Long story short… This post is the result of a “conversation” with a person who is a Director of Merchandising/Advertising Sales at the world’s largest book and entertainment distributor.” He/she certainly seemed like an intelligent and thoughtful individual. Over the course of our chat I was hit with thoughts of: That’s great but what took so long to figure out that the biz should be focused on how the market (read: the guest) sees things; What about SalesForce.com or some other CRM for managing relationships with external vendors/clients; No wikis? No internal blogs? No off the shelf technology tools to share info across depts? It was difficult to believe that the world’s largest was stuck in the mid-90′s.
The real clincher was towards the end of this meeting when he/she was asked about the book industry also going digital (after watching their music distribution sales crash). The answer was something along the lines of, “Books are different. Sure it makes sense for reference materials online but other than that people want to hold books. I love books.” The articles in the NY Times (see below) were then mentioned and to that he/she said, “Well, my kids still read books. I don’t think books are going away anytime soon. There’s going to be room for all three formats. Print, digital and audio.” Mind you, somewhere in the middle of all that (denial?) he/she mentioned seeing Amazon’s Kindle and being very impressed.
While it’s no one wants to doubt the insights of someone with 20+ years of publishing industry experience let’s take a look at some of the facts:
1 – “First It Was Song Downloads. Now It’s Organic Chemistry” by Randall Stross (New York Times, 27 July 2008).
2 – “Literacy Debate: Online, R U Really Reading?” by Motoko Rich (New York Times, 27 July 2008).
3 – Amazon.com, the largest seller of print books in the world, is the inventor of the Kindle. Enough said. It anyone understand where print is going (and also has the market clout to nudge it in a particular direction) it is Amazon.
4 – Amazon.com also bought Audible.com (www.Audible.com) a couple months ago.
5 – #3 + #4 = Amazon isn’t exactly making pro-print moves. Nor are they in denial and/or fearful of the coming of digital books.
6 – There is NO WAY Amazon wants to be in the warehousing and shipping of books business. There is MASSIVE overhead in that and if they could shift to servers and hard drives they’d be far better off. Even having such orders dropped shipped is a pain in their butt when compared to digital. Regardless of how much they might love print, they have to be focused on what is best for their shareholders.
7 – Sony and others also have their version of a digital book “player” available. It’s only a matter of time before Apple tosses their hat into that ring too.
8 – It was explained that this said distributor was actually growing. But if they’re growing in shrinking segments than it probably means that they’re picking up volume from others that are closing, or at the very least struggling to keep up. Overconfidence under such circumstances can eventually be dangerous if/when the tide changes. The CD based music biz was actually pretty damn healthy pre-Napster, pre-iTunes, etc. And then the CD hit the fan.
9 – If the book biz is so healthy, why is Borders suffering? Why has B&N expressed a lack of interest in buying them?
10 – Microsoft’s XBox 360 platform is morphing into more than just a gaming platform that plays games via physical media. The mighty Sony and the PS3 is close behind.
11 – Netflix and others (with brains, deep pockets, no legacy systems and an intimate understanding of the power of the internet) are trying to use the internet to break into the movie download biz. Movie files are hundreds if not thousands the times the size of book flies.
12 – Print isn’t very green friendly. We’re all looking to cut back on the consumption of resources. Newspapers and magazines are already struggling (for other reasons) but as more and more people migrate to non-print the tipping point for print books can’t be far away.
13 – Even Dell has announced a new MP3 player and is expected to also introduce a music download site. It’s only a matter of time before digital books become part of someone’s growth plans aside from Amazon. Music downloading is already crowded and differentiation is few and far between.
By no means is anything on this list new or spectacular. It’s actually the fact that it is so long and so obvious in many ways that makes this distributor look like a sitting duck. The bottom line is that if my biz model was being attacked from so many sides by so many movers & shakers I’d be a bit more concerned about my bread & butter.
Hey, we love print (books, magazines, newspapers, etc.) as much as anyonel. Just like we love vinyl records and even CDs. But after seeing the physical music industry get run over by the consumer’s dash to digital everyone should now understand that what company management believes doesn’t matter. It’s the market that defines the need and where things will go. So if digital is: cheaper, easier to buy, more convenient, always available, always in stock, lighter, etc. than it’s hard to imagine print books not being hit sooner rather than later. With the control becoming concentrated in fewer and fewer hands the makings of another Goliath slaying is probably just around the bend. That said, we wish “the world’s largest book and entertainment distributor” the best of luck. They’re probably going to need it.
