Will the Book Business Survive Borders Collapse?

The surprise of the holiday season was the sudden news that Borders–the limping-along-on-life-support book chain–had suddenly and unexpectedly run out of cash. The first business day of the New Year brought the decision to fire the General Counsel and Chief Information Officer as the company prepares to negotiate with vendors. The end is clearly near for country’s second biggest book chain. But the question isn’t whither Borders but whether the loss matters much to books or the publishing business.

Barnes and Noble is busy claiming the all-important Christmas selling season had improved its same store sales by 9.7% in late 2010. We’ll have to wait to see what those numbers really mean but some substantial component of that rise is going to be Nook device sales.

Although Borders decline is a measure of shifting retail channels as books move away from being sold in bookstores to online and big box retail sales, it is also a sign of the rise of e-books. The Nook probably can’t save Barnes and Noble. But not having a electronic reading device surely hurt Borders. There are no accurate numbers for ebook sales but all accounts suggest that e-books own around 10% of the US market and will likely rise substantially again this year. (That’s another reason to write Borders off.)

Also today, publishing’s trade organ Publishersmarketplace.com, published some numbers from Bookscan on the overall book market. Bookscan recorded 702 million books sold in America during all but one week of 2010. Of those books, 10.5% were copies of the top 200 titles. That means the average sale for a top 200 title was 368,550 copies.

If you were one of those lucky authors, you probably made somewhere around $1.3m from your book in 2010 alone. And though it’s true that few authors made the average, that’s good money for any medium. More to the point, these figures only apply to physical book sales.

According to Publishersmarketplace.com’s cagily written report, the 4.4% decline in overall physical book sales across the industry (in other words, book retail stores dropped more than 12% and discount stores rose 11% leaving a shortfall in the overall books sold) was more than made up for by the electronic sales.

So in terms of the number of books sold, reading is on the rise in America. That won’t save the book store but doesn’t mean the book itself is going extinct.

Sources:

Two Executives Leave Borders
by JEFFREY TRACHTENBERG
January 4, 2011; Wall Street Journal

http://online.wsj.com/article/SB10001424052748704199504576060182112033172.html?KEYWORDS=borders+books

The Year In Sales: Print Sales Decline Less Than eBooks Gained, As Retail Market Share Is Hit
by MICHAEL CADER
January 4, 2011; Publishersmarketplace.com

http://www.publishersmarketplace.com/lunch/archives/007255.php

Category: Think Tank

American University Political Campaign Training Class

This is really depressing: click for video See also: Discussion on Lobbying & the Regulatory Process Discussion on Political Fundraising Discussion on Lobbying Rules & Regulation Excerpt: American University’s Campaign Management Institute hosts a training program for people interest in working for or running political campaigns. The two week program includes a series of seminars…Read More

Category: Politics, Regulation

According to the Fed, it’s everything but inflation

The FOMC minutes from the purposely boring Dec meeting after the major criticism they received after the Nov one did not reveal much new news but they gave their opinion on why rates rose after their intentions to have them remain low. They think “investors reportedly revised down their estimates of the ultimate size of…Read More

Category: MacroNotes

2010 Year In Review

Via Daily Infographic > click for ginormous graphic

Category: Digital Media

The Singularity and Facebook

Kevin Ferry Chief Market Strategist Cronus Contrarian Corner www.cronusfutures.com ~~~ In 1993, after digging 22 kilometers of tunnel in Texas and spending $2 Billion in taxpayer funds, the construction of the Superconducting Super-Collider was canceled. Another 62 kilometers and $8B more was needed to take a peek at the beginning of time. Cern, on the…Read More

Category: Think Tank

Long Term Stock Market Growth (1871-2010)

I was kicking around some of the outstanding charts at Visualizing Economics, when these two below leapt out at me. The first chart shows the long term growth of the US stock market, using a smoothed exponential trendline, while the second adjusts the overall chart using a log scale. As I look at these two…Read More

Category: Markets, Technical Analysis

How They Deal With Snow in Japan

Attention Americans: THIS is how you deal with heavy snow. Notice the expensive equipment; the high paid staff. You want your streets cleaned whenever it snows? Step up and pay the man, you tax-bemoaning, private sector-worshiping, aphorism-spouting ‘tards. If you want to contract this out through a competitive bidding process to private contractors, I don’t…Read More

Category: Current Affairs, Weekend

Putting a Price Tag on Facebook

~~~

Source:
Why Facebook Is Such a Crucial Friend for Goldman
PETER LATTMAN
NYT, January 3, 2011
http://dealbook.nytimes.com/2011/01/03/why-facebook-is-such-an-important-friend-for-goldman-sachs/

See also:
Why you shouldn’t ‘like’ the Facebook deal (Marketwatch)

Category: Venture Capital, Video

On Mark-to-Market

I love this quote: “Next time you hear a banker denounce mark-to-market rules, ask if he runs his business that way. Will he offer you a mortgage loan based on what you think your home should be worth, which you can repay only if you make a lot more money than anyone will pay you?…Read More

Category: Credit, Really, really bad calls

Goldilocks in China!? Euro Zone CPI heats up

Soft landing hopes in China after the moderating manufacturing indices over the weekend helped to send the Shanghai index higher by 1.6% and that set another positive tone for the rest of the region and that spilled over into Europe. However, most European bonds are trading lower after Dec Euro Zone CPI rose 2.2% y/o/y,…Read More

Category: MacroNotes