WSJ: Investors Are Freaking Out About Barnes & Noble

[BearMountainBooks]

The lost sales are not the "free so I didn't have to pay." They are the "I didn't bother to buy anything on my wishlist because I picked up so many freebies this week." THOSE are the lost sales.

I've seen the threads, especially from people who just received an e-reader this holiday. They were hit with so many freebies--very visible freebies, their shopping has become "What's free today?" rather than, "I'm looking for a good book in genre x...what is out there...?"

It has even affected me. I almost always browse Books on the Knob and DailyCheapReads, but lately, I don't even need to. I've downloaded probably 100 freebies in the last month (and I'm fairly selective. I don't grab everything I see. I do sort and read reviews before even bothering with the freebies in most cases.) My wishlist? I'll look at it if I'm already on Amazon to buy something--there might be a cheap paperback to throw in the order. But I used to peruse Books on the Knob pretty carefully for bargains. At the moment I have so many freebies and the constant threat of more that I'm lucky to take the time to make sure a favorite author isn't on the bargain list (something I used to check for pretty carefully.)

As Fbone said--let's hope the retailers and those who have books for sale can last through this period. They are the ones with lost sales.

[fjtorres]

Originally Posted by BearMountainBooks

The lost sales are not the "free so I didn't have to pay." They are the "I didn't bother to buy anything on my wishlist because I picked up so many freebies this week." THOSE are the lost sales.

Ah, I see your position; the freebies crowd out the non-free book's mindshare.

It's possible.
But so far, it's not happening.
Paid ebook sales keep going up and for all the talk that "nobody" is making money in ebooks, a lot of people seem to be doing fine. Quarter by quarter, the dollar amounts grow and so does the size of the available book catalogs. And that ebook growth is outpacing the drop in pbook revenue at most of the BPHs.

I don't doubt that there are a fair amount of, ahem, frugal readers living off the freebies. Just as I don't doubt there is a fair amount of piracy out there.
But a lot of both is just hoarding and, just as every pirated ebook copy doesn't represent a lost sale for anybody, I don't think each and every freebie d/l corresponds to a lost sale for anybody, either.

All the publicly-available evidence so far suggests that the majority of readers do buy ebooks and that a good portion of the quality promo-ebooks result in increased sales for the author. Even the Price Fix Six seem to be doing okay despite their eroding ebook market share.

Whatever their numbers may be, it doesn't look like over-frugal readers are an industry-wide issue. It may come to pass or it may not.

And like I said, I wouldn't necessarilly take online chatter as representative of even B&N's customers, much less Sony, Kobo, or Amazon. The issue is worth considering but without actual data from Nielsen or another of the poll-takers...

After all, if it were really an issue, it is one that has a simple solution: stop freebie promos. As long as freebie promos continue, the signs I see say it is more of a solution (to obscurity) than a problem. So far.

[Fbone]

Originally Posted by fjtorres

All the publicly-available evidence so far suggests that the majority of readers do buy ebooks and that a good portion of the quality promo-ebooks result in increased sales for the author. Even the Price Fix Six seem to be doing okay despite their eroding ebook market share.

Whatever their numbers may be, it doesn't look like over-frugal readers are an industry-wide issue. It may come to pass or it may not.

Ebook revenues don't match up with the number of ereaders sold.

We have estimates of 14 million Kindles sold in 2010 and at least that many in the first 10 months of 2011. Add in the Nooks, Sony and Kobo. Can we say 40 million devices sold? The APA reported $807.7 million ebooks sold (20 publishers reporting) the first 10 months of last year. That's about $20 in ebooks per device. People with devices are reading on average more than 2 books a year so they are extensively reading public domain, library, freebies, or ebooks from non-reporting publishers. Add in unauthorized downloaders.

If all Kindle owners alone bought 4 NYT bestsellers last year at $12.99 each, sales from just Amazon would reach $1.4 billion.

And I am not figuring in Apple and all ebook apps.

[Blue Tyson]

Yes, but lots of those devices sold aren't to Americans, so won't be buying American books. So you can't assume all X devices are going to feed into US book sales.

If a Norwegian that only reads in Norwegian buys a kindle, sales of US 'Reporting Publisher' books from that device = zero, forever.

You are right about independent etc. though. Of the several hundred I bought last year, I think a handful only would get counted in US publisher reporting sales.

E.g. the other dozen would be UK or Australian publishers.

[BearMountainBooks]

Originally Posted by fjtorres

Ah, I see your position; the freebies crowd out the non-free book's mindshare.

It's possible.
But so far, it's not happening.
Paid ebook sales keep going up and for all the talk that "nobody" is making money in ebooks, a lot of people seem to be doing fine. Quarter by quarter, the dollar amounts grow and so does the size of the available book catalogs. And that ebook growth is outpacing the drop in pbook revenue at most of the BPHs.

I don't doubt that there are a fair amount of, ahem, frugal readers living off the freebies. Just as I don't doubt there is a fair amount of piracy out there.
But a lot of both is just hoarding and, just as every pirated ebook copy doesn't represent a lost sale for anybody, I don't think each and every freebie d/l corresponds to a lost sale for anybody, either.

All the publicly-available evidence so far suggests that the majority of readers do buy ebooks and that a good portion of the quality promo-ebooks result in increased sales for the author. Even the Price Fix Six seem to be doing okay despite their eroding ebook market share.

Whatever their numbers may be, it doesn't look like over-frugal readers are an industry-wide issue. It may come to pass or it may not.

And like I said, I wouldn't necessarilly take online chatter as representative of even B&N's customers, much less Sony, Kobo, or Amazon. The issue is worth considering but without actual data from Nielsen or another of the poll-takers...

After all, if it were really an issue, it is one that has a simple solution: stop freebie promos. As long as freebie promos continue, the signs I see say it is more of a solution (to obscurity) than a problem. So far.

I think one of the reasons Amazon resisted allowing Indies to go free for so long is because it IS an issue. With all those freebies, it cuts down on the other books sold. I'm guessing they weren't expecting the deluge of freebies that we see now (and this phenom hasn't been accounted for in any numbers because it didn't start happening until...Dec? I think.)

I honestly wonder if they will continue it past the first 90 days or if they will change the terms. It *has* to be cutting into sales. I know it is for a fact because my wishlist has totally languished and some of those purchases were ones I intended to make after getting Christmas gift cards. Turns out I just haven't gotten around to it. (So in this case it's probably more a pushed-out sale than a lost sale.)

Sales of ebooks are very hard to track. Indie sales aren't reported with the trad numbers (even though those are going up.) I get sent surveys from one of the tracking companies and I don't participate...I'm kind of private about that stuff and perhaps a tad on the lazy side with filling out the survey. It was rather LONG.

Personally, I think Amazon allowed indies into the Prime and free program to pressure more traditional publishers to get into prime and to do more promos. Now whether it will work, I don't know. From a reader standpoint I'd like to see it. From an author standpoint, it could further cook my goose!

Yes, people are still buying books, but all of this industry change is going to push prices down (that's not a bad thing so long as it doesn't start also changing the selection.) And setting expectations for free can be hard to undo. If it happens to cost B&N or other retailers to shut down, that is also a bad thing.

[fjtorres]

Originally Posted by BearMountainBooks

Personally, I think Amazon allowed indies into the Prime and free program to pressure more traditional publishers to get into prime and to do more promos. Now whether it will work, I don't know. From a reader standpoint I'd like to see it. From an author standpoint, it could further cook my goose!

Yes, people are still buying books, but all of this industry change is going to push prices down (that's not a bad thing so long as it doesn't start also changing the selection.) And setting expectations for free can be hard to undo. If it happens to cost B&N or other retailers to shut down, that is also a bad thing.

Just out:
http://phx.corporate-ir.net/phoenix....rol-news&nyo=0

http://www.mediabistro.com/ebooknews...3-weeks_b19352

"Some animals are more equal.."
Some people will get paying customers, some will be left unnoticed.
Quality and luck matters.
Hard work and self-promotion doesn't hurt, though.

[BearMountainBooks]

Originally Posted by fjtorres

Just out:
http://phx.corporate-ir.net/phoenix....rol-news&nyo=0

http://www.mediabistro.com/ebooknews...3-weeks_b19352

"Some animals are more equal.."
Some people will get paying customers, some will be left unnoticed.
Quality and luck matters.
Hard work and self-promotion doesn't hurt, though.

There's no doubt he has a lot of momentum behind him. Thanks for the link. I wondered how he was doing since he went Select and also signed with Amazon. I know his books were featured in the books of the month under X and I think he did a couple of his for free during December.

Whether he does well because of freebies or in spite of them, there's no way to know. Although from his blogging, I think he's a fairly big supporter of the feature.

[Fbone]

Originally Posted by Blue Tyson

Yes, but lots of those devices sold aren't to Americans, so won't be buying American books. So you can't assume all X devices are going to feed into US book sales.

If a Norwegian that only reads in Norwegian buys a kindle, sales of US 'Reporting Publisher' books from that device = zero, forever.

True, but I was very conservative with my numbers. Two analysts have estimated 40-50 million Kindles will be sold in 2011 and 2012. North America has they say 80% of the market. That's still a lot of devices.
Plus add an unknown number of Nooks, Sonys and Kobos.

The hardware manufacturers need people to buy books from their stores to help defray the ongoing ereader production and development costs.

[BearMountainBooks]

Originally Posted by Fbone

The hardware manufacturers need people to buy books from their stores to help defray the ongoing ereader production and development costs.

THIS.

[T.D.02809]

This news is disappointing if indeed B&N fails.
What does it take to be successful or at least functional bookstore today?
I visit the only local B&N weekly, sometimes more than once a week.
There were 2 Borders and another B&N last year at this time, now no more!
Electronic tech is indeed the future I have accepted with reluctance. My Kindle 3 has become indispensable now. YET I still go to a brick and mortar store. Why? Because I enjoy the browsing, discovering new titles and new authors and new magazines and newspapers!
How else would I know of new item? Sure I can browse websites it is yet to be rewarding for me.
It is not like McDonald's advertising new hamburger or Gillette advertising a new razor.
The only way to know is to be present on site.
To be allowed and to be able to find a specific item is great.
To be allowed and to be able to find an unknown item is great!
Without brick and mortars how is that to happen?

[pidgeon92]

Originally Posted by T.D.02809

Without brick and mortars how is that to happen?

Happens to me every day, right at my iMac. I see book recommendations on news sites, blog sites, forums like this, Goodreads, Amazon, etc. I would estimate that I add at least 5 books to my wishlist per day. If anything, I have wishlist overload.

[BearMountainBooks]

Originally Posted by T.D.02809

This news is disappointing if indeed B&N fails.
What does it take to be successful or at least functional bookstore today?
I visit the only local B&N weekly, sometimes more than once a week.
There were 2 Borders and another B&N last year at this time, now no more!
Electronic tech is indeed the future I have accepted with reluctance. My Kindle 3 has become indispensable now. YET I still go to a brick and mortar store. Why? Because I enjoy the browsing, discovering new titles and new authors and new magazines and newspapers!
How else would I know of new item? Sure I can browse websites it is yet to be rewarding for me.
It is not like McDonald's advertising new hamburger or Gillette advertising a new razor.
The only way to know is to be present on site.
To be allowed and to be able to find a specific item is great.
To be allowed and to be able to find an unknown item is great!
Without brick and mortars how is that to happen?

Browsing online is a totally different experience. I missed not going to stores at first, but my local B&N is very small so their selection seemed to be reduced every time I visited. If I had them order something for me it took two weeks. If I pre-ordered through them, they usually had the book on the day of release or at most two days later. The trouble is that Amazon can have the book on my doorstep day of release. Once in a while they miss and it's a day late. My odds and customer service has proven better with Amazon.

Of course with no competition, how long can I expect that to last? One wonders.

There is a joy to perusing shelves and shelves of books. Or finding a stranger who has a book in hand and saying, "Hey, I've read that. It's awesome." (That sort of happens online, but not quite the same way.)

I do hope B&N makes it and does extremely well. Competition breeds a better experience for all of us (author, reader, retailer, investor, community.) But I don't know if it's going to happen. They've had a steep hill to climb for a while and people are getting more and more used to shopping online.

[Kali Yuga]

Originally Posted by T.D.02809

This news is disappointing if indeed B&N fails.
What does it take to be successful or at least functional bookstore today?

What does it take to be a functional record store today?

Originally Posted by TD

To be allowed and to be able to find an unknown item is great!
Without brick and mortars how is that to happen?

By reading reviews, "browsing" online bookstores, and downloading samples.

But the fact is that people are less and less willing to pay the premium, in terms of money and time, to patronize physical bookstores.

Believe it or not, the world will survive this transition.

[BearMountainBooks]

Originally Posted by Kali Yuga

What does it take to be a functional record store today?



By reading reviews, "browsing" online bookstores, and downloading samples.

But the fact is that people are less and less willing to pay the premium, in terms of money and time, to patronize physical bookstores.

Believe it or not, the world will survive this transition.

The weird thing is that record stores are making a comeback. We saw one not long ago and went in. Apparently vinyl is "retro" and cool. We were actually looking for a turntable to replace ours (we have a lot of vinyl) Turntables cost more now than 5 years ago. People are selling them from their closets for 100 or more. My husband actually works from vinyl to create digital copies (for himself). But see, what is, is not and what once was, might be again and it goes round and round.

[fjtorres]

Originally Posted by BearMountainBooks

The weird thing is that record stores are making a comeback. We saw one not long ago and went in. Apparently vinyl is "retro" and cool. We were actually looking for a turntable to replace ours (we have a lot of vinyl) Turntables cost more now than 5 years ago. People are selling them from their closets for 100 or more. My husband actually works from vinyl to create digital copies (for himself). But see, what is, is not and what once was, might be again and it goes round and round.

Record stores never quite went away.
What happened was the big chains folded, the regional players folded, but the boutique Indies who lived off audiophiles survived. They had a clientele and cattered to it. When volume markets go away, specialty remains.
(You can still buy buggy whips today, you know.)
http://jedediahsbuggywhip.org/services.nxg

I expect a similar end-point for pbook stores circa 2025 or so.
The smell fetishists alone should be good for a few thousand sales a month per store in, say San Francisco (pop 700k). Scale from there to see how many pbookstores most cities will be able to support.

My all-time favorite Bookshop was Moonstone Bookcellars in Washington, DC. It was literally a cellar under a barbershop a couple blocks from the White House. They carried nothing but SF and fantasy, walls and walls worth, at a time when the chains of the day carried maybe one rack. They stocked backlists on-site and did a healthy business stocking foreign editions.
I always stopped by whenever I visited DC. They'd been there for decades, apparently. Then one trip, in the late 80's, they were gone. Done in by Borders and B&N.

Times change, consumers adapt.
The sky isn't falling; it's just a t-storm coming.