Big Changes in Small Bookstore Business, Part Two

This interview is a continuation of a series with North Baltimore independent book store owners. The first in the series can . Today's inteview is with Benn Ray, co-owner of Atomic Books.

How long has Atomic Books been in business? How long have you been its owner?

Atomic has been in business for 19 years. I’ve co-owned Atomic Books with my partner, Rachel Whang, for almost 11 years. 

How would you describe the changes over the last 20 years in the booksellers’ market? How has your own business evolved?

The bookstore biz has been constantly evolving (or devolving depending on how you look at it) for decades. Atomic has always existed by supporting subcultures and niches that the other bookstores wouldn’t touch. Fortunately for us, they happen to be the sorts of things we like and are interested in. However, with the rise of the Barnes & Noble superstores and big box discount stores (which undervalue books), the Internet, where Amazon aggressively prices books to compete with everyone, and publishers now selling books direct to consumers – it really seems like the room small, independent, weirdo bookstores used to exist in is shrinking at a rapid rate. But this is also like most areas of retail – record stores, DVD stores, video game stores, etc.

Do you see any difference between the strategies employed by the independent stores that have gone out of business and those by the stores that have survived? 

While I’m sure bad strategies may have resulted in some bookstores going out of business, what I see as the main cause for most bookstores is either bad luck -- maybe 10 years ago Barnes & Noble realized your store represented a market they could exploit so they opened a store within a mile of you, or maybe two (that’s just bad luck) -- or a lack of flexibility. Perhaps as a store, you invested too heavily in a CD and DVD department, which have worse margins than books, which have terrible margins to begin with, and when the formats died because of streaming or easily downloadable content, you didn’t have funds to adapt. Or some combination of the two.

The economic crisis over the past few years has hurt bookstores and publishers alike, as it did so many people and businesses. Sudden and unwarranted drops in lines of credit, skyrocketing interest rate increases because you pay your bills on time, etc. I’m sure a number of stores got caught up in that too.

What further changes do you anticipate?

The publishing industry seems quite determined to rapidly recreate the disasters of the music industry. In the next year or two, I’m afraid we’ll see fewer books being published; we’ll see fewer real-life places to browse and buy books, which means there will be fewer books published, which means there will be fewer places to browse and buy books. Basically, it will create this diminishing loop. I imagine the book industry will end up looking a lot like the music industry.

In what ways do you think e-books will have an impact? What place might they have in independent stores? 

I go back and forth on what I think about e-books. I think they certainly serve a purpose – if the book itself is not important to you, and you only see it as a content delivery device, and when you’re done with that $7.99 mass market paperback you got at the grocery store and don’t want to keep it but feel too guilty recycling it – well, the e-book could make sense as long as you have the gateway price (the cost of the device) and regular Internet access to get more books. But for people who love books, it shouldn’t make much of a difference because a digital file is not a book; it is not physical thing. But sadly, I think the majority of readers are the mass market paperback readers and really, e-books complicate the experience of reading unnecessarily so. Largely, this just cuts booksellers out of the loop.

See, books are easy. You get a book, you open it and you read it. That’s it. E-readers need to be charged, connected to the Internet to get new items, downloaded, opened, etc. It’s not that big of a deal for most people, but from a product point of view – it complicates the experience and provides little reward for doing so except the novelty of having it all on one device. There is also no secondary market value for e-books, so you can’t resell it to a used bookstore if you don’t want to keep it. There is only delete or not delete.

As for the role of e-books in independent bookstores, I’m still exploring this option. I have customers with e-readers who say they would like to be able to buy e-books from us. But that is an emotional response (an admirable one), a desire to support your local bookstore... While they like to believe they support their local bookstores because that makes them feel good, they are still consumers. They will go where they are used to going, where things are easiest and where things are the cheapest. So I think the reality of it is most of the folks saying they want to buy e-books through us will still buy their e-books through Amazon, iTunes, Google or directly from the publisher. So I’m not sure if it’s worth the time and cost.

But at the same time, if this is the direction the industry is going in, do independent bookstores have any choice?

And in fact, some of the stuff that we carry in the store – that exist as e-content – there isn’t actually any distribution for it. Most of the comics, from what I can tell, are sold directly from publishers like DC, Marvel and Dark Horse and maybe through iTunes. But I see no way for me to get this specific kind of content and sell it to my customers. I even brought this up with Diamond Comics (the largest distributor of comics) and outlined what I thought was a pretty good plan for them, and sadly, they seemed ill-prepared and somewhat shut out by publishers on distributing e-format comics. So in that regard, I’m being forced out of a market by large powerful forces who have no interest whatsoever in my carrying or selling their titles.

Do the changes undergone in the market reflect in any way changes in readers and readership?

I think the industry is working very hard to change the way readers read. What I mean is this. Look at the amount of e-reader advertisements you see on television. Based on the advertising, you’d think that everybody reads all the time. But the reality of it is that not that many people actually read. And the number regularly decreases. So if that is the case, why are so many companies spending so much money advertising their devices so heavily? Well, obviously companies are vying to be the dominant device, which will most likely be established by the 2011 holiday shopping season. But the other thing is they have to change the way people read. These ads are also designed to change behavior – to make it look fun, modern, sexy, and easy to buy one of these devices to then buy e-books, e-magazines and e-newspapers on. Because really, it’s easier to just buy a book. So the e-device commercials – the successful ones anyway – need to serve two purposes: (1) to make their device seem better than all other devices, and (2) to make reading on their device seem like the best way to read.

As for the publishers themselves – well, businesses go where they see growth. So they see book sales continually shrinking and they see a small blip of growth initially in e-format books. But this growth isn’t sustainable and eventually the market will saturate. Regardless of the dollar amounts, they start focusing on growth. At this point, publishers seem to support and be more interested in e-books than real books because it’s economic growth. It doesn’t matter that the growth isn’t sustainable – it’ll peak at some point. Right now, just like movie companies who sold VHS format then DVD format and are trying to resell again on Blu-Ray, publishing companies are seeing growth in eBook sales as consumers get e-devices and start loading up on content. And in some cases, readers are just buying the same content in a different format.

Also, look at the publishers who are selling e-books direct to consumers. If they do sell them at cheaper prices than real books (and not all do this), the percentage difference for e-books is not the equivalent of the percentages of the cover price that distributors or bookstores get. So publishers have a vested interest (if you are shortsighted and look only at quarterly profits reports) in not only cutting real bookstores out of the market but the eBook sellers too.

Remember how when CDs came out, prices of CDs were supposed to drop dramatically because they were so cheap to make but they never did? The same thing will happen with e-books. They are cheaper to make, and far cheaper to distribute and sell, but these savings will not be passed on to consumers in any substantial way.

Any thoughts on the so-called "death" of the printed book?

The book will not die. It may not be a cheap, easy to buy item anymore, it may become a fetishized object and not a populist one, but it won’t die.

When making comparisons to the record industry, we can see that over the years, there’s been a demise of the 78, the 45, the 33 1/3, the 8-track, the reel-to-reel, the audio cassette and now the CD (with 45s, 33 1/3s and cassettes still existing in fringe markets), in movies we’ve seen the demise of the super-8, the Laserdisc, the VHS, the Beta, and now the DVD. However, books have been books for centuries. What I mean is a book is not a content delivery device. A CD is. Music has never been married to a format, a book is inherently tied to its format. And you don’t need additional technology to enjoy a book, but you do it to enjoy consumed music and movies. And this change from books to e-books has come about backwards – with the format creating the demand for the devices. A book is a superior format than a digital file. So there will always be people who want books. The question is, though, will publishers be too busy focused on growth areas to pay attention to that market? And will there be enough people who love books left to actually warrant the publication of as many books?

The big brick and mortar chains, i.e., Barnes & Noble, have themselves been struggling greatly in recent years because of competition with online retail. What do you make of this? Do you think that a diminished presence of the corporate chains would be of general benefit?

Unfortunately, after seeing what happened to the sorts of publications we carry when Tower Records went under, or when the [distributor] Desert Moon closed up… well, I’ve seen first-hand what can happen when integral portions of the market collapse. And Barnes & Noble and Borders – are generally perceived as too big to fail. If either went down -- and sadly, it looks like Borders, the better of the two chains, may not make it through 2011, but it’s looked like that for the last couple years, so who knows, they may still hold on -- they’d go down owing publishers/[distributors] money. That means some publishers and [distributors] will close down. That means fewer books published, which means fewer things for bookstores to sell.

So while I have no love of Barnes & Noble or Borders (although I have friends who work at both stores and actually have a pretty good business relationship with one of the two Barnes & Noble stores in my neighborhood), and feel a certain amount of schadenfreude at watching their struggles (how many bookstores did those chains kill?), I am certainly not rooting against them because, at this point, rooting against them is rooting against myself.

Have you found that the rise of online retail to be a good thing for independently owned stores? 

Well, Atomic has always existed by online retail. We were selling online several years before Amazon ever went online. However, online makes everything feel like everything will always be accessible always, all the time, even when it’s not. So when you see an awesome book you’ve been looking for – you can put off getting it because you can always get it online. For a curated store like mine, where we carry a lot of limited editions, that frequently confuses and frustrates people.

Plus, Amazon aggressively dominates online book sales for new, in-print books. I’ve found the online time we actually sell traditional books online is when Amazon is out of them.

How do you conceive of locally owned bookstores’ present relationship to its surrounding community? Is their importance different now than it has been in the past?

I still very much believe in the local bookstore as a community hub. We have community activist meetings in our store, a number of clubs. We host an increasing number of events. When people come to town, they frequently ask us on recommendations on where to go, where to eat, etc. And we pride ourselves on keeping up with local goings-on so if anyone has questions, we can answer them.

One unexpected side-effect of the internet however, and it’s one just about every bookstore has experienced and hates and finds extremely rude and rarely ever publicly voices distaste over because – well, I guess there is this weird notion that bookstores aren’t just businesses but are sort of like libraries too -- is that we are increasingly being used as what I like to call “Amazon Showrooms”. You’ll see people come in the store, look at books and pull out iPhones and order them from Amazon.

I’ve actually had a customer call and ask me for the correct spelling of a name of an author and the correct title of a book they were looking for. When I asked her if she’d like me to hold a copy for her, she said, 'No thanks. I’m going to order it from Amazon.' Sadly, I think that says everything that needs to be said about bookselling today, and what it will be like in the future. 

Atomic Books is located at 3620 Falls Rd. Baltimore, MD 21211