing as there is when a tactic starts to nibble at their bottom-line. I’m not making any judgments about Amazon.com or B&N or Borders or the business of bookselling as a whole, but fuck me does this whole thing sound hypocritical. To pull from my favorite bag of sports cliches—winning makes all problems go away. But once you start losing, it’s time to point fingers . . . And in this recession, big publishers are making the Detroit Lions look legit.)

But I can’t resist making fun of this: “with new [electronic] readers coming and sales booming, we need to do this now, before the installed base of e-book reading devices gets to a size where doing it would be impossible.”

Yeah. Booming sales of e-books is a huge problem. Everyday publishers lament the fact that readers are buying their books. That activity must be nipped in the bud!

OK, to stop being facetious for a second: clearly Carolyn Reidy doesn’t hate the people who buy S&S titles, she hates the fact that they won’t pay the inflated hardcover prices that have kept this industry afloat and static for the past X number of decades. Those bastards! If these sales continued to expand, no one would be paying $29 for a 400-page book of questionable worth. And then S&S would have to figure out how to cut costs, how to publish more successfully, etc., etc. And that would suck. For Carolyn Reidy. So instead, she wants to at least delay you e-book readers from getting your e-book when you want it.

This decision follows a pretty standard model: You can see the movie at the theater now, or wait 9 months for the DVD; you can buy the hardcover now, or wait a year for the paperback.

You can buy the physical CD now, or wait . . . crap—that analogy doesn’t work. Wonder why . . .

The big gamble here is that readers value immediacy over price. That you want a book so bad that you’re willing to pay an extra $12-18 to get it rightnow instead of waiting four months for the discounted e-version. And that there’s no clear differentiation between p-book readers (god I hate that term, but whatever) and e-book readers.

Which could be totally wrong.

I don’t know how much market research S&S has done on e-book readers (I’ll guess zero, but who knows, maybe they polled their own employees), but it’s possible to imagine a scenario in which there is a group of readers who have invested $250+ in an e-reading device and only want to buy e-books, and a different group of readers who only like to collect hardcovers, and a third group that will always wait for the paperback. (I fall into that category.)

If this is the case, and if e-books are booming, and if the people who read e-books help spread the word about titles they read and love to other readers who fall into one of these three categories, than S&S maybe handcuffing their own sales by preventing books from achieving their maximum sales velocity when released.

Just imagine if a CD came out, then we all waited four months to buy it through iTunes. Most of the reviews and publicity would take place at one point in time, whereas a massive amount of sales would happen at another. There’s a real disconnect here between marketing efforts and word-of-mouth, but whatever, Reidy gets paid the big bucks to make money for shareholders and increase the bottom line, not to increase the access readers have to great literature.

*

Over the weekend, Margo Rabb wrote an interesting essay for the New York Times called Steal These Books about which titles are most often stolen from bookstores. There’s one paragraph in particular that caught my attention:

But this doesn’t mean that every reader is contributing to the bottom line. Only 40 percent of books that are read are paid for, and only 28 percent are purchased new, said Peter Hildick-Smith of the Codex Group, a consultant to the publishing industry. The rest are shared, borrowed, given away — or stolen.

Those are some fascinating statistics, especially in relation to how we conceive of e-book readers. Granted, this is in relation to books that are actually read and we know most publishers really only care about books that are sold (a fine, but financially crucial distinction), but it’ll be interesting to see how this plays out in the e-book world.

One reason publishers are so jacked with optimism for an e-book future (as long as it conforms to their present ideas re: pricing, DRM, etc.) is because it will allow them to cut down on all of this “borrowing” and “giving away” of books. Things will inevitably change, but for now, the idea of being able to sell a e-version to every single person who wants to read the book, jacking these percentages way, way up just through technological limitations, is very appealing. To some people.

From this month’s featured independent bookstore:

Skylight Books turns it up a notch in July and August with Hot Summer Nights extending their hours till Midnight on Fridays and Saturdays for the rest of the summer. Located in a busy, walking-friendly neighborhood of Los Feliz and accentuated beautiful California weather, Hot Summer Nights is definitely the independent bookstore to visit. Skylight is bringing in dj’s, showing movies, featuring live music, and offering discounts on books featured in the weekly theme. Late night Twitter and Facebook contests get everyone involved even if they aren’t there to enjoy the sweet treats and libations!

Which sounds like a great time. And like something other stores could be doing as well . . . When I worked at Schuler Books & Music in Grand Rapids, MI, I was always amazed by how many people would come out on a Friday or Saturday night just to browse, talk, drink coffee, etc. The store really was a destination . . . makes me wish Rochester still had a cool independent . . .

Last week, Jessica Stockton Bagnulo, Jenn Northington, Stephanie Anderson, and other independent booksellers started a conversation about the benefits of eARCs—electronic versions of the Advance Reading Copies all publishers send out to reviewers, booksellers, bloggers, etc.

My complete post about this can be found here, but the main impulse behind this idea is that a) ARCs are expensive and wasteful, and b) for booksellers (or reviewers) who receive 50+ books a week, an e-reader makes a lot more sense than hauling around all these titles. (For someone who likes to ride his bike to work, I’ll attest to the fact that these galleys can seem heavier than frickin’ gold at times.)

Over at GalleyCat, Jeff breaks down the galley costs for commercial publishers to demonstrate that a one-time investment could save them millions:

Let’s face it, all the major publishers are pretty much sending their galleys out to the same reviewers year after year. That’s why, if the reviewers’ offices are anything like mine, they have a good stack of 100-150 books coming in every week (no exaggeration) from every major, mini-major and independent publisher.

This is where the “saving the $1.5 million a year” comes in to play. If all the publishers are sending their galleys to the same 1000 reviewers, why don’t they send everyone an eReader.

“But (gasp) Jeff, that would cost too much money!”

Would it? Would it, really?

Let’s examine the costs:

1000 reviewers
x $3/galley
x $1/ U.P.S. mailing cost
x 375 titles/year
_______________________
$1.5 million /year

That’s $1.5 million a year the average major publisher is spending printing and mailing out to the same 1000 reviewers every year.

Now, let’s examine how much it would cost to mail each reviewer all a Kindle, including shipping costs.

1000 reviewers
x $400 /Kindle
x $0 / galley
x $0 / U.P.S. galley mailing costs
x 375 titles/year
_______________________
$400,000

That’s $400,000 the first year and not one penny more year after year.

This doesn’t even take into account the fact that the $400,000 could be split by any number of publishers or publisher associations, thus saving even more than the $1.1 million in the first year.

I hate to play the pessimist, but I’m sure that until the big publishers figure out a DRM scheme that they’re happy with (sounds like 2001 all over again), they’re not going to want to go ahead with this sort of idea.

And although I have my concerns about how the rise of e-books will play out in the marketplace, I do think that in an industry where shipping companies are the only ones that ever seem to make any money, something like this makes a great deal of sense.

I have to visit a graduate seminar later today to talk about e-books and the future of the publishing industry, so the impact e-books will have (or rather, are having) on publishing structures (like indie bookstores) has been very much on my mind the past few days, so finding Jessica Stockton Bagnulo’s post about recent discussions among smart indie booksellers about e-readers was absolutely perfect.

Jessica’s main focus in her post is on replacing traditonal print advanced reading copies with e-version—something that makes a lot of logistical sense to me. The unit cost for printing galleys is more than the unit cost for the finished book, and (for small presses at least) it’s quite an expense to print and mail even just 250 ARCs of a book. Not to mention that these 250 copies have a pretty weak reach. A huge proportion go to reviewers who never review the book anyway, with only a handful ending up with enthusiastic booksellers.

And from a bookseller’s perspective, not having to receive and carry around tons of heavy books makes a lot of sense:

Here’s the next most important issue: E-readers make sense for people who read in massive quantities. Many of our sales reps are already reading on Sony readers, and it makes sense for booksellers too. We’ll all most likely still be reading plenty of pbooks (that’s print, or “real” books), but since it’s in our job description to read widely and quickly, carrying around many on one device makes sense.

This sentiment is echoed in Jenn Northington’s modest proposal, in which she presents this idea:

my initial idea was pretty basic: publishers provide a small group of booksellers, who they already send loads of arcs to, with an e-reader. then, they make those ARCs available as, say, pdfs to download. the bookseller, in exchange for the e-reader, agrees to read x number of ARCs from those publishers per season.

Which also sounds reasonable, especially if the upfront costs were split by a number of groups: a consortium of publishers (big and small), the American Bookselling Association, Sony (I doubt Amazon would be a welcome partner in this, and Apple is too full of itself to see any gain from engaging with booksellers in this way), and possibly the bookstores themselves (like $10/reader to demonstrate a commitment to the project).

Jenn lists a ton of the pros and cons to this idea, with “increased access to ARCs for booksellers” being the pro that’s most appealing to me.

There are a number of other indie booksellers writing about this same idea, including Stephanie Anderson from WORD, Rich Rennicks of Malaprop’s, Arsen Kashkashian of Boulder Bookstore, and Patrick from Vroman’s.

And just for the record, NetGalley was designed as an interface for publishers to distribute e-galleys to reviewers and booksellers and other “professional readers.” From what I’ve heard (I have yet to use the service), it’s pretty solid, the only problem being that there’s a per galley charge to publishers, something that indie e-ARC idea wouldn’t necessarily include. And NetGalley (at least for now) only allows you to read the books on your personal computer, which works against the inherent transportability of a physical book or an e-reader.

Anyway, I think the eARC idea is a complete winner, and I really hope this moves beyond the conceptual stage . . . I’d be happy to send 1,000 eARCs of Open Letter books to booksellers across the country.

I think the bigger problem for a press like ours is to try and get booksellers to pick up our books when a Corporate Rep is visiting these same booksellers every few weeks, telling them about THE NEXT BIG THING from Conglomerate X that will be EVERYWHERE next week and that ALL the customers will be talking about. (Sorry—maybe I should start a unnecessary CAPS blog.) But that’s the case now, and by distributing way more e-versions of a book, there’s a much better chance that some bookseller will “pick up” one of our eARCs and get excited about it. (I think that’s a necessary quote.) Although this is one of my big concerns for our e-book future—whether or not e-books in general will make it easier for small presses like ours to directly reach readers/reviewers/booksellers, or if the old systems will dominate even more than they do now thanks to their money and their extensive infrastructures, making it even more difficult than ever to break through the marketplace noise than it is now. More on that in Part II . . .

Last week, Shelf Awareness ran a short bit about the precarious state of Shaman Drum Bookshop’s finances. This was based on a letter that owner (and Open Letter advisory board member) Karl Pohrt wrote for the Ann Arbor Chronicle. Rather than rehash what was said, or speculate about the Shelf Awareness piece, here’s the full text of Karl’s letter. It’s pretty bleak:

What Happened?

This fall and winter Shaman Drum Bookshop went into a steep financial decline. Text book sales declined 510K from last year. We managed to cut our payroll and other operating expenses by 80K, but that didn’t begin to cover our losses.

There was some good news. Our trade (general interest) book sales on the first floor were actually up in December from last year by 10%, which is extraordinary given what many other retailers were reporting. And trades sales in January were up 15%. Still, this hardly compensates for our losses in textbook sales.

The evaporation of our position has been astonishingly swift. We had been holding relatively even financially until September. Suddenly we’ve moved into the red.

I sort of saw this coming.

In July, 2004, the National Endowment for the Arts published Reading At Risk, a report detailing the decline of literary reading in America. This was followed by a second report in November, 2007, To Read or Not to Read: A Question of National Consequence, chronicling “recent declines in voluntary reading and test scores alike, exposing trends that have severe consequences for American society.”

Around the same time the NEA reports came out, I audited a UM course on the History of the Book in which I learned that every 500 years a major technological shift occurs. Five centuries ago Gutenberg invented (or perfected) moveable type. Now, with the digitization of print, we find ourselves in the middle of another sea change. I recall wondering what the new business model for bookstores would look like, and I worried that our industry would suffer from the same chaos roiling the music world.

And a few years ago the University Library held a conference on Digitization. I was invited to be a panelist and I defended the traditional book as still the most efficient technology for delivering information. I also said I was worried about collateral damage during our forward march into the joyous digitized future. I’m no Luddite, but everyone there seemed to me to be hypnotized by the new technology. Of course, it is dazzling.

In my own retail neighborhood I’ve watched the collapse of Schoolkids Records, an awesome independent record store, due largely to the impact of digitization, and it looks like I’ve got a front row seat on another sad decline. Borders Bookshop, which I think at one time was the best general interest book chain in the English speaking world, is a shadow of its former self and seems headed for oblivion.

Early this fall I told a group of booksellers that our industry (including the publishing sector) had a business model that didn’t work very well for any of us. A few of the booksellers said they didn’t think this was true, the others were silent.

Two weeks ago I met again with booksellers and publishers from around the country at the American Bookseller Association’s Winter Institute. Now everyone seems to agree that the book business is in trouble. The disintermediation resulting from customers migrating to the internet coupled with the frightening economic crisis makes it terribly difficult for us to see a way forward.

The crisis at Shaman Drum Bookshop is due to our loss of textbook sales. This fall the university introduced a program which allows professors to list their textbooks online, which effectively drives a significant number of students to the internet. It is impossible for local textbook stores to compete under these circumstances. I don’t think there are any villains here (well, maybe some greedy textbook publishers), but this is one of the consequences of the university’s policy.

The efficiencies of Amazon—even given the clever algorithms that bring us if you like this, you’ll like that—are no substitute for browsing in a bookshop.

In 1942 the economist Joseph A. Schumpeter said, “Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in. . . .” This is our system and Schumpeter is undoubtedly correct, but there is a countervailing fact that is equally true: Stability is essential for a civilized society. The second truth is what I’ve learned selling books in this community for forty years, being married for thirty-seven years and raising two children.

It also seems to me that if we are witnessing the collapse of Big Capitalism, the way to revitalize the economy is through supporting locally owned businesses. If you agree, please lend your good energy to Think Local First, the movement supporting locally-owned independent businesses in Ann Arbor and Washtenaw County.

What Is To Be Done?

Shaman Drum Bookshop is around one hundred steps from the central campus of the University of Michigan, one of the top ten public universities in the world. I believe the university community and Ann Arbor citizens who love literature need a first rate browsing store for books in the humanities in the university neighborhood. This is what we aspire to be.

However, as I mentioned earlier, it has been clear to me for a while now that the current model doesn’t work. In March 2008 I announced my wish to give the bookshop to the community. I hired Bob Hart, a recently retired Episcopal priest, to research the feasibility of forming a nonprofit bookshop. We wrote up a careful business plan, met with a good lawyer, filled out the IRS forms and submitted our papers in July. In November the IRS notified us that our application was still under consideration. The review is taking longer because a for-profit business is a component of the project.

The new entity is called the Great Lakes Literary Arts Center, whose mission is “to develop excellence in the literary arts by nurturing creative writing, providing quality literature and fostering a literate public.” We’re already hosting two classes in the store. If we do not survive this downturn, I hope the Great Lakes Literary Art Center will continue under other auspices. It is a good idea.

Last week I consulted a lawyer and a financial advisor. They both felt the store could manage the debt load with some temporary help from our friends and a bit of luck. My landlord, who is a decent man, will allow us to keep our first floor space, vacating only the second floor of the building.

The issue now is this: After we scale back the store, do we still have a viable business? I asked my business manager to crunch the numbers based on our projected sales for the next two years. He reported back that we do not have a sustainable business model. Given our current sales projections, we will continue to lose money.

This means very simply that we would need additional revenue sources/streams to make the store viable.

For many booksellers-certainly including me-this is our darkest hour. I know this sounds melodramatic, but that’s the way it feels to me in the middle of the night when I’m trying to figure out how I can possibly make this work.

If I can’t figure this out, the most realistic and responsible thing I can do is shut the store down and move on.

The question then becomes: What is the next version of a bookstore? This is something worth thinking about carefully. Like you, I want to live in a community that has many good bookshops. But then I’ve been spoiled living in Ann Arbor.

Whatever happens, I am filled with a sense of gratitude for having been able to sell books in this town for the past 29 years. It’s been absolutely wonderful.

—Shaman Drum Owner, Karl Pohrt.

For those who are interested, a pdf of the Great Lakes Literary Arts Center strategic plan is available online. And Karl can be reached at pohrt at shamandrum dot com.

As reported in Publishers Weekly,: sales at Borders fell by 10% in the third quarter to $693.4 million, resultiing in a net loss of $172.2 million for the period.

And in terms of being for sale? Well, that’s now a thing of the past:

Borders also announced that it is no longer for sale. Company CEO George Jones said that after completing a thorough review of its options, the company determined it was best “to remain as we are,” adding that he was “quite pleased” that the review is over and that Borders will remain an independent, publicly-traded company. The company still has the option to sell its Paperchase division to Pershing Square Capital, Borders’s largest shareholder, for $65 million. That option expires Jan. 15. The company said it is talking to Pershing about different financing arrangements.

In case you’re interested in buying some Borders stock, at this very moment, it’s listing for $0.98 on the NYSE, which is $0.26 higher than the 52-week low.

This is a great idea:

Amazon.co.uk has launched a new Literature in Translation store, highlighting hundreds of titles from 27 countries across the world. The site went live last week and is linked via the books homepage and the crime, fiction and poetry category pages The Bookseller

Can’t say it’s the easiest store to find, but that might be my faulty searches and the fact that I need some coffee . . . Nevertheless, here’s a link to the front page of the translation store.

Independent bookstores such as McNally Jackson, Quail Ridge Books, Talking Leaves, and others, have implemented similar ideas, creating a foreign fiction section and organizing the books by country/region. Similar to a special display in a store, Amazon is also highlighting books from particular authors and presses, which is a nice touch. (Personally, I think it would be great if there was a bit more editorial info included in these spotlights. An interview, a more complete description, etc., would go a long way.)

From my experience at Quail Ridge Books, creating a section like this worked really well in terms of increasing sales of translations, which is something Kes Nielsen, head of book buying, seems to believe in:

Sales of the genre had been growing in recent years. “By creating a dedicated Literature in Translation section on site, we are making it easy for our customers to discover a wide selection of great books by new authors from different countries that we hope they will enjoy,” he said.

“Customers will always respond to well written books, regardless of whether they were originally written in English. However there is also the appeal of reading fiction set in cities or countries that are either familiar based on travel or that are simply different to the traditional setting of most books, specifically the US and UK. It can make them all the more exciting to read.”

The one disappointing thing is that this is only on Amazon UK—not on the U.S. sister site. Sort of embarrassing that the original Amazon is a step behind . . .

I wondered when someone would speak out against Oprah’s endorsement of the Kindle. From the Vroman’s Bookstore Blog:

Unless you’ve been living under a rock or, I don’t know, focusing on the election or something, you probably know that Oprah is just crazy about Amazon’s ebook reader the Kindle. It is, in fact, her “new favorite thing in the world.” This is bad news for bookstores, as Amazon uses a special ebook format on the Kindle, one that only they can sell. In the past, Oprah’s book endorsements, in the form of her Oprah’s Book Club picks, have been a boon to bookstores everywhere, raising the profile of the titles and making bestsellers of authors like Dr. Oz and Wally Lamb. Most recently, her endorsement of The Story of Edgar Sawtelle helped boost sales during an otherwise slow month. That could all change with her endorsement of the Kindle. What happens to bookstores if all of Oprah’s fans start buying their books on the Kindle?

Earlier this week Joe Wikert completed his six-part series of posts (this links to the final piece, which has links to the first five parts) about how brick-and-mortar bookstores could better compete with online retailers (aka Amazon.com).

Taken as a whole, I’m not sure his suggestions would necessarily fix all the struggles of traditional bookstores, but some of these are really worth considering.

One of the suggestions I like is about creating a Chacha sort of website for answers about books that customers could access from kiosks in the store. (And outside of the store as well.) That would be a pretty cool way of getting info about books—especially more technical or travel guide-ish titles—and would address some of the bookselling issues at the chain stores.

Not to pick on the two big chains (though it’s obvious that’s who Wikert has in mind with this suggestion), but it’s as evident as a late-season Mets collapse that most employees at B&N and Borders are more “clerk” than “bookseller.” (This is something I plan on writing a long piece about either tomorrow or next week, since it ties into my ideas about the gulf between publishers and readers.) When I worked at independent bookstores (including Quail Ridge Books in Raleigh, which is praised in the comments section of the first post in Wikert’s series) the staff knew more about books than almost anyone I’ve met since. The group knowledge was unbelievable, and the books I found out about from my colleagues affected the rest of my life and career.

But it’s true that this isn’t the norm anymore. (Though it is at a number of indie stores.) And Wikert’s suggested site would be a cool resource.

Not so sure about his idea for a loyalty program (sounds a lot like an idea from the case study on Harrah’s casinos I read for business school last year), and the idea about selling used copies along with new is actually a practice that can be found at a number of independent stores, including Third Place, which is one of the greatest stores in the country.

The big drawback of this series is that it’s not looking at bookstores as a whole, it’s really only considering how B&N and Borders can compete with Amazon. So a host of issues/challenges are left out entirely.

That said, the last suggestion of widgets and browser add-ons is pretty interesting. And something that IndieBound could easily do for its members . . .

Not sure how I missed this when it first came out, but this piece in the Independent is fascinating:

House sales have plunged, automobiles have tanked, and credit is throttled, but Spain is experiencing an unprecedented boom in books. Once the nation that read fewer books than any other in Europe, Spaniards have become voracious readers, devouring more books than ever before.

Spain’s book trade has not only escaped the downturn afflicting the rest of the economy, but is spectacularly bucking the trend. Publishing houses say business last year broke all records, and they predict even better results for 2008. The sector was said to be euphoric [. . .]

Funny—“euphoric” is the last word that I would ever associate with publishers and/or any discussion of a nation’s reading habits. . . .

And these stats!

Even with the leap in literacy of recent years, Spaniards were slow to adopt the reading habit. Not so long ago, more than 50 per cent said they had never read a book, nor had one at home. Now 57 per cent claim to read regularly.

Everything about this stands in stark contrast to the situation here in the States, where Cody’s goes out of business and we’re constantly talking about the decline of readership . . .

Now that I’m going to be in the office until late-July, I’ll finally have a chance to start interviewing booksellers across the country about the future of bookstores and bookselling.

Coincidentally, I came across this article yesterday from The Bookseller (essentially the UK’s version of Publishers Weekly) about the “Reading the Future” conference that took place last week and “presented new consumer research into the reading and buying habits of 1,000 adults across the country.”

I haven’t read the entire study (it’s a mere $400 to purchase), but based on this article, the scope seems a bit different from the recent NEA Reading at Risk reports and similar “future of reading” studies that have come out in the U.S. in that the reported results of this survey focus more on how we’ll get and read books in coming years than the question of whether or not anyone will be reading.

Delegates heard from William Higham of agency Next Big Thing, which conducted the research. Higham reported that 56% of 18-24s think people will still be using bookshops in 20 years’ time. Looking deeper into 18-24 year olds’ reading habits, he found that 28% were favourable towards the idea of e-readers, compared to 9% of 65+ year olds, and 40% liked the idea of downloadable chapters of books, compared to 7% of 65+ year olds.

It’s unclear whether the 44% of 18-24s that were surveyed believe that a) no one will be buying books, or b) most sales will occur online, but either way this is a bit dismaying.

In terms of ebooks, these statements are rather interesting:

Speaking at a panel session after the research was presented, Transworld publisher Bill Scott-Kerr said the statistics about younger readers all pointed “to where we as publishers are going in the future”. He added: “We all know the book is a great piece of technology – you can’t drop e-books in the bath. But we as an industry are in a lot of trouble; we don’t know where we are going.”

“Should we follow the iTunes model of providing content and making money out of the hardware, like Amazon with the Kindle, or the Google model which is all about content? Looking at the level of indifference of 18-24 year olds has got to give us all cause for concern. They will be wanting to take a role in the devolution of content, and we must provide them with an environment to do it in.”

One of the big events at BEA was the announcement of the new IndieBound program of the American Booksellers Associaton. This will take the place of BookSense, a special marketing program that started ten years ago as a way of helping brand independent bookstores across the country.

As mentioned in the Publishers Weekly article a lot of the same BookSense features will persevere in the new program.

IndieBound will retain many of Book Sense’s most popular features, such as bestseller lists and monthly selections, although both will receive new names. The bestseller list is being rebranded as simply the “Indie Bestseller List,” while Book Sense Picks will be known as “The Indie Next List.” Teicher acknowledged that “some parts of Book Sense worked and some didn’t,” and the weakest link was the one to the consumer. “You ask 10 customers about Book Sense and nine will have never heard of it,” observed one publisher. By branding IndieBound, the ABA hopes to overcome that problem by emphasizing to consumers the value of independent businesses.

One of the points of emphasis with this program is the sort of “Read Global, Buy Local” mentality. The idea that buying from a locally-owned bookstore is better for the community than from a chain. (I totally agree with this.)

Anyway, that idea, in combination with the glum news about Borders, and a few conversations with booksellers, got me thinking about the state of independent bookselling and what might happen over the next decade.

There are a lot of people out there that know a lot more about this than I do, which is why I’d like to start running a series of interviews with booksellers about this very topic. To kick things off, I thought I’d lay out a few of my initial thoughts that came out of BEA and hopefully hit on some of the key issues that booksellers face.

For more than a decade we’ve heard about how Amazon and the chains have been forcing indies out of business, but over the next few years I have a feeling that there’s going to be a window of opportunity for booksellers to reestablish themselves. (Last year the number of independent booksellers in America grew, which I guess means that there is some empirical proof that I’m not completely out of my mind.) This is half-premised on the belief that Borders is on its way out. There are a few options for how the Borders situation can be resolved—continue muddling along by cutting costs, get bought by someone, get bought by B&N, go bankrupt—all of which will have a significant impact on the bookselling landscape.

Unless there’s a sudden windfall, one way or another, things are going to change at Borders. And based on the current economic climate and competitive strategy, these changes will be echoed, to a much lesser degree, by Barnes & Noble. There are a lot of B&N stores out there that exist solely to compete with the nearby Borders store. If Borders reduces its presence—either willingly or due to bankruptcy—I wouldn’t be surprised if B&N scales back a bit as well.

This immediately creates opportunities for local independent booksellers . . . assuming that people still want to buy books. (See endless reports and polls on the decline of reading in America.) But seriously, I don’t think the problem is the amount of people reading, but where they want to go to get their books.

When I was doing the B&N sales call (which went really, really well), I overheard a bunch of sales reps talking about how this fiscal year Amazon finally took over as their largest single customer. This is not surprising. Amazon has everything, it’s easy to use, it’s convenient, you can shop while working, right after you hear about some book during your drive home, etc. Amazon has advantages, that’s for sure.

But so do independent bookstores. There’s immediacy of purchasing (vs. waiting for what seems like forever to get your shipment), the ability to browse the physical object, intelligent readers to give recommendations, etc., etc. And since the “buy local” idea has gotten a lot of traction in our culture, there’s a viable, appealing way for booksellers to market their stores as stores. As anti-big box stores sentiments continue to grow, independent booksellers could grow as well.

Of course the advent (maybe?) of eBooks could screw up the whole system. If people don’t need physical books, they don’t need bookstores. But that’s decades down the line. (I hope?)

One big issue that jumps out at me is the next generation of booksellers. As Mitchell Kaplan casually mentioned in a conversation over the weekend, in many ways, bookselling is a young person’s business. In my experience, there are a ton of twenty- or thirty-somethings who populate indie bookstores across the country, passionately selling books because they believe in the higher ideals and can live on a very small salary. And as much as it sickens me to say it, that small salary is one of the huge problems facing bookselling.

It’s no secret that only a small percentage of people in the book business make a lot of money. Editors, mid-list authors, booksellers, translators, marketing assistants, literary agents, etc., etc., are all generally underpaid. Especially when you see what your friends are making as investment bankers or lawyers or whatever. (Sure these fields aren’t exactly interchangeable, but I’m sure you get the picture.) And frequently, as booksellers get older, start families, etc., either they get to the managerial level and earn just enough to survive, or they leave and start up a new career path.

The Emerging Leaders group was started specifically to address this situation and try and keep really talented people in the bookselling biz. Nevertheless, this is an industry based on dedication and staying motivated through frequently intangible benefits, such as great conversations with cool people, free books, time for creative thought and creation, etc.

I’m very hopeful about the Emerging Leaders program, and about the fact that people of my generation are really psyched about books, but from a cold, detached economic standpoint, there are potential “growing pains” in the near future.

Right now, what it seems like to me—as a partial outsider—is that most stores are owned/managed by people who started in bookselling in their twenties, but are now approaching spitting distance of retirement. (Not that there’s going to be a huge number of booksellers retiring over the next few years, but I get the sense that a lot of people are starting to think about what’s going to happen when they’re no longer there.) With real estate having exploded (bubbling and bursting), the crazy ass credit crunch we’re never going to get out off, and the weakening economy, I’m concerned (possibly unjustly) about what will happen when owners go to sell their stores. (They could always do what Karl Pohrt is doing and convert the store into a nonprofit literary center—something I’m definitely going to write more about in the future.)

Will there be a group of properly motivated and trained individuals ready to buy and take over these stores? People in a position to take advantage of the possible window of opportunity that may be coming over the next few years? I hope and believe so, but this seems to me to be a valid question. My generation is resourceful, but in a business that gets more expensive by the lease renewal, with ever-shrinking profit margins, I’m at least a bit concerned.

Anyway, all this is to say that I’d like to run a series of interviews with booksellers over the next few months to see what they think and to get a better sense of what the future may hold . . .

From PW Daily:

The anticipated cuts at Borders were announced this morning with the bookstore chain saying that it has eliminated a total of 274 positions.

The majority of the cuts came in its Ann Arbor headquarters where 156 jobs were eliminated, with the company reporting that the cuts occurred in virtually all departments such as marketing, IT finance and human resources. While some cuts came in the merchandise group no changes were made in the newly reorganized buyer/planner group. [. . .]

The cuts are part of Borders overall effort to reduce annual expenses by $120 million over the next 18 months.