Thursday, December 29, 2011

2012 Digital Perspectives: The Bookseller and Librarian

We have written a series of short articles titled, ‘2012 Digital Perspectives?’ which we shall publish this week. These will look at what we believe are the short term issues, challenges, potential game changers and outcomes across the digital publishing value chain.

We have looked previously at digital publishing from the author and consumer perspectives and today we look at the customer facing Booksellers and Librarians. It’s the same house but we shall see yet again different perspectives.

The decline of the physical High Street model has continued in 2011 with the chains suffering the greatest demise. The economies of scale and scope once enjoyed by the brick and motor chains has continued to migrate online and physical shelf space has been replaced by more accessible virtual shelf space.

As ‘Rome continued to burn’, the Media continued to talk up the change in consumer shopping.

Bookshops will survive and will continue to sell books, but there will be fewer of them and they will have to start to rethink what the sell, how they sell and to whom they sell. They will have to break out of the ‘low risk’, sale or return model and start to sell all books not just front list and new. There will be less safety and more risk as they increasingly have to learn to buy firm and sell through.

However, the greatest immediate threat to the High street comes not from online but from the retail shed; the supermarket, hypermarket and retailers, for whom books are just one of many product lines where they can discount and demonstrate value. Any bookchain that believes that it can compete with the likes of Walmart on price and top titles is at best naïve and at worst doomed. The Asda £1 book sale will no doubt be repeated again this year and the range of titles on offer will have broad appeal. With books cheaper than greeting cards, its about time someone stepped in and said, 'Enough!'

The retail discount wars we lived through in a different retail sector, taught us that the only winner in a discount war, is the one with the deepest pockets and the greatest resolve. Bookchains thought this was them, but now have to realise it isn’t any more. The value pricing trick is to move from deep discounting to ‘everyday low pricing’ which is not simple.

Help for UK independents could come from the government and their determination to preserve the High Street. Two steps that would make a significant difference would be the removal, or levelling, of the charity shop status and a reduction, or freezing, of small shop business rates. Irrespective, 2012 will be yet another year where many independents disappear, but it will also be one where many find their retail flair and survive.

We do not see a viable independent digital model today. Rather than build a viable digital co-operative distribution repository and service, the associations have chosen a 'quick fix' and one that merely gives away store brand and community to white label aggregators for a small commission. Other than in a superficial manner, this is not going to engage independents with the digital market and its consumers and is not sustainable for the future.

Barnes and Noble may have created a successful digital business, but their physical one is creaking. They achieved what they have online and digitally by tacking control and owning their own repository, distribution and platform and turning their back on their previous white label arrangements.

Another group that failed to grab their own destiny were the public libraries who in the main rolled over and gave the business to the likes of Overdrive. The libraries still retained their members but the service was effectively becoming outsourced.

Who needs library buildings in a digital world?

We have finally seen the conflict that we envisaged between ‘free to loan’ versus ‘pay to own’ digital models. It was obvious that public library digital lending was going to upturn the commercial tables and relationships that had been neatly separated by the constraints of the physical world.

Google may have been tied up in their audacious land grab of the GBS and library service, but others have stepped in.

Amazon’s partnership arrangements with Overdrive blew the doors off the library hinges and all of a sudden the digital issues became visible. Amazon and B&N’s digital lending programmes came out of the shadows and now threaten to even blow away the library and certainly force it to be redefined.

The reality is that digital book lending and rental is the future and a great opportunity for all. The challenge is to acknowledge this and respond quickly and positively to make it economically viable and rewarding for all. Spotify’s and Netflix’s relentless progress should have taught us all that digital on demand is both viable and potentially game changing. Also anyone who believes that a digital music and film files are inherently different from a digital book files, needs to now think again.

The digital Libraryworld has the potential to be a big winner and vehicle to promote both community and reading, but will publishers allow that, or will they attempt to force the digital genie back into the lamp and only accept change tied to their old commercial terms.

We must look close at the history of the public library and recognise that it is still relatively young and that both library and retail change is inevitable.

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