Microsoft's partnership with Barnes & Noble is probably welcome news in many publishers boardrooms. After all, this represents the hope that someone can loosen Amazon's grip on reading public and hence loosen the grip on those that supply that content.
But does anyone really think that Microsoft is getting into the book game because they care about books? (Thanks to John Cutcher for that question). Their lack of caring about the industry and their being out of touch with the needs/wants of the end consumer is what caused their previous failures here. No, if anything, Microsoft going into business with Barnes & Noble signals something more ominous in my opinion. It signal's Barnes & Nobles' departure from the book industry and formal entrance into the technology industry.
Up until 15 years ago or so, bookstores (large and small) were the main conduit of customers for books, and since mostly what they sold were books, everyone was happy to live in a bubble called the book industry. We were free to create our own rules, set our own standards, and be proud that our work was not only for profit, but was sort of a public service. There was always contention between the publishers and the retail community, but it was genteel, as each side realized that they ultimately needed the other to survive. Issues got resolved and there were enough retailers and publishers to keep the balance of power fairly well distributed.
The rise of the internet certainly disrupted that status quo. As the public became first aware, and later enamored with the ease of purchase through the internet, the balance was thrown off as a significant conduit of customers came in through the 'new' medium. But, for a long time, that disruption merely changed the balance, it did not upset the apple cart.
Fast forward a few years and now our hand held devices (phones and tablets) have further disrupted the way that customers come to the internet for their sales experience. Software has completely thrown off the balance in the book industry as many customers can now not only purchase, but consume book content in a completely different way.
It can be argued that Borders slowness to recognize the coming of these latest 'platforms' was a key in the company's legendary collapse. That collapse has done as much to throw the balance of the book industry off as anything. It can also be argued that Barne's & Noble's long investment in online retailing and the Nook platform, have kept the company alive through all of the turbulence.
The result, aside from Barnes & Noble, the four or five largest customers of every publisher have completely turned over into different entities. Even the major wholesalers, Ingram and Baker & Taylor, who were used and abused by Amazon are in deep peril as the number of retail partners they have continue to diminish. The new behemoths are all technology companies, Amazon, Apple, Google, and to a far lesser extent, Sony.
With Barnes & Nobles' departure to the technology industry, I think it's fair to say that book industry that we all know and love is on it's deathbed. The remaining players in this industry need to come to grips with this fact, and soon, or risk their own demise.
The good news is that customers for books and book-like products is still out there, consuming as much as ever. There is still a very valuable place for those who are dedicated to bringing the written, spoken, and viewed word to minds of the world. What we need to recognize is that the rules have all changed, our standards and trade organizations are losing their relevance every day, and that really the new retail giants do have some objectives in alignment with those of publishers. We also need to recognize that the new customer-conduits have no investment in the 'magical' book.
These retailers only worry about a few things: making customers want to do business with them, and selling them whatever products they want and need. Does it really matter whether it is a book or a movie? A game or a game controller? A song or sheet music? Not to the retailer. What matters is that they have the ability to fulfill the needs and wants of their customers. Publishers are suppliers of but one of the segments of products a customer is looking to purchase.
To survive and thrive, publishers need to accept their demoted status in the balance of power and move on. The reading public still wants their products and services, and the more innovative those products and services are, the more the retailers will need to have them in their virtual catalogs. Publishers need to work with the new retail giants in order to best understand how to build, market, and promote their products in a way that achieves the maximum return for all involved.
My hope is that as the dust settles on all the disruption in the industry that a great new creative spirit will fundamentally change the products we create for the education, entertainment and shear joy of the reader. Long live the book customer! (wherever they may be).