I began working in the music retail business in January of 1988 at JR’s Music in Woodfield Mall in Schaumburg, Illinois. When I started there as a manager trainee, the best selling music format was the vinyl LP, cassettes placed a distant second, and all of the CDs were contained in a single waterfall rack near the counter. By the time I left less than two years later, CDs had replaced LPs as the dominant format, cassettes were still in second place, and LPs were relegated to a few bins in the back of the store.
Lesson learned? Formats change, content marches on.
I bounced around from retail store to retail store for the next eight years, and most of that time I was selling CDs. The best of the companies I worked for was a local Chicago chain called Rose Records. When I was hired there in 1991 they were growing—adding new stores at a deliberate and reasonably steady pace. The hours sucked, the pay was worse, but I loved the product. And Rose Records had the best health benefits of any company I’ve ever worked for, including Hasbro. That’s extraordinarily uncommon in the retail business, and I knew it. My wife and I felt so confident in my upward mobility with Rose that by the beginning of 1993 we set off to have our first child. Over the course of the pregnancy Rose Records went from growth company to bankruptcy. They closed my store and laid me off while I was still on paternity leave, my daughter all of five days old.
Having survived a tectonic shift in data storage formats, and years still before the ravaging black scourge of Napster made its presence felt, what could have brought them down so fast?
Well, Best Buy moved into the Chicago area, quickly followed by Circuit City. Both of these discount appliance chains saw CDs as loss leaders: little impulse buys they could sell for less than wholesale cost in order to build a base of regular customers. If you’re used to going to Circuit City for your $10.99 CDs, which you’re sure to buy fairly often at $5.00 off suggested retail price, you’ll go back when it’s time to buy a new dishwasher, or water heater, or vacuum cleaner, or whatever. No worries that that CD they sold for $10.99 cost them $11.73. And as long as the distributors (no strangers themselves to the occasional underhanded bit of price-fixing) got their $11.73 they didn’t care (or didn’t seem to, anyway) what you sold it for, never mind that they would someday soon wake up with fewer retail customers and their business focused in on two retailers who could then dictate terms. That might start to sound a bit familiar to publishers. . . .
But what about the actual record stores—small businesses that couldn’t make up a $5.74 per unit loss with appliances, service contracts, and VCRs?
They went out of business.
And not just some of them. Not just the ones that were poorly managed.
Basically, all of them.
What was left of the music retail business in the Chicago area were a few stores that transformed themselves into head shops. Best Buy never did get into the bong business. And a few of them hung on selling used CDs and records. Eventually Circuit City went the way of all flesh, too. And as though there actually is some cosmic justice in the world, the digital music revolution (and a bloody one it was) robbed Best Buy of their power to control the music business before they ever got a chance to wield it. Now they’re being undercut by iTunes.
Though I refused to darken the door of either a Best Buy or Circuit City store for years, I recently went to my local Best Buy with the intention of picking up the new Decemberists CD. When I saw the $18.99 price tag, I put it back in the bin, went home, and bought it from iTunes for $9.99. I only listen to music on my iPod or computer now anyway. What good is a CD except as space-inefficient backup media? I bought a 500GB external hard drive for less than $30, so all my music is now in three places: my computer, my iPod, and my back-up drive. I enjoy NASA-style triple redundancy. My music is as safe as it needs to be. My entire CD collection has long since been sold off. As far as I’m concerned, the format is over.
So is all this same stuff now happening to the retail book business? The paper book is going the way of the LP, cassette, eight-track, and CD. The brick-and-mortar bookstore is irrelevant in the face of the almighty Cloud, and all that after the big chains (Barnes & Noble and Borders) ran the independents out of business with the same sort of discount price wars that Best Buy and Circuit City waged with CDs . . . Borders is joining Circuit City on the losing end, and Amazon is already replacing B&N the same way iTunes bulldozed Best Buy.
If you’re a reader, a book consumer, by now you’ve heard the tales of woe coming from Borders, at least. It is indeed sad that they closed so many stores, dumping even more innocent former taxpayers onto the unemployment rolls, and making people like me, who love . . . truly love the bookstore experience worry that soon that experience will all be another fond but distant memory. Record stores went out of business, in Chicagoland, anyway, due directly to unfair competition. Is the same thing happening to bookstores?
In his article “Scenes from the Bookpocalypse: The Closing of the Local Borders,” Chuck Wendig wrote: “People still want books, it seems. They just don’t want to pay full price.”
This is true. Books are still selling—people are still reading. And everyone is either broke or afraid they soon will be broke, so we not only don’t want to but in most cases can’t pay full price for anything.
Wendig described the sad reality of retail liquidation in his beautifully written and evocative piece, in which he muses about whether he should buy any books at liquidation prices. “. . . Borders,” he wrote, “isn’t paying out, and I don’t even know if the authors of these books will ever see what they’re owed from these sales. And I think, if I want to buy these books I should at least go home and buy them from Amazon. Of course, isn’t that what got us here in the first place? Is it? Isn’t it? I don’t even know.”
I’m pretty sure I know. It isn’t.
Amazon isn’t responsible for what’s happening at Borders. Amazon started as an online bookstore but has evolved to become to the early 21st century what the Sears & Roebuck catalog was to the late 19th and early 20th centuries: the place from which anyone can order anything. Barnes & Noble is still primarily a bookseller, and is also facing financial troubles, but they aren’t (at least so far) closing large blocks of stores. I’m not sure about Books-A-Million or Hastings, which are smaller regional chains. There are plenty of thrillers and romances on sale at my local supermarket and Target stores. Wal-Mart and Costco are selling huge quantities of their small selections of books.
Borders is getting hit hardest, or at least getting hit first, but not because Amazon is undercutting them on price. Borders offered discounts on best sellers, liberal coupons for their club members like me . . . . for a while I pretty much only bought new books at Borders, and only when they emailed me a 40% off coupon, which meant I bought the book for cost. As I said above, if there was a loss leader price war like there was in the music retail business, like Circuit City, Borders was a combatant, not a victim.
Borders is in trouble for a lot of reasons, which can be divided into two categories: stuff that was their fault, and stuff that wasn’t their fault.
No one at Borders (as far as I know) was directly responsible for either the credit collapse or the real estate bubble that took value away from existing stores and made opening new stores virtually impossible at the same time consumers suddenly had less money to spend on anything, books included. But then Borders did invest heavily in big sections full of dead-on-arrival CDs, and the peaked-fast-now-on-their-way-out DVD. I used to buy DVDs like crazy. I recently wandered through the liquidation sale at my local Blockbuster (hmm . . . this is happening in the home video business too, isn’t it?) and walked out with nothing, even at 70% off. Xfinity On Demand, iTunes again, Netflix . . . what the hell do I need to buy a DVD for?
And there are people who have a smart phone, an iPad or other tablet, or a Kindle or other reader who ask the same question when it comes to paper books. Amazon led the way into the e-book future with the Kindle, B&N got on the wagon quickly and effectively with the Nook, but Borders wandered around aimlessly in the e-book wilderness, a day late and a dollar short.
There are people in publishing who didn’t learn from the mistakes of the music business and are now repeating them, entirely as they were doomed to do. And likewise home video, and now it’s starting in the video game business, too.
It’s tough out here for everybody, in Great Depression II, but there are rays of hope, even for former Borders employees who are joining me on the dole in a nearly-impossible job market. I found this from a local radio station’s web site regarding Borders stores closing in Louisville, Kentucky:
“Kelly Estep manages Carmichael’s [an independent bookstore] in Louisville. She says it’s not clear what effect the closures will have on independent shops.
“ ‘Even people who buy a lot of books from us will still be buying books in other bookstores. That’s something that people who work in the book world always know. So does that mean that maybe someone who bought 50 percent of their books from us will now buy 70 percent of their books from us . . . possibly,’ she says.”
Just as the e-book “revolution” is already proving to be a boon to independent publishers, the contraction of the big retail chains will very likely be beneficial, in the medium-term, for independent booksellers. What do I mean by “medium term”? In the short term—the next few months—more unemployed people is just bad for everyone, fewer stores to sell books into is bad for publishers and authors, more vacant retail space is bad for neighborhoods and tax bases. In the long term, no one can know. It used to be that you could look ten or fifteen years into the future and have some reasonable chance of predicting trends at least on the macro level. As we continue to accelerate toward the Singularity, though, well . . . good luck. In fifteen years, for all I know, I’ll be paying somebody 99 cents to download into my brain the memory of having read the book. Why bother with all that reading? And I really don’t think I’m exaggerating much there.
But in the medium term, let’s say five years or so, maybe we’ll see some independent bookstores at least survive if not new ones open. We might see some more specialty stores, too, that sell only SF or only mysteries. There are a few of those already. I’d love to have an SF bookstore in my neighborhood.
And how about this: Rose Records is a distant memory, but not all Borders stores are closing, at least not yet. The novelbooks blog at the web site for indie bookseller Novel Places points out: “. . . Borders is declaring Chapter 11, which means they will still exist during and after the process is complete, and they will still be a major competitor to the independent bookseller. The independents near a closing Borders will have an opportunity to attract those customers. The Borders near my store isn’t closing, but I could be hiring an employee or two.”
I went to my local Borders in Redmond, Washington last Saturday afternoon. I bought a couple of little notebooks. It was open, stocked with new books, and staffed with employees, just as though the “bookpocalypse” never happened.
And you know what? Independent record stores are re-emerging from the wreckage of the end of the 20th century, too—smaller, local, more specialized, but there. Comic shops survived the collector bubble of the 1990s. I went to my local comic store in the same mall on Saturday, too, and bought a couple comics.
Borders might not make it, but bookstores in general will survive this, and just like the rest of the survivors of the first Great Depression of the 21st century, they’ll come out a bit bloodied, but maybe a bit the wiser, too.
Philip Athans is the New York Times best-selling author of Annihilation and ten other fantasy and horror books including the just-released The Guide to Writing Fantasy & Science Fiction. Born in Rochester, New York he grew up in suburban Chicago, where he published the literary magazine Alternative Fiction & Poetry. His blog, Fantasy Author’s Handbook, is updated every Tuesday, and you can follow him on Twitter @PhilAthans. He now resides in the foothills of the Washington Cascades, east of Seattle.