Earlier this year, when the Borders bookstore chain seemed to have entered the death-rattle stage of its troubled life, we posted an article suggesting that the perfect rescuer would be a book publisher.

Today, as Barnes & Noble faces the prospect of being put up for sale, it seems appropriate to propose the same solution.

We’ve reproduced pertinent passages of the Borders article below, with Barnes & Noble bracketed to make our point.  We think it would be smart business for Borders, we think it would be smart business for Barnes & Noble, and we think it would be smart business for a publisher. Or is “smart publisher” an oxymoron?

Richard Curtis

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When Galley Cat invited me to make some predictions for the coming decade, I conjectured that sometime in the near future we would see the merger of a major retailer and a major publisher. Here was my reasoning: “A combined publisher/retailer solves many problems for both.The retailer owns the content and doesn’t have to pay a premium for it. The publisher does not have to pay a premium to distribute its books. There would be huge efficiencies of manufacturing and distribution.”

I’ve had about a month to think about what I said, and I want to revise it. The efficiencies of a retailer/publisher combine would not merely be huge. They would be decisive. If you don’t believe it, ask Amazon.

Amazon started as a retailer but has become a publisher too. It started with its Encore program aimed at identifying overlooked books and authors. That was followed by the creation of a service called CreateSpace aimed at self-published authors. And now Amazon has begun publishing mainstream authors.

Though Amazon has no qualms about becoming a  publisher, publishers are terrified of becoming retailers for fear of provoking the wrath of their key accounts – B&N and Amazon. When publishers do dip a timid toe in the water and try to sell their books direct to the consumer, they offer them at full list price, which cannot possibly compete with the deeply discounted prices charged by B&N and Amazon. Yet, if they wanted to, publishers could sell their books directly to the public at 40% discount or higher and thus level the playing field.

The solution? To survive, to remain competitive, publishers may have no choice: they must either become retailers or end up being acquired by them.

At this moment Borders [Barnes & Noble], one of the best and most popular bookstore chains in the business, is in a life and death struggle to remain viable. If a publisher were smart it would rescue Borders [Barnes & Noble] and go into the retail business.

Retailers, I said a while ago (see Direct Sales: Publishing’s Last Stand), are intermediaries in a world that is rapidly disintermediating. As big as they are, retailers are vulnerable to market forces bent on eliminating middlemen, and that’s precisely why they have begun publishing books. The digital revolution demands a direct relationship between content provider and consumer. Merging a publisher and a bookstore chain like Borders [Barnes & Noble] would bring both struggling enterprises a little closer to that direct relationship, to profitability and to competitiveness.

Do I hear any bids?

Richard Curtis