If Amazon puts bookstores out of business, it will destroy the main way readers learn about new books to buy
Jeff Bezos, CEO of Amazon. (Credit: Reuters/Shannon Stapleton/SeanPavonePhoto via Shutterstock/Salon)
By the time a federal judge ruled last week that Apple had illegally colluded with five of the so-called Big Six publishers to raise e-book prices, just about no one in the book business was surprised. All the publishers named in the lawsuit had already taken a long look at the uphill battle and the crippling legal bills and decided to settle. (Unlike Apple, book publishers have less cash than the United States Treasury.) The ruling seemed to be just the latest uplifting story for Amazon, whose dominance Apple and the publishers had been trying to curtail until the Department of Justice stepped in.
Also last week, Amazon’s closest competitor in bookselling, Barnes & Noble, announced the resignation of its CEO, William Lynch, and said it would not name a successor, rarely a good sign. Already in a distant second place, Barnes & Noble has recently seen its woes deepen significantly. The company has been closing stores and announced in June that it would close still more and stop making Nook color tablets. It reported net losses of more than $1 million per day.
With challenges to Amazon’s power wilting fast, the company’s stock closed the week at an all-time high. It is not so obvious, however, that the Seattle behemoth is sitting pretty, at least when it comes to bookselling. Amazon could end up being victimized by its own phenomenal success.
Through logistical excellence, e-reader innovation and pitiless business practices, Amazon has contributed to the demise of hundreds of independent booksellers and the entire Borders franchise, and it is now threatening to do the same to Barnes & Noble. Independents have seen a small resurgence in market share lately, but it is not anywhere near enough to counteract the loss of chain store locations. Industry analyst Mike Shatzkin calls the ongoing decline in retail shelf space “relentless.” That all sounds good for Jeff Bezos, right? After all, Amazon is running out of competitors.
The problem is, by killing off stores, Amazon is making life difficult for the publishers who give them something to sell in the first place, and the retailer’s dominance could pose a threat to the long-term health of the industry. Amazon does deserve credit for reaching far-flung readers and expanding the e-book market. A person who lives a hundred miles from the nearest decent bookstore now has access to nearly any literature published in English, whether as an e-book or by home delivery. Other vendors can now offer this too, but Amazon is the best at it. On the whole, the company is outstanding at what it does — and that’s just the trouble.
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Also last week, Amazon’s closest competitor in bookselling, Barnes & Noble, announced the resignation of its CEO, William Lynch, and said it would not name a successor, rarely a good sign. Already in a distant second place, Barnes & Noble has recently seen its woes deepen significantly. The company has been closing stores and announced in June that it would close still more and stop making Nook color tablets. It reported net losses of more than $1 million per day.
With challenges to Amazon’s power wilting fast, the company’s stock closed the week at an all-time high. It is not so obvious, however, that the Seattle behemoth is sitting pretty, at least when it comes to bookselling. Amazon could end up being victimized by its own phenomenal success.
Through logistical excellence, e-reader innovation and pitiless business practices, Amazon has contributed to the demise of hundreds of independent booksellers and the entire Borders franchise, and it is now threatening to do the same to Barnes & Noble. Independents have seen a small resurgence in market share lately, but it is not anywhere near enough to counteract the loss of chain store locations. Industry analyst Mike Shatzkin calls the ongoing decline in retail shelf space “relentless.” That all sounds good for Jeff Bezos, right? After all, Amazon is running out of competitors.
The problem is, by killing off stores, Amazon is making life difficult for the publishers who give them something to sell in the first place, and the retailer’s dominance could pose a threat to the long-term health of the industry. Amazon does deserve credit for reaching far-flung readers and expanding the e-book market. A person who lives a hundred miles from the nearest decent bookstore now has access to nearly any literature published in English, whether as an e-book or by home delivery. Other vendors can now offer this too, but Amazon is the best at it. On the whole, the company is outstanding at what it does — and that’s just the trouble.
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