Independent bookstores aren’t the only retailers chafing at the practice of showroom. Just ask Target.

In showrooming, customers enter a retail store and, when they have located the product they’re shopping for, walk out, go home and purchase the item on the Internet at a lower price.  Some shoppers simply scan the barcode of the production in the store and order it online on the spot. This in effect makes the brick and mortar store a mere showroom for customers to examine products they have no intention of buying there. Last Christmas Amazon actually promoted the practice, outraging alarming and outraging many stores and store chains. We know of at least one publisher that fought back by discontinuing distribution of its books on Amazon.

The latest objector is Target, the giant retail store chain. Executives, reacting to what they perceived as showrooming of Amazon’s Kindle e-book reader, informed Amazon they would no longer carry it.

Though Amazon sells most of its Kindles on its own website, many customers like to examine them physically, just as they may now do with Kindle’s rival, Barnes & Noble’s Nook, which may be “road-tested” by customers in B&N’s brick and mortar bookstore.  Recognizing consumers’ natural impulse to touch, Amazon began distributing Kindles in big retail chains.

It’s hard to predict what impact Target’s action will have on Kindle sales.  With nearly 1,770 stores in 49 states and gross revenues of $65 billion, boycott of a product by Target can have some seriously detrimental impact on any supplier. More ominously, if Staples, Best Buy and Wal-Mart, which also sell Kindles, see themselves as showrooming victims and follow Target’s lead, it could put a crimp in Amazon’s sales – and its image.

For the complete story read Target, Unhappy With Being an Amazon Showroom, Will Stop Selling Kindles by Stephanie Clifford and Julie Bosman in the New York Times.

Richard Curtis

This blog post was originally published on Digital Book World as Target Targets Amazon as Showrooming Enabler

Laura Hazard Owen, writing for Gigaom.com, reports a unique strategy for combating the practice known as “showrooming”.

In showrooming, customers enter a bookstore, browse, then select (or scan the barcode of) the book they want to purchase, walk out of the store and order it from an online bookstore. Which makes the independent store a mere display space for customers to order books from its competitors. Last Christmas Amazon actually promoted the practice, outraging indy stores. One got so mad it stopped doing business with the behemoth. (See Can You Survive without Amazon?)

Barnes & Noble, the highest-profile target of showrooming, is now in a position to fight fire with fire. Microsoft’s investment in B&N’s Nook business gives the bookstore chain the potential for a showroom that loops back to its own inventory via the Nook.

“B&N CEO William Lynch says that the company plans to embed NFC (near field communication) chips into Nooks,” reports Owen. “Users could take their Nook into a Barnes & Noble store and wave it near a print book to get info on it or buy it.”

It’s an interesting concept, but there’s a big flaw in the reasoning.  Showrooming enables customers to scan a high-priced book in a brick and mortar store, then buy it at a discount on an Internet store.  In other words, if you scan a $20.00 book in a Barnes & Noble bookstore, then go to B&N’s online store, you’ll be able to buy it for, say, $16.00.  Then why, you will ask, can’t I pay $16.00 inside the bookstore?

For a showroom to work properly you need two components: a physical space with physical books to browse; and a virtual space to actually buy them. Think of a library where physical books are on display for browsing only. Customers choose the titles they want, swipe a credit card, and wait a short time while the book is printed on an Espresso-type printer.

We’ve been buttonholing readers with this mad scheme for years, and you can see some of our postings about kiosks here.

Richard Curtis

This blog post was originally published on Digital Book World as Showdown for Showrooms

In another coup for its book publishing enterprises, Amazon’s Thomas & Mercer imprint has acquired fourteen novels in Ian Fleming’s James Bond thriller series, plus two nonfiction books by Fleming.

If Amazon’s policy holds true the books will be carried exclusively on the Kindle e-reader.  As Publishers Lunch‘s Michael Cader points out, however, the news “brings attention again for Barnes & Noble, and whether they will carry the print editions. Since Amazon says the ebooks will be Kindle exclusives at the outset, and BN has already declined to carry titles from Amazon Publishing in their physical stores, the policy is unlikely to change.”

B&N has stated its position about Amazon Publishing’s books in no uncertain terms.

Richard Curtis

This blog post was originally published on Digital Book World as Amazon’s Fleming Acquisition May Not Bond with B&N

The below announcement from the Authors Guild reports that Barnes & Noble has acceded to pleas from the Guild not to make authors collateral damage in the war with Amazon over the latter’s business practices including exclusive content agreements.

Here’s the Guild’s announcement in full:

Richard Curtis

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Here’s some welcome news: Barnes & Noble has agreed to our request to bring Marshall Cavendish children’s books back to their stores’ shelves. By our count, more than 250 authors and 150 illustrators have been affected.

How these books got pulled in the first place is a lesson in how exclusive content agreements have begun balkanizing the book marketplace.

In December, Amazon Publishing purchased Marshall Cavendish’s children’s book list, more than 450 children’s and young adult titles. The next month, Barnes & Noble announced that it would not be stocking any Amazon published titles in its stores. B&N released a statement from Jaime Carey, its chief merchandising officer, saying that it would not stock books published by Amazon, “based on Amazon’s continued push for exclusivity with publishers, agents and the authors they represent.”

With this announcement, B&N pulled Marshall Cavendish children’s books from its shelves. For Debby Dahl Edwardson, the timing could not have been worse or more devastating. Her most recent book, “My Name is Not Easy,” had been selected as a 2011 National Book Award Finalist. This sort of recognition can transform an author’s career, and authors typically visit countless bookstores to make the most of such opportunities. Ms. Edwardson, however, found her opportunity drastically curtailed. Barnes & Noble removed her book from its shelves (including from the shelves of its store in Fairbanks, Alaska, the one nearest the author’s North Slope home) about two months after the National Book Awards ceremony.

As we’ve made clear over the last several years, we’re very concerned with Amazon’s rapidly growing dominance of bookselling. Exclusive content is a big part of that story. With $9 billion in cash, Amazon can afford to cut more deals as it did with DC Comics to acquire exclusive e-book rights to titles, as it tries to gain the upper hand in the e-reader and tablet market.

So we’re sympathetic to the position of brick-and-mortar booksellers, even the largest of them: this isn’t a fair fight, by any stretch. Still, it’s essential that authors and readers not become collateral damage. The authors and illustrators who signed contracts with Marshall Cavendish had no way of anticipating that the publisher would assign their contracts to Amazon. For these authors to lose their vital showroom presence in Barnes & Noble stores was clearly unfair and harmful. Children’s books, especially picture books, need to be seen to be appreciated by readers.

We fear that more and bigger battles in bookselling and book publishing loom in the months ahead. For the sake of authors and readers, we hope those fighting it out will avoid using access to vital literary marketplaces as a weapon.

Unfortunately, this seems unlikely. Amazon is seizing an ever-growing share of the bookselling market, but it’s after far bigger game. Deploying some of its cash to buy publishers with deep backlists is an inexpensive way for Amazon to ensure that its Kindle Fire is an essential device to many readers, who then can be sold movies, TV shows, and music through the platform. Amazon’s history suggests it won’t be shy in these efforts.
Meanwhile, Barnes & Noble isn’t backing down. Its executives made clear to us that it is making this exception because it announced the policy after Amazon announced its purchase of the Marshall Cavendish titles. For any new Amazon acquisitions, Barnes & Noble’s policy is to ban the books from their shelves.

For now, however, some good news for Marshall Cavendish authors and illustrators.
We’ll keep you posted on any developments.

When Amazon offered in December to reward customers who scanned book bar codes in bookstores and then bought the book on Amazon instead, we wrote “Amazon’s strategy could backfire.”

“When Amazon’s sales reps call for an appointment to pitch their list,” we pointed out, “they may find the owners’ phones turned off.” (See Please Shut Off Your Cellphones. This is a Bookshop)”

They did. Barnes & Noble will not carry books published by Amazon’s publishing imprints.

“In a sharp answer to Amazon and its expanding publishing efforts,” writes the New York Times‘ Julie Bosman, “Barnes & Noble said on Tuesday that it would not sell books released by Amazon Publishing in its bookstores. The ban includes books released by New Harvest, a new imprint of Houghton Mifflin Harcourt that recently struck a deal to publish and distribute books released by Amazon Publishing’s unit based in New York.

“’Barnes & Noble has made a decision not to stock Amazon published titles in our store showrooms,’ Jaime Carey, the company’s chief merchandising officer, said in a statement. ‘Our decision is based on Amazon’s continued push for exclusivity with publishers, agents and the authors they represent. These exclusives have prohibited us from offering certain e-books to our customers. Their actions have undermined the industry as a whole and have prevented millions of customers from having access to content. It’s clear to us that Amazon has proven they would not be a good publishing partner to Barnes & Noble as they continue to pull content off the market for their own self interest.’”

B&N’s decision may impact negatively on the authors and their agents contemplating selling their authors to Amazon Publishing.

Though some publishing executives may take a measure of satisfaction that B&N, now the victim of Amazon’s aggressive marketing strategies, is paying dearly for its own predatory practices when it was the ruthlessly dominant bookseller of the twentieth century, consumers will rally around it and its more helpless independent bookstore cousins. Publishing industry old-timers like to say “What goes around comes around” and for Amazon it has come around.  We hope however that Amazon Publishing will itself come around – to an open policy of mutual cooperation in the fragile ecology called publishing.

Details in Barnes & Noble Won’t Sell Books From Amazon Publishing

Richard Curtis

We’ve spilled a lot of E Ink projecting that 2012 will be the year that Amazon starts giving away the Kindle as they realize that there’s more money to be made from the content than from the gadget it’s read on. (See Kindle Wants to Be Free) We took our eye off Kindle’s rival, Barnes & Noble’s Nook, but it looks like the younger warrior has stolen a march on Goliath. The Nook is being given away, at least in one instance. But if there’s one instance, more are probably more on the way.

“When customers subscribe to The New York Times ($19.99 per month), they get a Nook Simple Touch for free,’ writes Dara Kerr on CNET.

Can B&N, Amazon, or any other e-reader manufacturer afford to give away its hardware?  Sure.  Because as time goes by, the value of the gadget declines and the value of the content bundled on it rises.  And in the case of the free Nook Simple Touch, it’s a way of giving away an e-reader that may be a bit of a drug on the market anyway.  Sales of black and white dedicated reading devices like the Simple Touch or the original Kindle are sagging as consumers opt for the color and hyperactivity of tablets.  This was confirmed early in January when E Ink holdings reported an 84% drop in sales. E Ink is the print technology that powers black and white reading devices.

Read Barnes & Noble offers free Nook with NYT or People subscription

Mr. Leonard Riggio
Barnes & Noble, Inc.
122 Fifth Avenue
New York, NY 10011

Dear Mr. Riggio,

I am founder and CEO of E-Reads, a leading independent e-book publisher. I’ve just learned that Barnes & Noble has put its Sterling Publishing subsidiary up for sale (Barnes & Noble Said to Put Publishing House Up for Sale). I would like to tender our offer for the company, and though the deadline for bids has passed, I hope that when you hear our proposition you will extend the closing date for us.

When I read the Sterling announcement in the trade news I could scarcely believe that you would contemplate shedding a publishing company boasting a backlist of 5,000 titles, one of the most valuable sources of content to come on the market in the Digital Age. While your principal rival Amazon builds its publishing list incrementally, you possess a ready-made trove of e-book content that is the envy of every competitor. The fact that both this treasury and the Internet channel to distribute and retail it are controlled by one and the same corporation gives B&N an almost unimaginable business advantage.  Yet you are prepared to abandon it in order to concentrate on marketing your Nook e-reader. No one I know understands the strategic or financial benefit of dumping all those books. Is content no longer king in your value system?

Well, Mr. Riggio, it is in mine, and thus with this letter I am happy to extend our offer to acquire the Sterling list for one dollar plus 50% of our revenues in perpetuity.  Though this may seem facetious we are absolutely serious and confident that you will make more money this way than the best buyout offer on the table. If you project the annual sale for each of those 5,000 titles at somewhere between 1,000 and 10,000 e-book units – a far from unreasonable projection — and the average net revenue per sale at $5.00, the potential annual revenue is in the hundreds of millions of dollars. Of which Barnes & Noble’s share would be 50%. Compared to the return on investing in hardware, the yield on book content is laughably superior.  If you can’t see it, give the content to someone who does.

I trust you will take our offer under the most serious consideration, and I look forward to hearing from you.

Sincerely,

Richard Curtis
President and CEO
E-Reads

Play nice!

When Amazon selected Laurence Kirshbaum to head its New York-based book publishing initiative, many publishing people greeted the news with unalloyed enthusiasm.The former CEO of the Time Warner Book Group is one of the few truly branded personages traditional publishing and it was hard to imagine a better choice to amalgamate the two cultures of pre- and post-Kindle. It still is, and with the spring 2012 debut of Kirshbaum’s first list we’re ready to welcome it with a cheer.

Not everyone else is, however. Articles describing Amazon’s move from retail partner of publishers and bookstores to feared rival have become a genre of their own, and journalists are vying with each other for purple prose awards. Hide your children. Amazon is coming to get you was the subheadline of an Atlantic Monthly editorial on the subject by Rebecca J. Rosen. Rosen’s remarks typify the terror expressed by fellow pundits: “Amazon’s conquest of every step of a book’s journey into existence is nearing its final stages. First, it pushed out the brick-and-mortar bookstores, shuttering even the giant Borders. Next, with its Kindle it began to step on the toes of book publishers. But now, it is going right for publishers’ hearts: their authors.”

These concerns are far from groundless, but what we have lacked so far is an objective evaluation of Amazon’s performance to date as a publisher.  Given Amazon’s notable secrecy, there’s little point in looking to the company for help.  But Laura Hazard Owen, writing for PaidContent.org, has rendered a masterful analysis drawn from a variety of sources, plus inference, intuition, educated guesswork and good old journalistic shoe leather.

Owen’s conclusion? “Amazon Publishing hasn’t killed print yet.” Like its legacy publishing competitors, Amazon has won some, lost some, and broken even on some others.

In order to play on the same stage as Knopf or Farrar, Straus, there is one major obstacle for Amazon to clear away. It will have to reach out to bookstores and chains, who have been so traumatized by Amazon’s steamroller approach that many, including Barnes & Noble, refuse to buy anything with the Amazon imprint. B&N insists that Amazon retail its titles on the Nook, the same as other trade publishers like HarperCollins or Simon & Schuster are permitted to do.  Amazon needs to woo some major authors away from their traditional homes, says Owen.  But if those writers fear that their books will not be distributed in stores, or that their e-books will not be sold on the Nook, it may be that no amount of money will lure them into Amazon’s camp.

If anyone can successfully navigate these rapids it’s Larry Kirshbaum. But he and his team have their work cut out for them.

The Truth About Amazon Publishing

Richard Curtis

Amazon and Barnes & Noble collided recently in a fearful clash. A lot of damage was inflicted but predictably the biggest victim was the customer.

The first shot was fired when Amazon acquired e-book rights to a trove of superhero graphic novels from DC Comics. Some one hundred volumes featuring Superman, Batman, Green Lantern, Watchmen and Neil Gaiman’s Sandman were secured to promote Amazon’s newly released tablet, the Kindle Fire.

All well and good – except that Amazon’s e-book rights were exclusive. Meaning that rival Barnes & Noble would be deprived of the right to carry the titles on its Nook e-reader.  B&N could still sell the print editions, however. But that’s a big however. B&N told DC that if they couldn’t have e-book rights they didn’t want anything. Whereupon they pulled the print editions of those DC graphic novels from 1300 stores.

The result was a lose-lose-lose-lose-win situation.  DC lost sales – as well as face for “placing greed over its fans.” in the words of New York Times‘s David Streitfeld. Barnes & Noble lost bookstore and Nook sales too, plus the nose it lost to spite its face.  Customers and fans lost access to the books in Nook (and Sony and Kobo and Apple iPad). And at least one author is unhappy – Neil Gaiman, who was blindsided by Amazon’s ploy. ““I was very excited when I heard that Sandman was coming out as an e-book, but was heartbroken when it was announced that I and my kids won’t have it on our readers.”

It will come as no surprise that the lone winner was Amazon, which nailed the exclusive and got a boost from B&N’s abandonment of the print edition.

This is just the first of many such battles. Says Streitfeld: “As Amazon seeks over the next few years to expand its tablet line, these collisions over content are likely to become routine.”

Details in In a Battle of the E-Readers, Booksellers Spurn Superheroes

Richard Curtis

The investment world is abuzz with the news that John Malone’s Liberty Media, a conglomerate that owns Starz and QVC among other holdings, has made an offer to acquire Barnes & Noble.  B&N’s value ebbed as rival amazon.com soared to dominance through brilliant technology and marketing.  The launch of the Kindle and its preeminence in the e-book space set a torrid pace that the traditional book chain could not keep up with.

But B&N’s stock value has been climbing back spearheaded by its own digital strategy built around its Nook E-Reader.  It may be the entertainment potential of the Nook that attracted John Malone.

RC