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| "I have many skills..." |
Originally posted on
Blogcritics as "How Amazon Killed Barnes & Noble, and Why We Don't Care."
The year was 2010.
Stephen Riggio, then
CEO of Barnes & Noble, heralded the company's entry into the
epublishing world. In a breathless announcement, Riggio euphorically
proclaimed that Barnes & Noble would top the 18% mark in e-books
"overnight." Not to be outdone by his own enthusiasm,
Riggio predicted that Barnes & Noble would earn better margins
from e-books than print books. Its booksellers would become, in his
words, "e-bookevangelists."
Beware of all
enterprises that require new jargon.
Today, even as I write, Barnes &
Noble is crashing and burning. According to
CNET, the company's
earnings slumped an astonishing 63 percent, from $150 million last
year to $55.5 million this year. The culprit? Nook.
Over the last quarter, Barnes &
Noble watched in horror as Nook sales, their e-book division,
plummeted 26%, with losses of over $190 million. It was like watching
Icarus fall out of the sky. Stephen Riggio's dream of “overnight”
success was so far off the mark, one had to wonder if he was high
when he made his announcement two years ago.
Riggio wasn't high. In fact, Nook is a
great e-book reader. Anyone who has worked with Nook's .epub files
can tell you they are infinitely better than the cumbersome .mobi
files used by Amazon's Kindle. Epub files produce a nice, cleanly
formatted page that looks just like a book. Mobi files look just like
a mess. But, as every entrepreneur knows, better products do not
necessarily lead to better sales. So, where did Barnes & Noble go
wrong?
Where B&N went wrong
Barnes & Noble had a better
product, a better reputation, and a farther reach than anyone else in
the book selling business. The problem was that Riggio misjudged –
very badly – how to handle the burgeoning business of
self-publishing.
With the advent of epublishing, writers
who could never hope to see their books in print could get their work
to readers without the time-consuming, and usually fruitless, task of
trying to snare an agent, followed by the even more frustrating job of
trying to hook a publisher. With epublishing, writers could simply
upload a file, set a price, and voila! Instant publication. What's
more they could do it anywhere, any time. No deadlines, no delays. An
equal draw was that writers who epublished could completely control
their work. With the elimination of pesky editors who demanded “show
don't tell” and required the proper use of apostrophes, everything
that went on or between an e-book's cybercovers was entirely up to
the writer. To add icing to the cake, writers who epublished got to
keep 70-80% of their royalties. Compared to the measly 10% (and that
was on a good day) meted out by print publishing houses, it was a
no-brainer.
According to
Bowker, there were 211,269
self-published titles released in 2012, up from 133,036 in 2010. This
surge in self-publishing, owing in large part to e-books, represents
not just people “living the dream,” but an enormous business
opportunity for anyone with the ability to turn other people's dreams
into their hard cash. Barnes & Noble, with its gentlemanly rules
of conduct and brick-and-mortar mentality, simply had no concept of
how to corner the market. Amazon did.
The coup de grâce - Amazon's KDP
Select
Amazon has always enjoyed the top rank
in online sales. If you want to buy a book, any book, chances are
you'll find it on Amazon. The “beauty part” is that, unlike
brick-and-mortar stores, Amazon has minimal stocking requirements.
Anybody can sell a book. Amazon merely takes a percentage.
So, when e-books came along, Amazon was
already familiar with the rules. Writers could put their e-books up
for sale much as they did their used print books. Amazon would take a
percentage, and, additionally, provide delivery. Barnes & Noble
did the same thing, but the difference – and this is crucial –
was that if you enrolled in Amazon's KDP (Kindle Direct Publishing)
Select program, you got to give your book away. The catch: You
couldn't put your book up for sale on any other site for a
(renewable) 90-day period.
Writers quickly discovered that giving
an e-book away for free was the fastest, cheapest, and easiest way to
build a readership. For the popular genre writers, such as romance
and mystery/crime, it was a dream come true. Books in popular genres
could rack up 20,000 to 30,000 downloads in a single weekend. Numbers
like those would not only be considered a wild success in the print
publishing world, they would be virtually impossible. Publishers
rarely promote first-time authors.
Cottage industries have sprung up
around the KDP Select phenomenon. Numerous websites will not only
post which Kindle books are free on any given day, but will review
them, and even send daily free titles to your inbox. There is no
denying the appeal of getting something for nothing.
For writers, and for Amazon, it is a
win-win situation, because free days are fantastic promotional tools.
Invariably, free days lead to increased sales. And for those writers
who simply must hold their precious darlings in their hands, Amazon
also provides print-on-demand. Amazon’s CreateSpace took first
place in the self-publishing world last year with 57,602 new titles.
Amazon is happy. Writers are happy. Customers are happy. Everybody is
happy.
Except Barnes & Noble. Which is
dead.
