You may have read that the economy is taking a chunk out of brick-and-mortar book sellers such as Borders, which earlier this month named a new CEO to try a turnaround.
But the worst may still be ahead, warns former Random House CEO Peter Olson, who now teaches at Harvard Business School as a senior lecturer.
According to Olson, writing in Publishers Weekly, the book industry is due for fundamental changes that go beyond the current crisis. Technology as well as the economy is changing long-established business practices in publishing.
“One-time adjustments by retailers and underlying shifts in the structure of the book industry will make 2009 the worst year for publishing in decades, and could lead to long-term fundamental changes in the business.”
Here is what Olson foreshadows for publishing in the near future:
- M&A activity could shrink the network of stores, giving even more reason for readers to go online to browse and buy.
- The continuing credit squeeze will hamper the ability of chains to finance purchases, resulting in fewer initial orders for new titles and shortened shelf life for slow sellers.
- Traditional bookstores will see their business (and margins) chipped away as cash-strapped consumers buy more of their books at mass merchant discounters such as Wal-Mart.
- Established book pricing models may come under pressure from Amazon’s Kindle and other electronic readers about to be attracted to the market by Kindle’s success.
Read the article for an informed insider’s perspective on the turmoil facing the industry. How about you. Are your book-buying habits about to change? Is there a Kindle in your future?
