The Sky Is Falling… Finally…And Again…
Ever since the beginning of the ebook revolution, and then the collapse of the poorly run Borders, Chicken Little has been running around saying the sky is falling when it comes to Barnes&Noble.
It wasn’t.
For years B&N was fine, but clearly having issues and going the wrong way and not responding well at all to disruptive forces in publishing. (Huge understatement there.) But it was a sound business until one day this last year, it wasn’t. The bad management, too many losses, no direction, and too many CEOs finally caught up with it.
Now some reports have B&N living on a $750 million dollar loan that can’t be under good terms, and other reports now have it officially for sale. (That is difficult to parse out at best because of a few owner interests.)
If B&N defaults on that loan, the company will shut down faster than Borders did, and for the same basic mismanagement reasons.
And I seriously doubt anyone will buy them. Can’t see a reason for anyone to take over those massive mall leases and aging inventory at this point. Again, same exact issue Boarders had. And if the major publishers start cutting off B&N credit, nothing left but the clean-up.
At one point it was thought the folks who own Kobo could take it, but they are now with Walmart, a much better solution. It has been rumored that Amazon could grab it, but why would they bother with all that old stuff when they can build hundreds of new stores for less money?
I can be wrong. I follow the reports and stock reports, but I have no inside information other than watching history as a guide.
This can’t be blamed on ebooks, Amazon, or anything but horrid company management in a disruptive time. I’m not going to bother to get down into the many hundreds of details pointing to bad decision after bad decision. Many of those have been reported widely.
But what I want to note is that once again The Sky is Falling. This time from all the people saying that traditional publishing will die with Barnes&Noble.
Uhh, no.
Will a ton of authors who have stuck with traditional publishing against all logic get hurt? Yes. But no worse than they are already hurting themselves by selling all rights for the life of a copyright.
And through an agent who will steal from them at first chance.
Will entire book lines vanish? Yes. No great loss, actually, after the short-term pain to a few authors who needed to break lose anyway.
Folks, these traditional publishing companies are not really based anymore in their foundations on selling and distributing books to readers. That should be scary evident by now to even the slowest writers out there. Just as one example, the companies have no sales force, but instead depend on the writer doing the work, just as indie writers do. That’s only one bit of evidence.
Nope, these major international publishers rely on the purchase of IP for their bottom line accounting. They are, in essence, copyright squatting.
This has been going on in art, music, and Hollywood for a very long time, folks. Just finally, with the new IP valuation methods for fiction copyright, copyright squatting is coming into play in publishing. (Copyright can be depreciated for tax purposes, folks. Forever. Just saying. Buy a book for $5,000 advance, appraise the future value for 70 years after the author’s death at a half million, put that value on the corporation books and then depreciate it. It is slightly more complicated than that, but not much.)
And the big corporations still have lots of outlets for their scam publishing operations to continue to pretend to sell books to suck in the new IP. Amazon and other online stores are now the largest outlets for traditional books, both electronic and paper. And indie bookstores are growing in number faster than weeds.
The bottom line… B&N going down or getting sold will be a blip in a disruptive time in publishing. Traditional publishers will keep having the ability to take copyright from writers, pretend to publish it, and then use that IP to keep themselves afloat just fine.
And indie writers and publishers will just keep on going to the bank and writing the books they want to write and actually caring about the readers, something traditional publishing and B&N long ago forgot how to do.
B&N has an uncertain fate at the moment, but just remember, the sky isn’t falling in publishing no matter what happens to that chain of stores. Publishing, thanks in large measure to the stability now of the indie publishers, will just keep on giving readers the stories they are looking for.
I just wish more traditionally published writers would see how the world has changed this century and save their books from a life of living on a corporate accounting balance sheet and not in a reader’s hands.
You could have titled this post “A Brief Lesson on IP..” Excellent.
“Copyright Squatting.” What a great descriptive, self-explanatory phrase.
My husband was part owner of a high-end mail order company. Their most valuable asset, the one the banks used as collateral for business loans was not their equipment or lovely, expensive inventory, it was their mailing list. Yup. A list of names and addresses. Mail order’s version of IP. Your copyright has real value folks, never ever doubt that.
It’s part of the retail apocalypse currently occurring in all retail sectors. Book publishing is just a tiny part of a much larger story.
The one thing I really miss in this new world of publishing is the mass market paperback: the kind of book you can put into a back pocket, hold with one hand while eating lunch, leave on the blanket at the beach without worry about someone stealing it or getting it wet or having sand kicked in it, and lend to a friend without TOO much worry about what they’ll do to it.
I know. I know. EBooks are the new equivalent to mass market paperbacks. It’s like pining for the buggy whip. It had its day and if the new publishing paradigm can’t do everything a buggy whip did, there are other advantages. Carrying whole libraries with you in eBook form is the big one. And not nearly the amount of waste as there was in coverless dumping of unsold books (well, a different kid of waste when the eReader dies and you have to dispose of it like toxic waste because of the heavy metals). And sure, trade paperbacks are fine – basically the cheap version of harcovers at – but they’re still expensive and don’t fit into a pocket.
Heh. This, from a guy who pledged the lifetime eSubscription to Fiction River. I might whine about simpler times, but I *am* adapting.
And the new industry is adapting as well. It is possible for indies to produce MM paperbacks. And the formatting is coming around to make it easier as well. So they will never be a segment like they were due to no distribution, but as a form they are coming back slowly.
Dean said: It is possible for indies to produce MM paperbacks.
Where? How?
Lol JM, I’m actively curating a perfect 400 title sci/fi paperback collection right now. Just finished up Dune, going for McCaffrey’s Dragon books next. It’s a fun cheap hobby.
Wow. I’m speechless. I’m sad also because I know an awful lot of people still working towards their tradpub dreams, querying agents, rewriting for agents, etc.
I’m no soothsayer, but all signs point to that sort of thing continuing despite the looming collapse of Barnes and Noble. It’s a sad thing, to see people on the query go round. And once they are on it long enough it’s hard to get them out of it because they feel they’ve sunk so much time and effort into it they have to succeed at it or it feels like a failure.
Can you imagine? Indie pubbing your book, getting some readers, building up your career bit by bit book after book but have that feel like a failure because an intern in New York never tapped you on the head?!
I know I’m ranting her a bit, it’s sad though. Like you said. Very sad.
Every time I walk into a B&N, which is, of course, to browse for books to then buy on my Amazon app while in the store, I think of dozens of small, seemingly commonsense changes I’d make to improve the franchise. “Crazy” ideas like, I don’t know, matching the prices ON YOUR OWN website! How about stop pretending to be a toy store or leather journal store or vinyl store? They have an advantage in that young YA readers prefer print books and still like to browse at malls, yet they don’t expand that section. I could go on an on. I agree with you, Dean, that this company was ran into the ground regardless of outside forces. Still, a footnote to your post is that more indies ought to publish wide, too, because I can foresee Amazon getting so powerful that their self-pub terms become closer to traditional publishing, or worse. As it is, they already have a very broad TOS which allows them to screw authors at any time and for any reason.
Shame too, especially in areas where there are no indie bookstores. If B+N were to pack up shop, it’s 45 minutes to the nearest indie book store for me. Many in rural and suburban areas will have to settle with going to the big box store with it’s paltry selection of books. It’s going to hurt traditionally published authors a lot more than the indies, since they have the visibility advantage in a book store. This is really going to crush the authors who dream of being in a bookstore shelf and I feel for them.
I saw a blog post last year (no active link at the moment) from another author who made the indie jump a few years ago, predicting that most non celebrity or high profile authors will be dropped from publishers soon, and those authors will either be forced to play the indie game or bow out of writing altogether.
Well, they may be getting some kind of credible ROI (Return on Investment) on those 5K advances – averaged out over the actual sales from books that hit. But the ROE (Return on Equity) on an imaginary capitalization of 500K is going to be very poor without sales to back it. You can inflate the books any way you want, but without good old fashioned income, it doesn’t work out. I remember a similar bout of insanity during the .com boom. People kept talking about the “new economy.” I kept reading income statements. Vindication was both brutal and widespread. Then came CDOs.
You can’t invent income – it has to actually exist. Overvalued IP that fails to generate revenue will catch up with publishers who continue to indulge this fantasy. In fact, it probably already has.
Damn, Mike, I wish like crazy you were right on this. Sadly, Hollywood and music companies have been doing this for going on fifty years now and it has only gotten worse. It has only reached publishing in the last ten years or so. And it sadly has nothing or little to do with income or sales. All corporate valuation. There are more companies on this planet that don’t have a dime of sales but are valued highly than companies that actually have sales, let alone positive sales.
But all that corporate stuff is beside the point. The real deadly aspects of IP valuation is author estates and the various ways IP is being valued now. That 70 year clause is a blessing and deadly in the same breath.