Barnes and Nobles’ latest public spat with Simon and Schuster – another nail in the Publishing industry?

Barnes and Nobles’ latest public spat with Simon and Schuster – another nail in the Publishing industry?






January 8, 2019

As predicted in my book 5-STAR Business Networks when a product category, its current form, reaches the end of its life-cycle, the supply chain interaction between the supply chain partners becomes rather unpleasant and coercive.

The reason is clear enough.

Long standing supply chain relationships are tested as a result of falling profitability. Each of the player starts challenging the value added by other players, and in a bid to maintain profitability, or avoid losses, starts asking for more share of the overall profits in the supply chain.

Nowhere is this phenomenon more observable today than in the retail supply chain.

Within retail too – book retail is perhaps the most hit industry.

Amazon has been eating the lunch of traditional retailers for several years now.

Onslaught of digital delivery mechanisms and growing popularity of digital readers, iPads, kindles is taking its toll. New York Times reported the dispute as follows:

B&N “believes that because its physical display space is so important to publishers, and because it is the last major retail chain remaining, publishers should be doing more to support it.”

And now this report from the Wall Street Journal of 22nd March 2013 says:

Barnes & Noble Inc. BKS -2.67% has sharply reduced the number of Simon & Schuster titles it carries in its stores as well as the promotion it gives those books as a result of a financial dispute between the two companies, say people familiar with the matter.

This is probably only the first chapter in this dispute. Both sides are hurting from their struggle with a redundant business model. Neither side managed to create a new business model to replace their redundant business model, when the time was on their side. Wall Street Journals goes on to say –

The dispute was reported by Publishers Weekly in late January, shortly after Barnes & Noble curtailed its Simon & Schuster orders. At that time, the two companies believed they would soon resolve their differences. Instead, the dispute has continued.
The disagreement comes as readers increasingly embrace e-books. At Simon & Schuster, for example, digital-book sales grew 24% in the fourth quarter, even as total publishing revenue fell 6%. Digital books represented 24% of total publishing revenue that quarter, up from 18% a year earlier.

But these two companies are not the only causalities of this dispute.

The reading public, as well as the writing authors are also affected; perhaps it is time for the authors to create their own business model by finding other, more direct, ways of reaching their readership!

This will not be the first time when non-value adding players are disintermediated out of a supply chain.

In fact Guy Kawasaki, a noted venture capitalist and entrepreneur has recently released his new book which encourages writers to do just that, and shows them how to do it. As per the book’s website Guy learned from his experience.

In 2011 the publisher of Guy Kawasaki’s New York Times bestseller, Enchantmenst, could not fill an order for 500 ebook copies of the book. Because of this experience, Guy self-published his next book, What the Plus!

No wonder then that Simon &Schuster CEO Carolyn Reidy told the New York Times, “In this new world, it is just getting more complicated. There are more factors involved. They get more fraught.” Wonder how many people will miss the publishing industry in its current form?

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  • I’m struggling in the publication business, I’m finding the way to move on by it. After reading the above words about it, I think you might provide reasonable advice or a way to overcome my issues. Thanks

  • Yes, of course, it proved to be a nail in the publishing industry. The conflict, which was being closely watched by other publishers, underscored the pressure on the publishing industry and Barnes & Noble as they tried to compete with online retailers like Amazon. This was the first time that Barnes & Noble used the sales of books as a negotiating tool. Amazon, which is known as an aggressive negotiator, removed online buy buttons from books during negotiations.

  • I remember the time the issue was raised. Industry executives, as well as authors of the publisher Simon & Schuster books and their agents, were of the view that Barnes & Noble reduced book orders greatly, to almost nothing in the case of some lesser-known writers. They contend that the move was damaging their sales. Authors said the retail chain took other steps, like not giving them display space or allowing book tour appearances in its stores.

  • Probably it seems to be a nail in the publishing industry. As a standoff over financial terms has prompted the bookstore chain Barnes & Noble to cut back substantially on the number of titles it orders from the publishing house Simon & Schuster, has risen fears among other publishers, agents and authors that the conflict may harm the publishing industry as a whole.

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