July 20, 2011
Are Bookstores and Electricity Generation on a Similar Trajectory?
I happen to think so, but with news that Borders is almost certainly closing its doors, one has to wonder what the future holds for physical bookstores. When I was young, most of the books stores were independents, with some kind of sad stores at shopping malls. Then the shopping mall stores consolidated, got big, and put a lot of the independent books stores out of business.
When I was in Ann Arbor in the late 1980s, Borders was a big, awesome, independent bookstore. I thought it was great. And a few independent books store remain -- the best one I have visited in the last few years is Powell's City of Books. There is something great about wandering the stacks of books and pulling things off the shelf for a look. The same is true for libraries, but the option of buying that great find, right then and there, is something unique.
Perhaps the failure of some of the large chains will create new opportunities for smaller, independent, local stores to regain strength. The assumption that larger scale is inherently good is not necessarily true. This shift is happening in some areas of the electricity generation sector, too. We have been following the Thomas Edison/Samuel Insull model of large central stations for years, with the assumption that bigger is better. And sometimes it is, but not always.
There is some interesting work in the area of microgrids that could help increase reliability while reducing the land used for electricity generation. (If you're interested in such things, I recommend Sara Bronin's article, Curbing Energy Sprawl with Microgrids.) This doesn't mean there won't be large generating facilities, but there will less, and we should not assume bigger is better.
Hopefully, this is a market correction in both areas, and part of a cycle that is responding to other external changes (such as internet booksellers on the books side and better technologies and increased sensitivity to environmental concerns on the electricity side). I'd hate to think it's just that we don't like books that much any more.
The physical book store business is a dying business model. Barnes & Nobles is sitting on a load of liabilties in the form of real estate leases. Yet, 70% of B&N revenues derive from electronic sales of its NOOK product which is the E-Reader that competes with Amazons Kindle or online purchase of books on the Internet.
Text books are the niche in the book store business model that seems most resistant to the electronic era. But even that will change as future law school students should be able to download casebooks and statutes on their smart phones soon enough.
The costs of law school text books will hopefully go down further as distribution over these electronic devices will make distribution easier. Another death knell for even the niche text book stores.
Posted by: Legal Advice | Jul 20, 2011 2:49:56 PM