Save Barnes and Noble!

From The New York Times, via Passive Guy:

Barnes & Noble is in trouble. You hear that, in worried tones, when you talk to people in the book business. You feel it when you walk into one of the chain’s stores, a cluttered mix of gifts, games, DVDs (DVDs?) and books. And you really see the problems if you dig into the company’s financial statements.

Revenue from Nook, the company’s e-book device, has fallen more than 85 percent since 2012. Online sales of physical books have also plummeted. At the stores, where business was once holding up, it’s down about 10 percent over the past two years. Several stores — like my local one, in the Washington suburbs — have closed, and many have reduced staff.

The company’s leaders claim that they have a turnaround plan, based on smaller, more appealing stores focused on books, and I hope the plan works. It’s depressing to imagine that more than 600 Barnes & Noble stores might simply disappear — as already happened with Borders, in 2011. But the death of Barnes & Noble is now plausible.

. . . .

The full story revolves around government policy — in particular, Washington’s leniency, under both parties, toward technology giants that have come to resemble monopolies. These giants are popular, because they provide good products and service. But they have also become mighty enough to vanquish their competitors and create problems for society.

. . . .

 

For most of American history, the government viewed giant corporations of any kind as inherently problematic. Their size gave them too much power — to eliminate competition, raise prices, hold down wages and influence politics. So the government passed laws to restrain businesses and occasionally broke up the largest, like Standard Oil and AT&T.

In the 1970s, however, a new idea took hold: Size was not a problem so long as prices remained low. Bigness could even be good, because it promoted efficiency and thus lower prices. The legal scholar Robert Borkwas the most influential advocate for this view, and it soon guided the Supreme Court, the Reagan administration and pretty much every administration since.

But the theory has two huge flaws, as a new generation of scholars, like Lina Khan, is emphasizing. One, prices are not a broad enough measure of well-being. Wages, innovation and political power matter as well. If prices stay low but wages don’t grow — which is, roughly, what’s happened in recent decades — consumers aren’t better off. Two, regulators have focused on short-term prices, sometimes ignoring what can happen after a company drives out its rivals.

. . . .

The book business is looking like a case study. Amazon is taking over, yet has never run into antitrust scrutiny. It has reduced prices, after all. It sells many e-books for $9.99 and hardcover best sellers at a big discount. So what’s the problem?

Plenty. Amazon has been happy to lose money on books to build a loyal customer base, to which it can then sell everything else. “Amazon isn’t primarily concerned about books these days,” Oren Teicher, who runs an association of independent bookstores, told me. “They are far more focused on getting consumers into their ecosystem so they can sell them every other product under the sun.”

But the artificially low prices have created a raft of problems. Fewer books are commercially viable. Publishers are focusing on big-name writers. The number of professional authors has declined. The disappearance of Borders deprived dozens of communities of their only physical bookstore and led to a drop in book sales that looks permanent.

. . . .

“It’s in the interest of the book business,” Teicher says, “for Barnes & Noble not just to survive but to thrive.”

Link to the rest at The New York Times and thanks to Susan and others for the tip.

PG suggests the fundamental purpose of antitrust law is not to benefit the corporate losers in commercial competitions, but rather to benefit consumers by promoting competition in a variety of marketplaces.

These laws are not intended to punish successful competitors because of their size or to permit courts to choose winners and losers in the marketplace.

In an active marketplace, consumers will be benefited by the improvements in products or services and/or the lowering of prices that result when sellers are competing for the business of buyers. Each seller is focused on capturing and holding the loyalty of buyers by providing a more attractive product or service to those buyers. Buyers vote with their dollars, but no seller can assume that their customers today will be their customers tomorrow unless the sellers continue to attract and serve buyers with features the buyers desire tomorrow, whether they be price, selection, service, a better purchasing experience or whatever buyers value tomorrow.

Consumers are subject to the threat of substantial damage in a market that is not competitive because established sellers are relying on something other than the free choices of buyers to select the most attractive product or service by interfering with the competitive process.

How has Amazon beaten many of its competitors? Better prices, certainly, but also with better service (2-day delivery with Prime and real-time updates on delivery status, for example), a huge selection of goods, lots of customer reviews to provide additional information to prospective purchasers and easy returns and refunds if a product does not satisfy a customer.

As compared with physical stores like Barnes & Noble, an Amazon customer can choose from a far, far wider selection of books than any Barnes & Noble store carries. An Amazon customer can typically purchase books for lower prices than are offered at a Barnes & Noble store. An Amazon customer can purchase a book when a Barnes & Noble store is not open or not convenient to visit or staffed by sullen clerks working for little more than minimum wage.

An Amazon customer can purchase books from independent authors instead of large corporate publishers exercising monopoly power by offering authors substantially identical terms and compensation as other corporate publishers do. When an Amazon customer makes such a purchase, she can do so knowing that much more of the price she pays for the book will be received by the individual author than would be the case if a purchase was made from a corporate publisher. A savvy purchaser will know that she is not subsidizing the victimization of authors by corporate publishers as has occurred on several occasions during recent memory.

 

 

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Tom Wolfe

Author Tom Wolfe has died.

From The Wall Street Journal:

Tom Wolfe, the best-selling alchemist of fiction and nonfiction who wrote “The Bonfire of the Vanities,” “The Right Stuff” and countless other novels and works of journalism, died of pneumonia in a New York hospital Monday, said his longtime agent Lynn Nesbit. He was 88 years old.

Mr. Wolfe was a creator of New Journalism, a bracing watershed in immersive reporting and visceral writing that removed the authorial distance and plunged readers into situations such as the early years of America’s space program.

In “The Bonfire of the Vanities,” he cast a scorching lens on the mores of New York City’s philanthropists during the flush years of the 1980s. A number of years later, his novel “A Man in Full” examined race relations and swashbuckling property developers in the South.

Mr. Wolfe’s scalding humor and creative language introduced into the lexicon expressions such as “Radical Chic” (when describing Leonard Bernstein mingling with activists in his Manhattan apartment) and “social x-ray” (a term for the Upper East Side hostesses whose anorexic frames masked social ambitions executed with Samson-level strength.)

Link to the rest at The Wall Street Journal

Here are a few quotes. Some are from Wolfe himself, others are statements his characters have made in his books.

I do novels a bit backward. I look for a situation, a milieu first, and then I wait to see who walks into it.

. . . .

I went to see the Beatles last month… And I heard 20,000 girls screaming together at the Beatles… and I couldn’t hear what they were screaming, either… But you don’t have to… They’re screaming Me! Me! Me! Me!… I’m Me!… That’s the cry of the ego, and that’s the cry of this rally!… Me! Me! Me! Me!… And that’s why wars get fought… ego… because enough people want to scream Pay attention to Me… Yep, you’re playing their game.

. . . .

I didn’t know what in the hell it was all about. Sometimes he spoke cryptically, in aphorisms. I told him I had heard he didn’t intend to do any more writing. Why? I said.

“I’d rather be a lightning rod than a seismograph,” he said.

. . . .

Sherman made the terrible discovery that men make about their fathers sooner or later… that the man before him was not an aging father but a boy, a boy much like himself, a boy who grew up and had a child of his own and, as best he could, out of a sense of duty and, perhaps love, adopted a role called Being a Father so that his child would have something mythical and infinitely important: a Protector, who would keep a lid on all the chaotic and catastrophic possibilities of life.

. . . .

He sounded like Jean-François Revel, a French socialist writer who talks about one of the great unexplained phenomena of modern astronomy: namely, that the dark night of fascism is always descending in the United States and yet lands only in Europe.

. . . .

Everything was becoming allegorical, understood by the group mind, and especially this: “You’re either on the bus … or off the bus.”

. . . .

Las Vegas is the only town in the world whose skyline is made up neither of buildings, like New York, nor of trees, like Wilbraham, Massachusetts, but signs.

. . . .

My entire career, in fiction or nonfiction, I have reported and written about people who are not like me.

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Amazon to Release New Kindle With Rechargeable Protective Case

From The Wall Street Journal:

Amazon.com Inc. is betting on batteries to drum up more sales of its popular line of Kindle e-readers.

In a first for the Seattle online retailer, Amazon will soon sell a higher-end Kindle with a rechargeable protective case for extended battery life, according to a person familiar with the matter. This removable cover will allow the Kindle to be thinner than earlier devices.

Also under development is a separate Kindle case with a battery that can be charged using solar power. It is unlikely this case will be released in the immediate future, another person familiar with the matter said.

. . . .

The latest devices would help to solidify Amazon’s dominance in e-readers. Rivals likeRakuten Inc.’s Kobo and Barnes & Noble Inc.’s Nook have failed to gain significant traction, in part because of Mr. Bezos’s stated commitment to selling devices at or near cost to keep prices low.

. . . .

Because the devices are durable, one challenge has been compelling readers to buy upgraded versions, according to people familiar with the matter, though Amazon says it is content to make money off e-book sales even for older model Kindles. The company has never released details about Kindle sales.

Link to the rest at The Wall Street Journal (Link may expire) and thanks to Pam and others for the tip.

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