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Should Authors Buy Borders Or Start A Cooperative Bookstore Chain

At the market close on Friday, the day after Thanksgiving, the market cap (total stock value) of the Borders Bookstore chain was less than 65 million dollars. No, I don't have 65 million dollars I can spare, but self publishers do. I'm not thinking about self publishers like myself who have started their own publishing companies, but those authors who have paid fees to get their books printed. Nobody has an exact count on how many authors have published books outside of the traditional system since the triple zeros came up on the calendar eight years ago, but it's on the order of a million individuals in America alone.

The biggest complaint I hear from those authors is that their books never got a fair chance to compete with the big trade books on bookstore shelves. If those authors could organize and pony up a hundred dollar each, they could make an offer for the entire Borders chain. I suspect that Borders main stockholder wouldn't be too happy with the offer, and it wouldn't be the ideal match in any case. For one thing, Borders is losing money at a rapid pace, and while returning all of the current inventory may offer a bit of revenge for authors who were never stocked on the shelves, the returns may only be good for credit towards new titles from the same trades. And I don't think the superstore format would work very well for the title mix that the newly empowered shareholders would chose to stock. Imagine walking into a warehouse sized bookstore split into three equal sections: memoir, fiction, poetry and sundries.

Kidding aside, it seems to me that all of the author services companies, or self publishing companies as some style themselves, have large and active communities of authors who are interested in gaining wider readership for their books. Many authors have already put their money where their hearts are, paying thousands of dollars for promotional campaigns which primarily benefit the bottom line of the company they've paid to get published. If just one percent of those authors clubbed together to form a bookstore cooperative ten thousand members strong, at just $100 each, they'd have a million dollars in seed capital to open a mini-chain of small bookstores to exclusively stock their books. I'll even volunteer a loaded name for the chain, "Imagined Memories."

It's not a business model for an outsider. But given tens of thousands of authors who are willing to spend money to see their books on shelves, I can't think of a more efficient way of doing it. While authors could invest the same pool of money in buying shelf space at the existing bookstores through cooperative advertising (the same way the major publishers purchase premium shelf space), the number of titles that could be displayed at any given time would be small, and the atmosphere, competing with classics and name brand bestsellers, would be wrong. If there's any potential in working with the existing chains, it might be leasing space for a store within a store, but I doubt a new cooperative would come away with the long end of the stick.

Starting a small bookstore chain may sound crazy, but I think it has more upside than downside. For starters, it would help give the most active advocates of the fee based self publishing approach something concrete to invest their efforts in, rather than remaining trapped in an endless circle of discussion list postings. Handled properly, the new venture would get plenty of free publicity in the media, a value that might even exceed the cost of setting up the cooperative. Perhaps most importantly, it would give a large number of human beings a reason to work together on a positive project - setting up some small bookstores at a time when they're a vanishing breed. Stores might even be partially staffed with volunteers, and could go the coffee shop route to provide a nice public space and help pay the rent. Even the downside, losing the small amount of money invested, has a potential upside. It could be an investment loss rather than a hobby loss on taxes (I think:-)

Just watch out for scam artists and cooperatives that are set up to provide a living to the executives.

10 comments:

Anonymous said...

Interesting idea. What sticks out is the fact that together, self publishers and small presses probably have more power than big presses and big chain bookstores - the problem is organizing. Maybe the right move wouldn't be to open a small press bookstore or to buy out a chain. Maybe there is another "right move" for the small presses. The problem is - organizing.

The IBPA (used to be PMA) is the largest small publisher association I know of, maybe they should try organizing something like this.

Bryan

Morris Rosenthal said...

Bryan,

If by more power you mean more resources, that would certainly be true, but most individuals aren't going to commit a significant share of the resources to something that may be a hobby for them, while corporations are happy to carry all the debt they can get.

I used to be a member of the PMA, wrote an article for their newsletter once, and I know some people report they learned a lot at PMA university. After reading a few issues of the newsletter, I just didn't get anymore out of it, lots of pointless Top 10 lists, and success stories that displayed more luck than planning (though there's truth in that).

But they seemed to want to be everything to everybody, and were top heavy with services that publishers can get anywhere, rather than focused on those items that most publishers can't get anywhere.

That and I'm just not a group animal.

Morris

Mick Rooney said...

Morris,

Certainly a stirring idea, but at $65 million and 6000 self-publishing owner/shareholders, I can see the boardroom being very hot and smokey!

How about this as a possibility. AuthorSolutions come in and take the Borders chain. They hold a sizeable share of the subsidy POD market through AuthHouse and IUniverse, and would have a more vested interest in a chain of brick n mortar outlets. While I have little time for the ethos of a company like AuthorHouse and their methods and misleading promotional verbage about the POD industry, I think it is a more real option in light of the moves by Amazon to buy Booksurge in an effort to move the whole digital publishing model from upsell to author through print and sale 'in-house'.

http://mickrooney.blogspot.com

Morris Rosenthal said...

Mick,

I'm not sure the subsidy POD market sees themselves as having an interest in putting books on shelves. That's not their business model, and I don't have any reason to beliee they have any expertise in book retailing or title selection.

I don't really expect authors of the world to unite and act, but I think that's the only chance most of those using non-traditional publishing companies have of seeing their titles on store shelves. I'm also not saying it's a logical economic move, only that it's possible, if getting shelf space is the goal.

Morris

Thomas Huynh said...

From what I know of other authors, I think that Borders would go bankrupt for sure. Authors make terrible businesspeople. I have an MBA and I still think I'd have a hard time running any book business because I don't believe in gambling!

Morris Rosenthal said...

Thomas,

Think "investment loss."

Morris

Michael said...

Seems way more plausible for the whole thing to be a digital storefront rather than a bricks-and-mortar thing, with a classy digital store front and customer comments capability not unlike Amazon, but limited exclusively to small press books not available on mall bookstore shelves like Borders, Barnes and Noble, etc., this with a yearly membership fee to the small presses and fulfillment responsibility being thrown back on the small press publishers with some way of enforcing customer satisfaction, perhaps via the membership contract.

It would need a catchy name like, what, maybe: "Indy Book Heaven" or some such? (IBH.com)

Just seems a lot more plausible, now that people are so comfy shopping online. Each small publisher could have their own even very elaborate digital storefront within the aggregating site. I guess it would end up being kind of like going to an Independent publisher's "mall."

Just an idea.

M. Kane
Kalavinka Press

Morris Rosenthal said...

Michael,

I certainly understand the plausibility point, but that's not what the Borders thing is about. Trust me, I hear from lots of authors who have paid somebody to publish their book and their #1 complaint is that nobody will ever see it on a bookstore shelf. There's no need for another online bookstore to sell these books, there are many already.

Morris

Ricardo said...

Hi Morris Rosenthal

Thanks for your great book bz-industry-culture insights. Your blog entry on the demise of Borders snagged me. I want to suggest a crazy thought of my own and I hope you can comment.

The future of the bookstore, if there is one, is as a kiosk with P-O-D printing,for those who still want a physical book, and digital ebooks for the rest. It should be located in a mall, or coffee shop, saturday market, etc. It should provide a few popular titles, lots of printed promotional fliers, computers with catalogs of available ebooks and personnel with the expertise of librarians who can help the customer find desired books.

The internet archive bookmobile is the closest model to this idea, but only as to printing an ebook. What is missing is an "iTunes" for ebooks, where any ebook author can list his-her books. Amazon is is offering this for the Kindle, but it takes 65% of the sale, and the
Kindle book cannot be printed.


Ricardo
amigoaudio.com

Morris Rosenthal said...

Ricardo,

While I think there may be a place for book kiosks in the future, as proven the Red Box of DVD's, I don't see it taking the place of bookstores, even if bookstores cease to be viable businesses. I don't see a great advantage of driving somewhere to a kiosk for a book over ordering one from Amazon.

The point of bookstores is that they are full of books. Book superstores stocking 100,000 plus titles are using most of the inventory for wallpaper, the profits are driven by bestsellers and co-op payments, not by the titles that sell one copy a year or the endless rotation of returns. But if you take away the wallpaper, you have an airport bookstore, and those have never been destination stores.

And keep in mind that making quality DVD's in a kiosk is relatively trivial, while making quality books is a challenge and then some.

Morris