Books without Borders – Has the Internet killed off the giant bookseller?

In the film You’ve Got Mail, Joe Fox (Tom Hanks) espouses to Kathleen (Meg Ryan) the benefits of Fox Books, a chain store similar to Borders, and then watches as her independent book store goes under, whilst his mega-chain – and their romance – flourishes.  Now, it’s the turn of Fox Books, or Borders itself, with the latter’s imminent bankruptcy reported in the Wall Street Journal.  For Australian readers, the US arm is not to be confused with Borders Australia, which is separately owned by REDgroup.
 
The word on the street is that Borders has not coped well with the impact of Internet book sales, and that rents and declining revenues have forced it into an untenable financial position, requiring the protection of Chapter 11 to close a significant proportion of its 674 stores, with the attendant impact on its 19,500 staff.
 
However, it does not appear that this is simply a case of Borders ignoring the Internet entirely, but rather that its strategy may have been too late, or not worked sufficiently well.  It’s reported that Borders relinquished its Internet operations to Amazon in 2001, re-launching its own site seven years later, well after Amazon had created its own Internet phenomenon, and the customer loyalty associated with it.
 
This new development highlights that time for debate about the impact of the Internet is now over, and that retailers are finally feeling the pointy end of the stick.  Only a month ago, Australians were exposed to full page newspaper ads by retailers irate that online sellers were biting into their normally hot Christmas revenues, seeking a change to tax laws to create a level playing field. 
 
In 2009, the Australian Productivity Commission wanted parallel import restrictions (PIRs) in the Copyright Act repealed so that Australians could pay less for books.  The Australian publishing industry lobbied hard against this move, concerned that publishers would have to enter global deals with larger, overseas players, and that Australian cultural relevance would be lost.  In other words, whilst PIRs might be one of the last remaining examples of protectionism in this country, it’s justified, according to Australian printers and publishers.  The Government seemed to agree, because the Productivity Commission’s recommendations were largely set to one side.
 
The news about Borders potentially shows that the whole debate about PIRs has become irrelevant.  In Australia, PIRs have their limits.  The Copyright Act permits consumers to buy books over the Internet, so long as they are for personal use.  It is even easier to down load them directly onto one’s iPad, Kindle or Kobo.
 
It is at this point that Yours Truly needs to put up her hand and admit that to argue (as she did in the National Times) that we must ‘look before we leap’ into this virtual world, could mean we miss the boat entirely. 
 
What remains though, is the question of how the world of hard copy and soft copy books can – and should – co-exist.  Mark Coker, chief executive of Smashwords Inc., has reportedly said in response to the Borders’ news: “Once physical shelf space is gone, it’s gone forever.  If you remove books from our towns and villages and malls, there will be less opportunity for the serendipitous discovery of books.  And that will make it tougher to sell books”.
 
Which brings one to personal experience.  Yours Truly’s dabbling in the world of e-books over Christmas was at once enthralling, but also strangely disengaging.  Enthralling, because one could instantly download 10 books onto the iPad from the comfort of one’s back yard porch.  What a rush!  Disengaging, because the copy often seemed substandard in the e-book version (many typos, page numbers often lacking, why such a lack of care?).  Hitherto unrecognised habits could also not be indulged.  Who knew – until faced with a text-filled screen – how much one missed the joy of flicking back to a great section of a book, or to check the name of a character, and actually feeling the paper in one’s hands.  It left a strange absence of emotional connection.
 
So as 2011 gets underway, the debate over monetising, and exploiting the rights, of such content in a Brave New World will only heat up, as will the question of whether book stores and online sales are mutually dependent…or not.   Are you an e-book convert?  Feedback most welcome.