Yen and I just read this article in Business Spectator, about the future of the publishing industry.  It has some interesting information about the way the current revenue is structured in publishing, and the kinds of risk which publishers are exposed to with the existing retail model.  At the moment, retailers get about half of proceeds, but get to send books back to publishers if they don’t sell.  So publishers are in the risk-bearers seats when it comes to investing in books.

The author of the article, Josh Dowse, eventually makes the point that, like the music sector, the book industry will need to integrate vertically.  So a retail presence will ultimately just be a shopfront for online or e-book sales, with display copies rather than loads of unsellable print stock in the back room.

I reckon that this is the start of a fair point.  At the moment, Amazon gets away with not investing in these sorts of shopfronts because I can go into Gleebooks, for example, work out what books are good, and then go buy them online from the Kindle store.  The online Kindle and Amazon stores are pretty rubbish when it comes to helping you find books you might like.  They have not had to shape up their game because they have such a major price advantage, and because shops like Gleebooks are still fulfilling this role for them.  Amazon has its rusty old recommendation engine, but it doesn’t have links to opinion leaders I trust, or lists of recent Orange Book Prize winners (for example) – another way that readers work out if they want to take a punt on a book.

But this doesn’t necessarily mean that Amazon will need to suddenly open retail shopfronts full of display books once regular bookstores start closing.  And it won’t necessarily save bookstores from closing, as many of these display and taste-setting functions can actually be fulfilled online.

So who will fulfil the functions of current bookstores, outside of the actual sale of books?  And what will happen to bookstores – will there be many, any or none at all?  To answer this, we have to understand the functions of bookstores, beyond just selling books: taste setting, try-before-you-buy, selling books as objects and bookstores as cool places.  Then we can start to see how these roles will be fulfilled, and by whom.

Taste setting:

As bookstores close, the online booksellers will probably have to ramp up their rather hopeless taste-setting functions, as noted above.  But there is also a role for existing, trusted independent booksellers to fulfil this role online.

For example: I trust certain independent booksellers because I share their preferences.  I like their staff picks, and I like that when I walk into their stores, I am probably going to see a book or three that I would like to read.  The bookstores I am talking about are stores like Brunswick St Bookshop or Gleebooks, or perhaps Ariel or Berkelouw bookstores.  Some of these stores already allow you to buy books online from them – but not e-books (as far as I can tell – I might be wrong though!)

If I were running one of those stores, I would think about selling my lease.  I would start building or changing my website to get ready for e-books, and cash in on my role as a trusted brand and taste-leader.  I would say to my web consultant: please set me up a website that does not look like Amazon, but looks more like the personal blog of a trusted writer and, more importantly, reader.  Set something up that lets me expound my (and my other trusted staff/friends) opinions about what to read at the moment, right across the categories of books I am knowledgeable about.  Make the front page of my website show featured books, top picks, and recommendations in response to frequently made requests.  Let people respond to my posts and ask me for recommendations.

And then, rather than try to get people to buy the books from me online, when probably what people will do is say, thank you for the recommendation, and now I will go to Booktopia or the Book Depository or Amazon/Kindle or iTunes, and buy that for half what you are selling it for: I would provide links directly to any or all of those websites.

I would say to these websites: look at the kind of taste leader I am.  Give me some money.  If they were not interested, I would go ahead and set up my website, and then use as proof the volume of my clickthrough traffic to their sites.

And if that didn’t work, and other methods of monetising my site didn’t work (eg advertising from publishers), I would shrink my store to a small size, and focus my business operations on books as objects or my bookstore as a cool place to be (see below).

Try-before-you-buy:

Bookstores also allow you to try before you buy.  But this function will be easily replaced by online bookstores.  Kindle allows you to download a sample section of a book to peruse.  And the price of online or e-books is so good as to make the risk much easier to take.  And as bookstores close, the online functions will probably become more sophisticated, as they will for taste-setting.

The only possible issue may be around trying books as objects (see below) – eg what will this pop-up book about dinosaurs really be like?  But this could partly be addressed by providing a simple video example of a child opening the book, and a mag app style of representation, where you can flick through an online catalogue or “book.”

Books as objects:

This is where bookstores may continue to have a role as physical shopfronts, and books a physical, print existence in the future.  Beautiful art books, graphic novels, children’s books, collectibles and illustrated books are the only types of books people will want to physically buy in the future.  Because these types of books are physical experiences, they are also the type of books people will want to handle, feel, smell and admire before they actually purchase.  And so they are the type of books where bookstores have an edge over online stores.

This may also be eroded if the book can be viewed in a bookstore and then bought online later.  In which case, it will be in the bookstore’s interests to focus on handcrafted books; limited runs; local artists; rare and collectibles – basically, a sense that this is the time and place to purchase this book.  Bookstores may also, in part, need to accept that they may start trends, and cash in at the outset, but not finish them.  To compensate, bookstores may want to branch out to include other unique objects – including other, carefully chosen objets’d’art in their retail offering.  If they went this route, they would need to scrupulously avoid becoming a generic gift store – this would destroy their core remaining asset – their trusted taste and curatorship.

Berkelouw’s has the edge on rare collectibles already, and Ariel and Kinokuniya on large art, design and foreign language (Kinok.) books.  There may be more of a market for illustrated books as objects than publishers currently realise, as these books become the only ones that are actually printed and purchased.

I know I am biased here, as I am trying to publish my illustrated Mr Middleton’s Teleporter. But honestly, I can’t understand why publishers haven’t twigged – people already buy books because they are pretty; unique; they say something about who they are as gift givers; and statements about their personal taste  and identity.  As books go electr(on)ic, books as objects will have some big shoes to fill in people’s personal space as indicators of how very cool/chic/geeky/smart/interesting/whimsical they are.

And also, more to the point – books are lovely objects.  And the lovelier they are as objects, the more attractive they will be to buyers.

Bookstores as cool places:

Bookstores – the nice, independent ones with cluttered shelves and comfy seats, the ones that remind me of coming home and being safe amongst all that sound absorbent, stilling paper – are cool places to hang out.  They are little oases on busy roads, and the best ones are the ones that are open late, unexpectedly surprising you with the chance to wander in after a show or a dinner with friends and reclaim some part of your less social self on your way back to being alone and OK with that.  They are even better again when you can buy a cuppa and a muffin, or a glass of red wine, and be surrounded by words.  They say: it’s snug in here.  Don’t hurry away.  The music will always be something you don’t mind, and the people will be the unobtrusive, real type.

So bookstores as cafe/bar/hang outs will, I hope, continue to have a role.  But their core business will be in selling coffee, not books (except maybe books as objects, or books on a whim, books as nostalgia, and maybe books as gifts).  The books’ real role here is atmosphere, giving urban passersby a feeling of homecoming, a rare sense of belonging in a place which can be sometimes forgetful of who you are.  Without the books, there would be no reason to stay.