Thursday, March 08, 2007
The storm clouds gather
However bad things are for booksellers at moment, it's nowhere near as awful as the music industry. A combination of mp3 file sharing, DVD rentals and broadband movies-on-demand has already seen established retailers like Tower Records go to the wall and it's only a matter of time before others follow. Next week HMV will announce the results of a strategy review and I have no doubt that there are going to be some redundancies and closures.
As HMV own Waterstone's, this is also going to have an impact on the book trade. Most branches of Waterstone's are profitable but there are a few white elephants, like the huge Picadilly branch and it will be hard for HMV to justify keeping these stores open in the face of a long-term downturn in sales. The big question is how far will sales decline before things botton out and how many shops will go from being profitable to loss-making?
Waterstone's MD Gerry Johnson seems to think that digital downloading will also affect the book trade and that the effects will start to be felt within six months. I'm not convinced that it will be this soon, but there is no doubt that the sales of many reference books will soon begin to bypass the high street. I also agree with Johnson when he said that there was no sense in opening large 15,000 sq ft bookstores any more as even if they paid for themselves now, they won't in a few years.
I'm surprised that Johnson's speech didn't get more publicity as it is one of the most radical statements that anyone in the book trade has ever made and the implications are enormous. Cynics might argue that Johnson's pessismism is simply paving the way for draconian measures, but I think he was just being realistic. We are buggered. At least, we're buggered if we want to carry on doing things the way we always have.
In the past retailers wouldn't bat an eyelid if a new store made a loss for the first few years. Indeed they usually accurately budgeted for that loss in the belief that after a couple of years that shop would break into profit until, by the end of a decade, it had paid for itself several times over. They were usually right. Today, if Waterstone's opened a new branch they would not only have to be certain that it would be instantly profitable, but also be able to remain profitable after a 20% drop in sales. It's a tough old world out there.
From a selfish point of view I have several worries. Number one: will I still have a job this time next year? Number two: how much harder will my work become? Number three: will Waterstone's survive or will they be swallowed-up by someone like Permira? Number four: what the hell would I do if I wasn't selling books? (actually I have several ideas)
As far as bookselling is concerned, I think that the age of big, macho, superstores is over. Small is beautiful and the thing that differentiates a bookshop from an internet retailer is the passion and knowledge of ordinary booksellers. A few years ago it looked as if the age of the traditional high street bookshop was over. In the future we would drive to out-of-town shopping centres which would pull us in like a whale swallowing plankton, extract our money and spew us out the other end. However the future may end up being more like the past, and that is no bad thing.