Monday, February 21, 2011

The bookshop (part 2)

Since penning (is that verb appropriate for an electronic blog) my post on the A&R/Borders debacle, there has been a great deal of commentary.

I took heart from the comments in New Matilda from a bookstore owner who ascribed the failure to "megalomania". As he says "Borders, like so many other short sighted businesses, sacrificed profitability for market share. They poured huge money into extensive stockholdings. Their hope was that if they stocked everything, shoppers wouldn’t look elsewhere." The story is the failure of the Border's model and how it then infected the A&R/Whitcoulls business.

That said I'm sure the clever people (I'm sure they all have MBAs) who ran Pacific Equity Partners thought that the addition of Borders to their existing business with the 30% market share it gave them were going to succeed in the category killing game.

A comment on that post drew me to the blog from Scribe Publications. This useful piece points out that RED group might now be blaming the non-decision on parallel importing, but that they never made a submission. He rightly tags the business model but still wants to suggest that the demise is Australian dollar and GST related.

In truth e-books may well start causing a demise - but they are equally likely to grow the overall reading category. Few people who consciously buy online a book they can get off the shelf or in a few days from their local bookseller. They may buy on-line as an impulse buy (because the amazon link always comes up if you Google search - but A&R and Dymocks do to if you search Google Books).

The lesson is - I repeat - far more about category killers. The A&R half of the story is very much about the industrial damage caused by the ACCC approving the A&R acquisition of Borders. A retailler with 30% market share has to keep growing share to kill off more competitors or collapse under debt....neither is good for consumers.

Note: Sort of funny that Scribe Publications are the publishers of the very dodgy The Force about which I ranted.

Novae Meridianae Demetae Dexter delenda est

No comments: