Saturday, July 21, 2012

How We Lost Bookshops Thanks to Amazon and Publishers





July 19, 2012 The Daily Beast - Tim Waterstone

Why does Amazon rule supreme in book sales? Bookseller Tim Waterstone recounts the story of how his eponymous chain was ruined by a short-term business mindset and publishers giving in to the internet behemoth


The tragedy for Waterstones under HMV’s ownership and underinvestment, was that our most precious possession—the loyalty and affection of our customers—fast eroded as the quality of the bookshops deteriorated. It was not just their physical appearance, dire as many of them became, but the quality and expertise of the inventory, the lifeblood of what Waterstones was always about.

Research had shown for years that we were catering for a consumer market of barely twenty per cent of the population. What HMV found impossible to understand was how we—the managers—knew these numbers, and yet accepted them. More than accepted them—embraced them. We knew that the one person in five who used our stores trusted and loved them. Successive Readers Digest surveys of the time, taken across a huge sample of 14,500 British families, ranked Waterstones as the fourth (out of more than eighty nominated) most admired retail group in the country, beaten by only the cherished Marks & Spencer, John Lewis, and Waitrose. For a bookseller, it was astonishing stuff. The key to it all was this; that the 20% of the population were heavy, committed book buyers. They purchased at least fifty books a year, and with Waterstones now across the country, they bought them from us. We fitted the profile of what they wanted a “real” bookshop to be. Rocket science it wasn’t. Effective retailing it was. Our £ sales per square foot across nearly 200 stores reached over £340. This was the highest of any multi-store bookseller in the world, though UK book readership was relatively high, it is true (eg to take 2007—just before the ebook revolution, the US market only aggregated $12.3bn, against the UK’s $5.8bn—around two times, despite a population at least five times greater).


So why did the HMV people, financed by what we would these days characterise as abusively short term focussed private equity suppliers, fail to see the jewel they had in Waterstones? The answer lay in that they despised it. There was an intellectual snobbism afoot, in reverse. Waterstones looked to them to be intellectually pretentious and far too pleased with themselves. Managing directors and chief executives were brought in at bewildering speed and frequency. And where did they come from? Absolutely anywhere of course—Boots (a pharmacy chain), Tesco (a supermarket chain), the music business—anywhere but from the world of books. Not, until Alexander Mamut bought Waterstones in 2011 and appointed the admirable forty-something London bookseller James Daunt to run it, was a single one of them up to the job. They were not even good nuts-and-bolts distribution people, as Waterstones’ sublimely appalling attempt at setting up a superfluous and grotesquely expensive central warehouse a few years ago demonstrated. They read nothing, and knew nothing about the world they were entering.


Amazon
Newscast / AP Photo

The result? They loved the author’s parties and the glamour of it all, but missed what was really going on. Publishing is, and always has been, an aggressively commercial affair. There never has been enough profit to go comfortably around. Missing this, the HMV appointees did not fight publishers on the grounds on which the publishers should have been fought; the way they were going about the business of helping Amazon establish itself in Britain. Resale price maintenance has gone, the coast is clear, so let’s do it, said the publishers. Let’s put Amazon into a position whereby they can buy from us on such favourable terms that in time they can discount everyone else into oblivion. And that included the booksellers who have been our supporters for centuries, in good times and in bad.
Full story here.

1 comment:

Mark Hubbard said...

I think this analysis is too harsh. The technology of reading changed, and that changed the way people bought books, that's all that happened. As sad as it is to see physical book stores go, and as nostalgic as I could get, I only read ebooks now, whether it's convenience, or whatever, I don't know, but that's just the way it's panned out. And as much as I thought I loved my physical library, that's still in our house in Chch where we don't live anymore: I could've got it out, but it's just not been 'that' important.

It's not that I've become a book philistine, via ebooks I'm probably reading more than I used to, simply because I can read in bed when my wife's asleep. Time simply moved on. It's the same in the news media, with the traditional MSM struggling, because publications like Granny Herald insist on trying to run an Internet portal as if they Internet doesn't exist: they won't put a single outside link up in a comment, those few comments the let through. For the MSM, you're either part of the Internet discussion in the comments fields, as NBR and Bernard Hickey have become via liberal comments policy, or you exclude yourself from it and drive away readers (thus, your advertisers). Ultimately, NBR will win the MSM battle because they figured out a way to make me pay a subscription to get behind the pay wall: that is, they have interesting content. But I now only really use MSM for news, I get just about all opinion via blogs, not MSM op-eds.

Whoops, rambling.