Yes… Barnes and Noble is about to Collapse. What happens Next.

Over at the Digital Reader they  had this shocking little bit of insight:

If you waterboard a Book People you might be able to get them to discuss what might happen _if_ Barnes & Noble goes bankrupt: it will be bad for old guard publishers.

What you won’t hear them say is that the current trend toward digital is going to make B&N obsolete as a bookseller (instead, they’ll assume  static system), or that the current mismanagement renders any discussion of B&N’s future moot.

The Book People at Publishers Weekly, for example, continue to ignore the writing on the wall, instead reporting:

During its annual meeting held Tuesday morning at its flagship store in New York City, Barnes & Noble chairman Len Riggio supported its new CEO, Demos Parneros who was named to his current role in April.

During the meeting, Riggio called Parneros “the perfect fit” to help the company grow its top line and improve profits. Observing that Parneros “has brought lots of energy to the company,” Riggio said he is looking forward to watching the executive over the next few years, noting that Parneros shares his vision and will revive B&N “store by store.”

The thing about Parneros is that in his first quarter at the head of B&N, revenues fell by 6.6%. That is not entirely his fault, but his plans for turning around Barnes & Noble amounted to six paragraphs of buzzword bingo. This does not inspire confidence in the man, and that should make you wonder why Riggio is so certain about Parneros ability to help B&N rise from the ashes.

Riggio chose, and then fired, the last two Barnes & Noble CEOs, and when that post was vacant he twice held the position of CEO. The company lost money under his leadership, and it also lost value – the stock price dropped from over $17 a share (when Riggio sold stock in 2014) to $7.30 a share today.

And yet in spite of the declining value, B&N continues to pay out a dividend of fifteen cents a share each quarter. As the Motley Fool notes, B&N is using a lot of its profit to pay that dividend – this, at a time when revenues continue to fall.

That is not a pattern to inspire confidence in B&N’s future. No, what it looks like is the senior management is buying off the major investors, a group that not so coincidentally includes Len Riggio.

Riggio is running B&N into the ground, and he is paying himself a bonus while he does it.

 

Okay.  As I’ve talked about before this before… this is what happens next:

  • Big Pub reduces its Author List down to servicing Cadillac Clients.  Many authors who think they’re something are about to be shown the door in the form of un-returned emails, unanswered calls, and not talk of future projects.  Already happening.
  • Amazon Opens Book Stores.
  • Trad Pub Authors attempt to seamlessly bring themselves ,and their Mojo, into Amazon and fail badly because they’re not use to the volume of work.  Marketing, Formatting, Editing, Social Media, and most importantly now:  A tight release schedule of every 30-90 days.  Also Amazon picks the winners and its more interested in New Talent.

Don’t think it can happen… Toys R US just filed for Bankruptcy RIGHT BEFORE THE HOLIDAY TOY BUYING SEASON!

 

Meanwhile, here’s a free book from me.  Because that’s what you gotta do when you market as an Indie.  It’s Lost meets The Stand.

You can check out a sample right here because that’s how Smart Amazon is.

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About Nick Cole

Nick Cole is a working actor living in Southern California. When he is not auditioning for commercials, going out for sitcoms or being shot, kicked, stabbed or beaten by the students of various film schools for their projects, he can often be found as a guard for King Phillip the Second of Spain in the Opera Don Carlo at Los Angeles Opera or some similar role. Nick Cole has been writing for most of his life and acting in Hollywood after serving in the U.S. Army. You can also find him on Twitter.

7 Responses to Yes… Barnes and Noble is about to Collapse. What happens Next.

  1. It’s Business 101: you don’t innovate; you die! B&N hasn’t innovated in ages, where as Amazon continues to create new and improved. Also B&N is supplier (as long as the supplier is traditional) focused and not focused on its customers. Amazon is supremely customer-centric.

    It’s inevitable: B&N will shut down, unless it casts off the heavy-handed bridle of traditional publishers.

    I don’t wish B&N to go out of business. Competitors make other businesses more efficient and customer focused. And I want Amazon to focus on its customers, and its authors.

  2. Being a reader, I used to think this would be a bad thing. But! In the last 5+ years, I think I’ve voluntarily gone to a B&N at most once a year, if that.

  3. Amazon is already opening bookstores near where I live.
    I feel really bad about B&N, they have everything they need to compete successfully against Amazon.
    Well, everything but people in charge who understand the business! I don’t know if the people in charge are stupid, or if they just want to kill B&N cause they’ll make more money that way.

  4. I think once Amazon finds a way to allow you to select a book title, format it to either paperback or hardback, and then print and bind it all within 24 hours, then either ship it or let you pick it up in store, other bookstores will either have to find a way to do the same, or die.. And at some point, technology will allow this to happen, maybe not today, maybe not tomorrow.. but in less than 10 years time, I predict, it you want a hardcopy of a book, this is what you will have to do.

  5. My only surprise is that B&N is still around. I seriously thought they would have not only dropped Nook and eBooks by now, but that they would have filed for bankruptcy.

  6. The problem with B&N is that not only are they limited in selection, they can’t compete with the price Indie Authors can charge. Once the belief that Indie means crap fades, it’ll get even harder for them. Plus, with their coffee shop model, they encourage you to read while you dine. Reading books you haven’t paid for yet. I know people who treat B&N like a library that will let them snack while they read. Traditionally, restaurant ROI isn’t that great so this isn’t a winning model.

  7. Nick:

    Thanks for the post. I found that link via idealog.com where Mike Shatzkin was asked precisely that question.
    I have a BN account for electronic books and I greatly appreciated the free Fridays until they stopped because I lived in Canada. In any case, as I’m not an American I’m less dependent on Barnes and Noble and I can buy my ebooks from many sources both kindle and epub.
    I try to buy any physical book from the publisher and if I can’t: Amazon.
    In any case, the midlist writers will need to reevaluate their relations with their publishers and head out on their own as there’s no loyalty
    xavier

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