A World Without Borders: The Long Road To Collapse
We’ve now heard the death rattle of the Borders book chain and are waiting for the two liquidation companies that bought the bookseller out to throw the dirt on its grave.
But how did Borders get to this point? I’m willing to bet a lot of people will place the blame squarely on ebooks. And I’m willing to bet that they are wrong.
The downfall of Borders began, not with ebooks, but with a series of bad management choices going back over a decade. Here are a few highlights:
Bad Retail Decisions
Before ebooks even hit the mainstream, Borders’ management was making very poor decisions. When retail was moving towards large “superstores,” Borders was trying to carve out a niche in boutique stores. Those boutique stores never really became profitable and dragged the company down.
Website Woes
The biggest mistake Borders made, that I think brought on their downfall, was turning over their website to Amazon in 2001. By that time Barnes & Noble had a successful website up and running. As e-commerce became more popular, Borders fell further behind. They couldn’t catch up.
Ebooks are the Final Nail in the Coffin
Then, once Borders had their own website going strong, ebooks hit mainstream America. It seems Borders have always been one step behind.
I give them credit for eventually getting into the ebook game. But they sold third-party eReaders like Sony and Kobo. If Borders had launched their own eReader on their own platform just a few short years ago, perhaps bankruptcy could have been avoided.
The Barnes & Noble Comparison
As a comparison you can look at Barnes & Noble. They are also a brick-and-mortar bookstore. However, they kept control of their own website and was very aggressive when they entered the ebook game in 2009. They even pushed a tablet eReader onto the market before Amazon.
Barnes & Noble isn’t going anywhere anytime soon. They have a pretty solid business model and senior management appears to be doing a great job integrating traditional print books with their digital strategy. This is achieved by giving Nook owners incentives to go to the stores to get discounts on merchandise and read any ebook for free (for up to one hour).
Barnes & Noble is using their stores as an integral part of selling eReaders and ebooks. This is something Amazon can’t do because they don’t have any brick-and-mortar stores.
A World Without Borders
The loss of Borders is huge in the world of bookselling. There’s no denying that. Now Barnes & Noble is on their own with no competition on the level that Borders provided.
What does this mean for book publishing as a whole?
It’s going to hurt publishers. These chains buy massive quantities of books, and without Borders, the publishing houses are losing a large customer. Publishers will feel the pain, at least in the short term.
Long term, however, they will bounce back. As long as they embrace ebooks more, eliminate the anti-consumer DRM, and find that “sweet spot” of ebook pricing, I think publishers can bounce back quite nicely and become even more profitable. They just have to keep up, and embrace, emerging technology.
Finally, sometimes the truth hurts. Large corporations come and go. It’s the nature of the capitalist beast. No one thought airline giant Pan Am would collapse like it did. Read this large Wikipedia list of large corporate failures over the decades. It shows that no company is immune from bad management and economic factors that are beyond their control.
RIP Borders
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- Borders Files For Chapter 11 Bankruptcy
- Future Of Borders Hanging By A Thread; With A Knife Ready To Cut
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