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Wednesday, January 18, 2012

Beyond the Bookstore for Publishers

Yet another sign that it is time for stores to change many of their traditional ways of doing business.  A recent article encourages publishers to increase sales and profit through non-bookstore marketing, particularly in light of the trend toward decreased unit sales in print books from traditional outlets.   Here is an excerpt from the article:

“Given the choice, there are advantages to focusing only on non-bookstore marketing.  Here you can sell your content in any format – e-books, printed books, audio books or booklets.  You can also sell it in many more places, including retailers, libraries, corporations, schools and associations.  And in nonretail segments, book sales are sold on a non-returnable basis and you are generally paid more quickly.  If that were not enough, even more benefits accrue through special sales.” 
Here are ten reasons why the author says publishers should invest in the non-bookstore markets.  You can read the details of each recommendation in the article.

1) Compete in a marketplace larger in size than the bookstore segment.
2) Experience growth that is virtually limitless.
3) Take your titles to the potential buyers rather than waiting for them to go to a bookstore.
4) Reduce the competition.
5) Minimize discounting since buyers do not have immediate access to competitive pricing.
6) Sell books on a non-returnable basis.
7) Stimulate increased exposure. 
8) Increase your flexibility in negotiations
9) Improved cash flow, since some businesses purchase your products at list price.
10) Do what you do best.
Now I am sure many stores could articulate reasons back to publishers to encourage continued investment in the channel.  A couple obvious arguments come to my mind, however, that is not the thrust or focus of this posting.  The point here is that stores that want to succeed in the future must look at the trends and begin transitioning to new markets.  Continuing on a path to merely extend or defend what we have always done is a fast path down the spiral of decline.  We must rethink our value, or not be surprised when those who were once our partners are suddenly our competitors.  To paraphrase Wayne Gretzky once again, we must learn to skate to where the puck will be -- not where it is now or has been in the past. 


laura said...

Publishers produce the product. I'm a bit stumped as to how to compete if they won't sell to us (booksellers).
What other industry or manufacturer seeks to destroy their distribution channel?

Dr. Mark R. Nelson, MBA, CAE said...

Good question, Laura. Most companies today are engaged in multi-channel strategies. For publishers, this means pursuing new channels. While we may be the preferred channel for the old traditional product, that does not guarantee our place with new and future products. Aptara noted a couple months back that publisher's primary/largest channel for digital unit sales are their own portals. Thus, they become less producers and more distributors/retailers as well. There was an article in the Chronicle and Inside Higher Ed this morning too focused on institutional licensing models.

Based on remarks I have heard from various publishers, stores need to do more to convey their value proposition in new channels and products. If we conveyed the value proposition effectively, they would sell to us and through us. I honestly believe that we have some great opportunities in this regard, but the window of opportunity is closing. In this vein, it is perhaps easy to blame publishers for destroying the channel or shift perceived accountability elsewhere, but we have to step up and take some responsibility too -- at all levels of the industry. The future business will not be what the past business was -- we need to rethink our business models, pursue market share, and redefine or clarify our value proposition -- and in doing so recapture our relevance. Continuing to try to defend or extend a historical model or approach is an almost certain path to obscurity.

To be fair, many stores have not made it easy for publishers or new entrants to work with them on digital and other new product models. The resistance we have seen may seem like good business practice -- and it is in a traditional context with incremental changes. However, we are no longer in a traditional context or incremental change. We are talking about new products and radically different technologies and delivery approaches. Publishers are also threatened by disintermediation if they do not change their way of doing business. Our best opportuniities reside in finding ways in which we can add value in the distribution of the new products and services.