The New York Times published an article that tells of the pending demise of Borders, the US bookseller. (Click here for article) Regular readers of this blog will not be surprised. Last September we told the story of the downfall of Blockbusters, the bricks and mortar rental outlets for movie rentals. (Click here for blog) Blockbusters failed to respect the competition presented by the likes of RedBox and Netfile.
Borders, and other booksellers, failed to respond quickly enough to the introduction of the various e-readers and the electronic delivery of books. Another NY Times article published before the holidays predicted that the number of e-readers could reach 10.3 million by the end of 2010. We are still waiting on Christmas sales numbers. (Click here for article)
The problem for bricks and mortar stores is the opportunity cost of shopping there. I went to 3 different bookstores looking for a particular trade paperback, to no avail. That took 3 hours of my time which, at my tutoring rate, was over $100. That is too much to pay for a paperback. Yesterday, I ordered it from Amazon. $7.99 plus tax and 1 minute of my time. Much cheaper.
News from the electronic trade show in Las Vegas tells us to expect more tablets capable of displaying e-books. Due to increasing returns to scale and new entry, the cost of these devices will fall throughout 2011 and as they do, more people will buy them and the demand for e-books will increase. Barnes and Noble may be next in the US, and we will likely see some restructuring in Canada where Indigo dominates the market through Indigo/Chapters/Coles.
One bookstore that I’m sure will survive however, is Powell’s in Portland Oregon. If you’ve ever been there, you know what I mean. If you haven’t, you don’t know what you’re missing.
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