The Future of Barnes & Noble–and what it may mean for media purchasing (1 Viewer)

[Adam Lenhardt]

I find it astounding and counter to logic to say that a company should be punished for lowering its prices. In the Alcoa Aluminum antitrust case, the government lawyers actually tried to argue that the company was “evil” for doing everything in its power to keep lowering the price of aluminum and keeping it that way. To say that a CONSTANT effort to lower prices is bad is little short of Orwellian.

To delve into this debate much deeper would run afoul of HTF rules. Suffice to say that I don't share your confidence in the self-correcting mechanism of an unrestrained free market, because I don't think it's possible to separate out the political or other outside considerations. It is the nature of being in a dominant position to use that dominance to protect one's dominance, and the moves don't just happen in the open where consumers can make fully informed decisions.

Which isn't to say that Amazon is the source of all of Barnes & Noble's problems; it's facing headwinds that would have caused it problems regardless. It may be that there just isn't room for a large corporate bookstore chain anymore. But as someone who likes to browse the shelves, soak up the smell of fresh print, get tipped off about a book in the morning and pick up a copy that afternoon, I will mourn its loss if it does go.

 

[RobertR]

To delve into this debate much deeper would run afoul of HTF rules. Suffice to say that I don't share your confidence in the self-correcting mechanism of an unrestrained free market, because I don't think it's possible to separate out the political or other outside considerations. It is the nature of being in a dominant position to use that dominance to protect one's dominance, and the moves don't just happen in the open where consumers can make fully informed decisions.

The main point of my lengthy post was to show that the historical record doesn't support the theory you expounded that an unrestrained free market results in monopoly. It doesn't. It's a flawed and circular argument to say that the free market results in monopoly because of political interference, therefore we must have political interference. In other words, we must impose that which we agree it's bad to impose, and the bad effects of the interference will be used to "prove" that the lack of the interference is bad.

Which isn't to say that Amazon is the source of all of Barnes & Noble's problems; it's facing headwinds that would have caused it problems regardless. It may be that there just isn't room for a large corporate bookstore chain anymore. But as someone who likes to browse the shelves, soak up the smell of fresh print, get tipped off about a book in the morning and pick up a copy that afternoon, I will mourn its loss if it does go.

There are always going be changes that some people don't like. For example, I remember the MTV of the 80s with fondness, and I hated what it became. But I would never think of trying to prevent such change by force. I think the bottom line is what you said in your second sentence. You don't have to like it, but people as a whole are fine with it, and their wishes shouldn't be overridden.

 

[jcroy]

There are always going be changes that some people don't like. For example, I remember the MTV of the 80s with fondness, and I hated what it became. But I would never think of trying to prevent such change by force. I think the bottom line is what you said in your second sentence. You don't have to like it, but people as a whole are fine with it, and their wishes shouldn't be overridden.

(On a tangential aside).

Similar sentiments here too about music channels.

When MTV turned to complete crap sometime in the early->mid 1990s (ie. the Real World, etc ....), I moved on briefly to the canada muchmusic channel where they still actually played music videos regularly at the time. This was before VH1 became my music channel of choice by the late 1990s. (Eventually VH1 turned to crap too).

 

[Worth]

Again, you place the emphasis on jobs, not whether human wants are being satisfied. Is plenty of music, television, movies, and writing available to people? Yes, more so than EVER before, yet you seem to be contending that that’s somehow a bad thing...

As with most major changes, I think its effects are both good and bad. The real problem isn't the domination of Amazon - it's the proliferation of pirated content and the rise of new business models like music and movie streaming services that pay a fraction of what the old models did. While it's great to have access to practically everything ever written, filmed and recorded, it's not so great when there are new generations who feel entitled to all of this content for free or next to nothing. It's going to be very hard to reverse course and convince them to pay for things that they've grown to believe have no monetary value.

 

[RobertR]

As with most major changes, I think its effects are both good and bad. The real problem isn't the domination of Amazon - it's the proliferation of pirated content and the rise of new business models like music and movie streaming services that pay a fraction of what the old models did. While it's great to have access to practically everything ever written, filmed and recorded, it's not so great when there are new generations who feel entitled to all of this content for free or next to nothing. It's going to be very hard to reverse course and convince them to pay for things that they've grown to believe have no monetary value.

Speaking in general terms, I would agree that someone who has the attitude that he is entitled to what others produce is wrong. I have to point out that such an attitude is the antithesis of favoring the free market. It's the old TANSTAAFL principle. But there's a difference between getting something for nothing and getting something for less. Really, does anyone complain about the dramatic decrease in, say, the cost per byte of computer memory? People are just going to have to adjust to a new business model, and not worry so much about the supposed glories of the past.

 

[Jasper70]

I go into libraries a lot. What I see more than anything is people using the computers and free WiFi. Sure, some still check out books but I think they’re in the minority.

 

[zoetmb]

At times I wonder whether the first week sales is the most important for a new dvd/bluray release.

After that it just collects dust?

It sure seems that way and it does puzzle me. What's the rush? If my favorite movie comes out on Blu-ray, what's the difference if I buy it this week, next week or two months from now? Half the time when I buy a title, I don't wind up watching it for weeks.

But I guess consumers who are still such fans that they still buy physical media are so anxious to receive a new movie that they rush out to buy it as soon as it's released, especially if it's a film that they didn't see theatrically (although that's only a guess - I have no research data to back that up). Only 3 titles so far this year held the #1 spot (all physical media combined, including DVD) for more than one week: Blade Runner 2049 (2 weeks), The Last Jedi (2 weeks) and The Greatest Showman (2 weeks),

 

[Josh Steinberg]

What's the rush?

From the studio's point of view, they've put money into creating a new disc, and they'd like to recover that investment as soon as possible. They're also putting money into promoting that disc, and that's usually a one-time effort for them. Discs take up shelf space (or warehouse storage space) which costs money and/or takes away space from another item, so stores have an incentive to encourage demand up front so they can move as many as they can as quickly as they can. Those factors almost certainly contribute to why there can seem to be a sense of urgency on release date.

 

[zoetmb]

From the studio's point of view, they've put money into creating a new disc, and they'd like to recover that investment as soon as possible. They're also putting money into promoting that disc, and that's usually a one-time effort for them. Discs take up shelf space (or warehouse storage space) which costs money and/or takes away space from another item, so stores have an incentive to encourage demand up front so they can move as many as they can as quickly as they can. Those factors almost certainly contribute to why there can seem to be a sense of urgency on release date.

You missed my point. I was speaking from the standpoint of the consumer. Why do consumers feel they have to buy a video release the first week it's out and why do titles fall of the charts so quickly? Back during the height of the music industry, there were albums that stayed on the charts for a year.

Also, as physical retail dies, inventory turns are less important. I don't know why they don't care, but Amazon doesn't seem to care about how much inventory they carry and they'll carry a title for years even if it doesn't sell. I've always thought that one day they'd wake up to the fact that most of the products they inventory don't sell hardly at all and that they're absorbing a LOT of cost by inventorying everything. But so far, they've gone in the opposite direction, opening more and more warehouses.

 

[jcroy]

You missed my point. I was speaking from the standpoint of the consumer. Why do consumers feel they have to buy a video release the first week it's out and why do titles fall of the charts so quickly? Back during the height of the music industry, there were albums that stayed on the charts for a year.

I remember back in the day of hit albums, getting the new Guns 'N Roses album(s) on the first day/week was something to brag about for the next several days.

Dunno about movies.

 

[Adam Lenhardt]

You missed my point. I was speaking from the standpoint of the consumer. Why do consumers feel they have to buy a video release the first week it's out and why do titles fall of the charts so quickly?

Speaking for myself: there are many titles that have "loss leader" pricing the first week they're on shelves, and then the price isn't that low again for months.

 

[Thomas Newton]

In what way are books, music, and movies not more accessible than ever before? How can such greater accessibility possibly be bad?

In many places, the retail selection of music is much less than it was a few years ago. With the bankruptcy of Borders and the closing of some Barnes & Noble locations, books may be headed the same way.

There really is no comparison between, say, three Tower Records stores (plus several fairly large competitors) in the same area, vs. the CD selection at Target + Best Buy + WalMart today. If you live outside of a major metropolitan area, Amazon, iTunes, etc. may be the only way that you find that there even IS a new release from a favorite artist, let alone get a chance to buy it.

 

[RobertR]

In many places, the retail selection of music is much less than it was a few years ago. With the bankruptcy of Borders and the closing of some Barnes & Noble locations, books may be headed the same way.

There really is no comparison between, say, three Tower Records stores (plus several fairly large competitors) in the same area, vs. the CD selection at Target + Best Buy + WalMart today. If you live outside of a major metropolitan area, Amazon, iTunes, etc. may be the only way that you find that there even IS a new release from a favorite artist, let alone get a chance to buy it.

Saying they're not available in a retail brick and mortar store is not the same thing as saying they're not available. They are, just not in the way that some people think they "should" be.

 

[Thomas Newton]

Ask working musicians and writers who aren't at the absolute top of the pyramid their take on it. The music and publishing industries have tanked in the last decade and the film industry is in in decline, as well.

Here are some possible reasons why the music industry might be in the state that it is in.

1. As mentioned previously, retail selection of music is way down. This may be in part due to the other items … but "out of sight, out of mind". I used to rely on local store displays to let me know about the existence of new albums I wanted to buy. Now I can't do that.

2. Part of the reason that there was a huge boom in the music industry was a massive "forklift upgrade" from LPs and Compact Cassettes to CDs. The thing about "forklift upgrades" is that they eventually end. Super Audio CD and DVD-Audio (a.k.a. DRM delivery mechanisms) did not exactly take off, and so there was no follow-up boom until Jobs dragged the industry, kicking and screaming, into realizing that they could make money on electronic downloads. Now they are pinning their hopes on LPs again, but that seems to be a small, high-margin niche market, not a real competitor to CDs or downloads.

3. Following the CD-Audio "forklift upgrade" were DVD-Video, Blu-Ray, and HDTV "forklift upgrades". It seems reasonable to assume that some of this video spending came at the expense of audio spending.

4. The recording industry's attempts to cripple entertainment and computer gear, and otherwise insult their own customers, did not go unnoticed. Especially by those of us who were their best customers and who did not appreciate things like (cough) root (cough) (cough) "CDs".

5. Many customers who buy electronically do so because they just want certain tracks. This is in some ways a return from the album-oriented concept of recent decades to the single-oriented one of the early R&B / rock years. For artists like the Beatles or Bob Dylan who can maintain high levels of quality across entire albums, this seems unlikely to be a problem. But I can see where it might lead to a drop in income for "one-hit wonders."

 

[zoetmb]

Here are some possible reasons why the music industry might be in the state that it is in.

1. As mentioned previously, retail selection of music is way down. This may be in part due to the other items … but "out of sight, out of mind". I used to rely on local store displays to let me know about the existence of new albums I wanted to buy. Now I can't do that.

2. Part of the reason that there was a huge boom in the music industry was a massive "forklift upgrade" from LPs and Compact Cassettes to CDs. The thing about "forklift upgrades" is that they eventually end. Super Audio CD and DVD-Audio (a.k.a. DRM delivery mechanisms) did not exactly take off, and so there was no follow-up boom until Jobs dragged the industry, kicking and screaming, into realizing that they could make money on electronic downloads. Now they are pinning their hopes on LPs again, but that seems to be a small, high-margin niche market, not a real competitor to CDs or downloads.

3. Following the CD-Audio "forklift upgrade" were DVD-Video, Blu-Ray, and HDTV "forklift upgrades". It seems reasonable to assume that some of this video spending came at the expense of audio spending.

4. The recording industry's attempts to cripple entertainment and computer gear, and otherwise insult their own customers, did not go unnoticed. Especially by those of us who were their best customers and who did not appreciate things like (cough) root (cough) (cough) "CDs".

5. Many customers who buy electronically do so because they just want certain tracks. This is in some ways a return from the album-oriented concept of recent decades to the single-oriented one of the early R&B / rock years. For artists like the Beatles or Bob Dylan who can maintain high levels of quality across entire albums, this seems unlikely to be a problem. But I can see where it might lead to a drop in income for "one-hit wonders."

A few comments:
1. The initial reluctance of the industry to embrace digital downloads let to massive illegal consumption of music. That led to the attitude that "music should be free". The industry eventually did embrace downloads, but the attitude never went away and the perception among people today is that they shouldn't be paying very much for music.

2. The conglomerate take over of radio has led to incredibly bad "fast food radio" that no longer leads to music sales in the way radio did from the 1950's until 2000 or so.

3. The single oriented early rock and R&B years "worked" because the industry was far smaller and because artists went into the studio and recorded three tracks in a four hour session. It's not sustainable when artists spend months in the studio and record different tracks in different studios and use mixing and mastering engineers in other studios.

4. But that's moot anyway because even digital downloads are in severe decline. In the U.S. in 2017, physical media constituted 17.6% of revenue, downloads just 15.7% (down 25.5% from 2016) and streaming constituted 66.7% (up 43% from 2016). This had led to rumors that Apple is going to abandon selling downloads in favor of streaming subscriptions to Apple Music.

5. No one in the industry with any sense expected LP's to save the industry. LP's are a welcome, but tiny niche. In 2017 in the U.S., just 15.6 million LP's were sold. That was up 5.4% from 2016 but it was down from the 16.9 million sold in 2015. We won't know the sales figures for the first half of this year until the RIAA releases them in September, but it's very possible that LP's have already hit their peak. It's also possible that the LP market is really primarily a used market. In any case, it contributes quite little revenue to the industry. The LP "boom" has largely been hype. Consider that back in the day, there were single LPs that sold 10 million all by themselves. Now, the equivalent of 1 1/2 of those is the entire industry.

6. I don't agree that music industry revenue falloff was due to consumers finishing replacing their LPs and cassettes with CDs because CD's peaked in 2000. It didn't take consumers 16 years to replace their LPs and cassettes. On the other hand, CDs did start to decline before the advent of legal digital, but I think this was due to the decline of quality radio and a decline in quality in the record industry in part due to the consolidation of the major record labels to just three: Warner, Sony and Universal. And one might also consider the effects of MTV on the quality of music in that era.

7. The bigger issue of relevance to HTF participants is will the move of the music industry to streaming as the overwhelming dominant way that consumers consume music also mean that streaming will dominate video consumption?

 

[Dick]

I go into libraries a lot. What I see more than anything is people using the computers and free WiFi. Sure, some still check out books but I think they’re in the minority.

The upcoming generation (if it survives long enough) will not know the wonderful smell of the printed page, or the heft of holding an actual book, or the satisfaction of seeing the spine of that book on their shelf, or the beauty of snuggling into bed beneath a reading lamp and tackling the next few chapters of a book that has a dust cover and a texture, without a backlight that illuminates digital images. Sigh.

 

[Vic Pardo]

The upcoming generation (if it survives long enough) will not know the wonderful smell of the printed page, or the heft of holding an actual book, or the satisfaction of seeing the spine of that book on their shelf, or the beauty of snuggling into bed beneath a reading lamp and tackling the next few chapters of a book that has a dust cover and a texture, without a backlight that illuminates digital images. Sigh.

Hell, Generation X may be the last generation to know what it's like to hold a strip of 16mm film in their hands and hold it up to the light and see the images and the emulsion on it. On those rare occasions when I got to hold a strip of 35mm film from a feature film, it was magical.

 

[BobO'Link]

The upcoming generation (if it survives long enough) will not know the wonderful smell of the printed page, or the heft of holding an actual book, or the satisfaction of seeing the spine of that book on their shelf, or the beauty of snuggling into bed beneath a reading lamp and tackling the next few chapters of a book that has a dust cover and a texture, without a backlight that illuminates digital images. Sigh.

That depends on their parents. All of my grandkids (ages 18mo - 15 years) know what a book is. Their parents all make sure to read to them from a *book* daily - at least those too young to read them for themselves. The rest are avid readers and don't know what it is to read a book "electronically" in spite of owning tablet devices which support such methods. They all read books from a printed page.

 

[Dick]

That depends on their parents. All of my grandkids (ages 18mo - 15 years) know what a book is. Their parents all make sure to read to them from a *book* daily - at least those too young to read them for themselves. The rest are avid readers and don't know what it is to read a book "electronically" in spite of owning tablet devices which support such methods. They all read books from a printed page.

Heartening news. Hope there are lots more parents like you.

 

[zoetmb]

That depends on their parents. All of my grandkids (ages 18mo - 15 years) know what a book is. Their parents all make sure to read to them from a *book* daily - at least those too young to read them for themselves. The rest are avid readers and don't know what it is to read a book "electronically" in spite of owning tablet devices which support such methods. They all read books from a printed page.

That will change when they hit college (and maybe even high school, depending on their high school). Almost all college textbooks today are electronic and all assignments must be submitted electronically (with the exception of some art/design projects). On the other hand, trade e-books sales have been in moderate decline in recent years and the Barnes & Noble and Sony e-book readers were failures. But I also think that when young people spend their lives on their phone apps, it's inevitable that they're going to migrate to electronic books, if they bother to read anything like a "book" at all once they leave school. That's not just because of the medium but also because they generally don't feel the need to own media, so they won't be buying books, just as they're no longer buying physical music and video and they're streaming instead. The only "hope" is that some of the streaming services eventually shut down because the big ones are not profitable or that a new generation goes through a cultural change and returns to wanting to own physical media because they want to see something on the shelf. For me personally, if it's not on a shelf, I don't feel like I own it, but I'm an "old man".