Here we go. The first very large book chain is about to file their chapter 11 – bankruptcy to you and I – in the US. Borders was very late in the game to get onboard the ebook bandwagon, a long way behind Barnes & Noble, and their Nook (who aredoing quite nicely, thank you).
Anyone else get the same feeling that you go 8-10 years ago when music monoliths were shrinking and merging uder a similar digital paradigm shift?
The Wall Street Journal reports today that those in the know expect the bankruptcy filing from Borders any day.
The report states:
A bankruptcy filing by Borders Group Inc., which could come within days, will mean fewer places for consumers to buy books, which in turn is expected to speed the pace of online and e-book sales.
Borders has been putting the finishing touches on a store-closure program that could eliminate more than one-third of its 674 stores as part of a Chapter 11 restructuring, according to people familiar with the matter.
“Once physical shelf space is gone, it’s gone forever,” says Mark Coker, chief executive of Smashwords Inc., an e-book publishing and distribution platform based in Los Gatos, Calif. “If you remove books from our towns and villages and malls, there will be less opportunity for the serendipitous discovery of books. And that will make it tougher to sell books.”
The story goes on to speculate that the news can only accelerate ebook uptake, which is certainly true. It’s a no-brainer and it will happen for several reasons, the main one being “confidence”.
What a broke Borders means for physical books globally
As global financial markets have seen recently, confidence takes a long time to build, and can come crashing down in an instant. When bankruptcy rumours start swirling, let alone the filing of papers, confidence evaporates from consumers (will I get books that I buy from these guys?) suppliers (will I get paid?), and advertisers (Am I wasting my money with these guys?)
This is why it’s very hard to come back from this position. Let’s be clear: Borders aren’t dead yet, but they’ll reportedly a step closer, and If they were teetering, this news will push them over.
Worse than confidence about Borders itself, this news will erode confidence around the world about paper books in general, and paper as a delivery system for stories, I’m not saying that the book market will collapse overnight, or even in a decade, but it’s only going to go south from here in the long-term. And The more stories like this that we see, the faster it will slump.
Investors backing p-book chains, investors improving distribution systems for physical books, paper suppliers and sellers,
And the worse news for the physical book industry – news like this gets picked up and repeated around the world, outside the techie, geek world. It was on breakfast TV news in Australia this morning – on Sunrise for those in Oz. This starts to get people who don’t know what an ebook is, or haven’t even considered buying a Kindle, to start to understand that there is an alternative to paper books. Danger, danger, Will Robinson.
Again, no-one’s saying that paper books are dead, but they’ve officially caught a cold.
What a broke Borders (US) means in Australia
Borders.com.au will be hating this. A lot. They aren’t tied to the US chain in anything more than name, but a little bit of mud has to stick. In these days of branding, using someone else’s brand is a double-edged sword.
Not that Borders AU hasn’t had it’s share of financial strife. It’s owner, REDGroup Retail, was under financial pressure with creditors as recently as late last year, and when they announced a $43m loss, making a filing to the NZ stock exchange that made lots of people nervous. Then there was a round of redundancies in November. More nerves.
There’s that concept again – confidence.
Via Jason Davis’ Book Bee blog