Fight or flight

"The death of Barnes & Noble is now plausible”. That is the view of David Leonhardt, writing in the New York Times. It’s not an original perspective; the tale of the demise of the US’ largest bookshop chain has been told time and time again, but Leonhardt’s analysis—and its publication in the country’s pre-eminent newspaper—is important. The piece, headlined "Save Barnes & Noble!", is not really about B&N, but a call for legislators to stem Amazon’s growth.

Leonhardt’s view is that Amazon has used books unfairly: "Amazon has been happy to lose money on books to build a loyal customer base, to which it can then sell everything else." Leonhardt describes himself as a "frequent and usually satisfied Amazon customer", but he argues Amazon’s tactics undermine the book business. "Fewer books are commercially viable. Publishers are focusing on big-name writers. The number of professional authors has declined. The disappearance of Borders deprived dozens of communities of their only physical bookstore and led to a drop in book sales that looks permanent. All the while, many writers and publishers are afraid to criticise Amazon." Some of that is true. Amazon takes advantage of its dominance in a number of ways—not least, as Leonhardt says, by raising the cost of Prime. It can be mean (to suppliers) and disingenuous (to the media), using the customer as a human shield for business practices (such as most favoured nation) that ought to have been outlawed.

But it is also true that Amazon has outflanked competitors for all of its 20 years, from its original concept to its launch of the Kindle. In fact, more books are commercially available today precisely because Amazon invested—and believed—in digital in a way others did not. As US books analyst Mike Shatzkin responded: "We’re buying too many books online to have a thriving retail network too. That’s nature, not a conspiracy, and not primarily because of regulatory failure."

B&N, by contrast, remains a business stumbling along, having failed to resolve what has become an existential dilemma: how to sell books at one price online, another in digital, and another still in-store. It’s wasted millions on the Nook and on paying off chief executives, and yet in its latest annual report, notes: "It is abundantly clear that consumers are changing their shopping behaviour and we have to do a better job of anticipating their needs."

B&N should be saved. As with Waterstones, its ability to make books visible on high streets and in shopping centres underpins how this business works. Publishers should do everything they can to keep it. The end of B&N would be a death warrant to how the books business looks today. Nevertheless it is Amazon that has the vision for how the sector will be tomorrow, and the drive to make it reality. Until that changes, this is a story on repeat.