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RE: What’s wrong with Borders

The article explains thusly :

Like Blockbuster, Borders (BGP, news, msgs) is getting hit by technological changes that leave it dazed and confused. First came the Internet, which brought the competitive pricing of Amazon. Lately, price competition has gotten even worse, with Wal-Mart slashing prices on best-sellers and Amazon matching the cuts.

Now Amazon’s e-book reader, the Kindle, is gaining in popularity. With the Kindle, readers just download books, which are sold at lower prices. Next, readers will be using computers and computer notebooks to do the same. All of this eviscerates the need for a brick-and-mortar bookstore such as Borders, with the high costs associated with stores and inventory, Stevens says.

Borders has dealt with these challenges by aggressively cutting costs. But it’s running out of room for that tactic, says Credit Suisse analyst Gary Balter.

This means that, for Borders, the final page is being written.

Borders responds that bookstores will continue to coexist with digital book formats and online vendors because people who love books will continue to seek “community,” or a place where “they can be surrounded by the books they love, meet others who share their passion for books and engage in the sheer joy and indulgence of spending hours exploring.”

Yep, Amazon is giving away a Kindle ap for computers...so even if you haven’t bought a Kindle, you can take advantage of the lower prices for Kindle ebooks and read them on your computer.

I love going to Borders once in awhile, but in truth, I buy most of my books and my music downloads from Amazon.

This is the business model that began when music moved from vinyl to CD. At first, CD's were everywhere until the technology change put CD burners in every home. Now, the content providers don't have to have the manufacturing and distribution costs associated with pressing CD's and selling them in stores. They have outsourced the manufacturing of CD's to the home consumer.

It was only a matter of time before books followed the same model. Let the consumer access the content and distribute it themselves via a portable e-Readers. Now the publishers don't have to acquire paper stock, maintain printing presses, and add distribution costs.

The question is, how much will the content costs drop now that the publishing costs are pushed down to the consumer?

-PJ

I see, the ‘Little Shop Around the Corner’ logic. That might work if Borders actually were a specialty bookseller, providing unusual books at a reasonable (if still rather high) price. They aren’t. They’re just trying to sell expensively what Amazon can provide cheaply. Think Amazon=Fox Books.