Borders is Bankrupt. Who’s Next?

02.22.11 | 3 Comments

So the long-anticipated Borders bankruptcy has finally come to pass. Too bad, really, because despite some of its shortcomings, Borders was a really good store. I’ve been shopping at one Borders or another since I moved to Atlanta in 1992, and began shopping at the Roswell Road store.

Back then the chain bookstores were Waldenbooks and B. Dalton’s, typically housed in the local mall, and limited in size and inventory. These quickly became obsolete as Borders and Barnes & Noble began opening the Wal-Marts of bookstores.

That’s an important note – despite its upscale presentation, with the comfy chairs and the cappuchino cafe, Borders was essentially a warehouse store that competed primarily on the size of its inventory, and to a lesser extent on price. In modern retailing you either want to be at the top, selling luxury goods, or the bottom pushing commodities, and there’s not much of a luxury market in book.

So I personally think Borders had a viable business plan, except for some extraordinary bad luck. By the late nineties, they were faced with a new rival, one that stocked every single book in print, and was a close as your home computer. Amazon, naturally.

Since becoming the major player in bookselling, Amazon has also been the prime mover in the e-book revolution. This turn of events has made it easier for authors to take their books directly to readers, threatening another segment of the book industry: publishers. Some well-established authors are electing to reject their publishers’ offer of e-book royalties and go independent. This may be a great move; it may be a terrible one. But it has to have the publisher worried.

That’s because one of the things the Internet is great at is disintermediation – cutting out middlemen. Books are produced by writers, not publishers, and they’re sold to readers, not bookstores. Those segments are just itermediaries, and technology is making it easier to bypass them all the time.

What does this mean? For one thing, it means that now I can get books electronically that I would never have been able to get in print, because their small sales would not be profitable under the old model. I hope this trend continues; if it does I may even have to break down and buy a reader.

But as I’ve said before, I like books, the physical feel, the smell, the heft. I like bookstores, and can spend hours browsing there. And I like any publisher that can bring me the books I want. So I worry about the future of publishing. It will bring many benefits, I’m sure, but I hope it doesn’t bring along too many drawbacks with them.


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