17/08/07

When HMV Shuts Up Shop - Then What?

One of my ongoing, late-night publishing speculations - up there in likelihood with Penguin being sold off to HarperCollins, or Canongate sold to Bloomsbury - is the idea that “beleaguered high street retailer HMV” will pull the plug on the Waterstones chain of bookshops because there’s just no money in books anymore.

Of course, they won’t - but it illustrates a point. And that point is that bookselling in the UK is practically a monopoly. No, that’s not my point - that got investigated and cleared. My point is that publishers don’t appear to be doing very much to protect themselves should bookselling in the UK become a monopoly. Or if their biggest customer went under.

In any business putting all of your faith in one customer is very risky. And in any other business the corporations would, either as individual entities or as an alliance, be looking at new ways of getting product to market without going through the channels of one, big, expensive, customer.

But what are publishers doing to develop new channels? Is there a publishing-wide alliance to take on Waterstones, or for that matter Amazon? Are publishers using their websites to develop direct to consumer channels? No, they’re not. Well, actually some are - but I don’t think they’re going far enough. What are publishers doing to reverse the decline of choice on the high street in the light of increasingly powerful and polarising volume-oriented retailers?

In this climate, and for as long as there remains a lack of concerted reaction to the monopoly of the high street, then publishers are at risk of their primary route to market cutting off their connection with their consumers.

There is an argument that in this situation, publishers will always remain at risk of being stiffed - be it on price, “marketing support” fees, or just stocking good books - by a retailer who has the lion’s share of the market.

If - as we are seeing with the entry of Sainsbury into the supermarket blitz on books, and Tesco’s promotion of the Booker List (which Waterstone’s wouldn’t previously touch) - supermarkets do steal market share from Waterstones, then the overall effect on price and margin is going to make things very tough as well. It’s very hard to see a light at the end of a tunnel at the moment.

Furthermore, should another retailer shut up shop because they can’t make enough money out of selling books, then I imagine the next biggest player (Amazon) would quickly step into Waterstone’s shoes, and to continue to employ many of the same, unpopular, tactics. The situation wouldn’t change.

It’s really frustrating to watch this play out in an industry that we care about passionately. But sadly my guess is that dspite this situation, publishers will continue to sell books at insane discounts, devalue their product, and pay for the privilege, rather than taking on the simple challenge of finding new ways to sell books themselves.

Posted by Peter Collingridge in Personal, Publishing.