Daily Archives: February 7, 2011

The Good, the Bad, & the-oh-so-ugly

The Good — the New York Times reports e-book sales in the Young Adult market are increasing.  Specifically, e-books made up 25% of all YA sales in January for Harper-Collins.  this is up 6% over this time a year ago.  The article also notes that YA e-books made up approximately 6% of total digital sales for St. Martin’s Press in 2010.  So far this year, they account for 20%.  Mind you, the year is young so there’s no guarantee this trend will continue.  However, I expect it will.  Perhaps not with such a huge increase, but with an increase nonetheless.  Our teens and young adults are more tech savvy than most of their parents.  They have smart phones and iPods and tablets.  It is only natural that they read via the same hardware they use for their music and games.  Besides, anything that encourages them to read is good in my book.

The Bad (maybe, kind of, sort of) — A Literary Glass Ceiling? That’s the question posed by The New Republic.  It’s an interesting article with its roots in the kerfluffle started this past summer when Jodi Picoult and others accused the NYTBR of being sexist when it came to who and what it reviewed.  The numbers presented are staggering, until you look — as the author did — at the underlying numbers for books likely to be reviewed that were written by men v. those written by women.  It won’t silence the accusations, but it does shed light on the reality of the situation.  Now, what would be interesting would be to see the numbers of submissions to the publishers the author spoke to v. the acceptances and then to see how that breaks down by sex.  Not only by the sex of the author but by the sex of the editor purchasing the book.   Of course, I don’t think we’ll ever see those numbers.

The also bad — The Washington Post has an article that puts forth the premise that it costs basically the same thing to create a best selling e-book as it does the hard cover version.  There’s a nice break down of costs near the end of the article.  The problem I have with it is the generality of the entries.  Overhead cost.  What are they including in this catch-all section?  More to the point, are any of these costs also costs applied to hard covers — at the same time?  In other words, how much double-dipping is being done, and at the author’s expense.  Look, I’m not exactly saying these numbers are wrong.  In fact, under the current business plan of most traditional publishers, they are possibly correct.  However, it’s my opinion that the traditional business plan — and the expenses inherent with it — is completely wrong for the e-book business and, as I’ve said before, it is time for these traditional publishers to be dragged into the 21st century.

And the oh-so-ugly — Well, what else but Borders.  Again.  First, Borders has been notified by the NYSE that it has six months to pull its daily stock price average to above a dollar or its listing will be dropped.  When this news hit the streets, stock prices fell 2% to 39 cents a share.  In the last year, stock prices have fallen 67%.  What is interesting, and more than a little disconcerting, is the statement from a spokeswoman for Borders saying the company has not yet implemented plans to return to compliance with the NYSE regulations.  This is a company that has — or at least should have — seen the writing on the wall more than a year ago.  A company that only now seems to realize just how dire the situation is.  I simply have to ask how long before it either voluntarily files for bankruptcy or is forced to in order to try to stay afloat.

To put the Borders picture into perspective, at the end of January, corporate value was estimated at $29 million.  That’s down from $663 million two years ago.  The number of employees at its headquarters in Ann Arbor has been cut from 1,200 to less than half that number over the same two year period.

Add to that the fact that some industry insiders are predicting Borders will have to close 150 stores — or more — to meet just one of the requirements of GE Capital for the loan needed to stay afloat a bit longer.  According to the above article, all of Borders’ stores are currently locked into leases.  The average length of time left on these leases is 8.1 years.

“A full 369 stores are in leases that won’t expire until 2017 or later.  And the dollar obligation of the leases for the company is staggering: $562 million last year, or 19 times the $28 million value of its stock as of last week.”

So, if Borders files for bankruptcy or, worse, goes under, not only are its own employees and shareholders left out in the cold, so are the landlords, lenders and others associated with the leased properties.  Where was the oversight, the checks and balances needed years ago when the trouble should have been spotted.

I’m keeping my fingers crossed Borders manages to pull out of this debacle without taking any part of the publishing industry or anyone else down with it.  I’m just not very hopeful at this point.

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