The Egatz Epitaph

All things Egatz and other non sequiturs.

Admitting is the First Step to Recovery

The publishing world continues to be as shaken as the Pope on his recent trip to England. The difference between that situation and the publishing world is that in the United Kingdom, citizens are avoiding the pews, and they don’t look likely to return to their former numbers in our lifetimes.

With publishing, illicit sex is kept to a minimum in the workplace, and it’s among consenting adults. Unlike the Pope’s dwindling minions, people are fighting for a front row seat in the publishing industry. Everyone smells the opportunity to reach a wider and enthused reading audience at a cost lower than ever. The technology and rapid delivery of eBooks makes for a feast of both new readers, i.e., paying customers, and neglected authors who can be in or back in the hands of those readers.

Stephen Fry and his publishers have announced the simultaneous release of The Fry Chronicles as a dead tree edition, an eBook, and a touch app for iOS. Promising non-linear reading possibilities with this title, writing is now being executed with nontraditional reading in mind. It’s an exciting time for authors if you’re innovative and intelligent, and downright frightening if you entertain this is the way narrative might be moving for good. This is going to be better than the dot com boom of the 1990s, kids. Grab a dart, close your eyes and throw.

In the world of hardware, Amazon.com continues to snipe at the groundshaking advance of the Apple iPad. It seems Team Bezos in Washington have hired some marketers and consultants who get it, unlike what was happening a few months ago. In classic corporate sleight of hand, Amazon is at last trying to rely on the few strengths their one-trick eReader pony, the Kindle, has over the iPad: longer battery life and… well, longer battery life. The old advertising con of pointing out what really works for you while ignoring what you don’t have is nothing new, and I applaud their new marketing campaign. What we finally see is Amazon not only realizing but admitting their Kindle is in a different class than the iPad, which can do many things very well. As proof, herewith the following quote from the Great and Powerful Bezos himself: “The evidence is very clear Kindle is a companion to tablet computers.” Amen. Clouds have parted over Seattle, Washington. Perhaps now consumers will understand these devices are in completely different classes.

With the obvious finally out in the open, like a drunk admitting there’s a drinking problem, perhaps we will now see accurate marketing of the Kindle and the iPad as different devices in completely different leagues. The difference primarily lies in the fact that, for a few hundred dollars more, with the iPad, you get a fully functional computer with a gorgeous color display, touchscreen interface, and fully capable of doing everything the Kindle does, plus a whole lot more. As Best Buy CEO Brian Dunn recently pointed out, the iPad is cutting into 50% of the laptop market. Although Best Buy issued a retraction of this quote in order to stem the stampede away from the Windows clone aisle, the smart money knows the quote was both accurate and true, and Dunn had let something slip he shouldn’t have. This cannot be ignored, and Apple’s stock has jumped accordingly to an all-time high. You can bet distilleries around the country are filling orders and shipping cases of booze to the Dell corporate offices in Round Rock, Texas. Outside Michael Dell’s office, it probably looks like a scene from the film Downfall: some officers faithfully standing at the ready, awaiting the next set of misguided orders, and others with whores on their laps while they drain bottles of schnapps and making sure their Lugers have that one last bullet in the chamber.

Samsung has responded to the Apple steamroller by cranking out their own iPad clone ripoff, but they just don’t get it, as with all corporate attempts to follow in Apple’s footsteps. You can make it look like an iPad, you can have a touchscreen like an iPad, and you can offer software which does some of the same things, but you can’t build the OS experience which makes Apple products so intuitive. You especially can’t do the latter in the short five month period the iPad has been available. Good luck with that, Samsung.

Conversely, as pointed out previously in The Egatz Epitaph, Apple has remained woefully anemic in promoting the iPad as an eReader. In fact, it defies Apple’s usual practice of hyper attention to detail to make new owners have to download the iBooks app after purchase of the hardware. Their iBookstore currently has approximately 130,000 titles, versus 700,000 for Amazon’s Kindle, and about 1,000,000 available for the kludgey Barnes & Noble Nook. Recent reviews, such as the one on 15 September in The Wall Street Journal, all point to the fact iBooks is a hell of an app. Engineers and interface designers spared no expense or detail in trying to recreate the real book experience for their eReader. Pages curve when you turn them, and there is even the faint hint of type on the other side of the page showing. Is it even possible those who designed the Kindle and the Nook even thought of that? Of course not.

Unlike their one-trick pony competition, Apple’s iBooks app has their purchasing experience built into the app. It’s astounding that if all your device can do is either display books for reading or sell you books, you still need to bounce out of the reading application and into a Web browser to buy your next title. Where did you guys go to interface design school, and, more importantly, why didn’t you hire me as a consultant—or someone more intelligent than myself—to figure this out for you?

With Amazon distancing the Kindle from the iPad, they’ve made a positive step toward realigning consumer expectation. There is nothing dishonorable about having a product a few rungs down on the food chain, particularly if it does what it does very well. What is ridiculous—and will result in inevitable consumer backlash—is trying to play in the same sandbox with a motocross bike when your competition is driving an M1 Abrams tank. Market your eReader as an eReader, Amazon. People know it’s not an iPad.

Bezos and team should set their sights on eliminating the Nook, Borders’ Kobo, Spring Design’s Alex, Sony’s Reader and every other single-use eReader currently out there. Amazon can be the Kleenex of that market. Everyone needs a reliable tissue. I, and plenty of others would prefer to use something more substantial. Like a towel. With an Apple logo on it.

The inevitable struggle for eReader market dominance will not be a holy war such as the one Mac users suffered through in the 1990s. The difference between iPad versus Kindle and Macintosh versus Windows is the Mac and Windows largely did the same thing. Also, Windows was and remains in a perpetual game of catch-up to the Mac in terms of technology, quality, and experience. Although the Kindle beat Apple to market, Apple’s answer is simply better in every way except available titles, and that race isn’t over.

As stated earlier, the Kindle can do one thing, and the iPad can do almost everything. In fact, it’s an incredible eReader. The best one out there, in fact. Anyone know which one the Pope prefers?

Disappear Here

The deceptively small entrance to the beautiful and large Ruskin Arts Club, built in the Mission Revival bungalow style.

I’m in Los Angeles, and alone in this city for the first time in almost twenty years. I read at the beautiful Ruskin Arts Club for Red Hen Press to promote Beneath Stars Long Extinct.

The woman I love, my wife Jenn, is a Los Angeles native, and she’s not with me this time around. The last time I was in her hometown alone, I was a young unpublished writer working on my third book of poetry. It’s a good chance I was more crazy than I am now, which, after this summer, is pretty hard for me to imagine. That summer I was last in L.A. alone, we were trying to claw our way out of a recession, and I was hiding out in graduate school, learning about writing and literature. Actually, things don’t feel that different, but I digress. Again. I ended up driving through the bombed-out aftermath of Los Angeles Rebellion, a Thompson Guide on the passenger seat of a borrowed car, and I got a tattoo on La Brea.

I truly hated Los Angeles that year I was an young angry dope, and had for a long time before then. Uniformed and basing my opinions on third-hand information, I was not unlike some redneck talking about burning some other group’s literature without having read, understood it, and put it in a historical context. To me, with my classic New York centrism, the entire L.A. basin was a place that had lots of sunshine, amazing produce, and none of the culture I thrived on.

Fast forward about fifteen years. I fell in love with a Los Angeles native I met on a Caribbean beach. A few years later, I promised I would do everything in my power to make her happy for the rest of our lives. Some days I can. Often I fail, but I’m too crazy to stop trying. I think she’s worth it.

On my flight to L.A., and had an iChat video chat with an old writer friend who admonished me for not yet reading the latest Bret Easton Ellis novel, Imperial Bedrooms. There I was, heading into the place Ellis had busted out of—via Bennington—in 1985 with Less Than Zero. Whether you’re friend or foe to that novel, it helped define a generation, and it impacted, directly or indirectly, most of us who were young writers when it was published. The scene with a billboard reading “Disappear Here,” pretty much summed up the tenor of the novel and other work Ellis has since published. Released on 15 June 2010, critics had the typical mixed bag of positive and negative reviews. Fans of Less Than Zero undoubtedly were thrilled at the notion of finding out what’s happened to those characters twenty-five years on. Talk is in the air of a film, but it will be hard for Hollywood to unscrew how badly it deviated from the original novel with the film they passed off under the name Less Than Zero.

When I arrived in Los Angeles this time, it was overcast and twisted. I visited a few places I cared about, wondering what the hell I was doing here without my native driver who knows the traffic patterns better than she knows herself; the woman I want to grow old with.

Sleep-deprived, I drove around Rosecrans and Aviation, looking for something to read in order to get my mind off my own poems for the next day’s reading, and some new poems I’ve been working on about the said woman I love. I kept thinking Imperial Bedrooms would do, based on my friend’s recommendation. When in Rome, right? I headed over the Manhattan Beach Barnes & Noble. I figured the Riggio family could use a little money, so I’d contribute to the cause to help out my old employer who was going down the tubes.

Being a poet, I first tried to find the poetry section. Typically relegated to the rear of a store between the civil servant guidebooks and the fanatical religious tracts, poetry doesn’t deserve much spotlight in the eyes of retailers because they don’t move many units. Can’t blame them for that. It’s the publishers and the educators who have done this to that form of art for the past hundred years, but that rant’s best left to another time.

The poetry section at this store was more dismal than usual. Many of the shelves throughout the store seemed understocked. Even the fiction section was jammed toward the rear, like a bad afterthought. A young surfer boy was behind the e-reader counter. He couldn’t fix an old man’s Nook. “Well, it’s got the bars, so that’s not bad,” I heard him say. The grandfatherly-type gentleman was at the end of his rope. I could practically hear him thinking, “I just want it to work.” Then he said, “I don’t understand why it just doesn’t work.” I wanted to whisper in his ear, “iPad,” but strangers whispering into the ears of old men are not appreciated, even in the most liberal enclaves of Los Angeles.

Does anyone else notice how bad the branding on the Nook is? The typemark is a lowercase sanserif “n,” which looks largely like a hump, speed bump, or a roadblock. Is that the positive image you want to get people to adopt new technology? Another blunder by Lenny Riggio and team. Keep trying guys. Maybe you’ll get it right before you’re out of jobs, but it doesn’t look promising.

If the Manhattan Beach Barnes & Noble didn’t have Imperial Bedrooms, I shouldn’t be surprised when it didn’t have other titles I was looking for which had been published before 15 June of this year. There was an earnest but sad magician doing card tricks at the front door while trying to plug his novel about a a magician. He asked a young boy to pick a card, and then he couldn’t identify the child’s card from the deck. Things would only get worse the longer I stayed. Time go to.

I got something to eat, and drove around the L.A. basin for awhile. The platinum sky eventually got darker, until it turned misty and somewhat frightening. At another point in my life, I’d call it romantic, but there was nothing romantic about this or my headspace. Going to places which remind me of the woman I love, I was wandering, lucky to have my rental car. With too much ingrained existential sadness, I realized why the homeless talk to themselves and unseen people.

Eventually I was in a parking lot of yet another string of retail operations. A Borders sat before me, the former pride of Ann Arbor. Inside, the selection was better than Barnes & Noble, the sections laid out a little more efficiently, and the whole thing just felt better than my book search earlier in the day. Their poetry section wasn’t as robust as it had been in the mid-nineties, when they offered a wide range of literary journals and many independent publishers.

Unlike B&N, it was easy to find a copy of Imperial Bedrooms. In fact, they had a lot of copies, and that got me depressed thinking Mr. Ellis was still carrying the millstone of too many bad reviews, but this is art, and art is subjective. Some people get the good stuff, some don’t. The Great Gatsby and Catcher in the Rye were ripped by contemporary critics of the day. Now those critics are mouldering in their boxes, reeking of cigarette smoke and formaldehyde no one will hopefully ever have to smell again. Although I only had one friend telling me to read Imperial Bedrooms, and the dim memories of some reviews I avoided back in June, I figured Mr. Ellis was worth my time and money again. I grabbed a first printing, and headed to the register.

I brought the book to the register. The cashier asked for twenty-eight dollars. “Wow,” I blurted involuntarily. “Are you kidding?” It wasn’t discounted, and California tax had almost taken me for close to $30. Instantly, I heard the old Woody Allen joke from Stardust Memories. “The worst thing you could ever do in my family was to pay retail,” his character says in that film. When you’re alone in Los Angeles, in need of a literature fix, and missing the woman you love, full retail price doesn’t seem so bad.

It might be mentioned here my small company once had a Borders corporate discount account, but it had “expired.” One day, the card stopped working, thanks to the geniuses at the home office in Ann Arbor. As a thanks for my loyalty, I was cut off. Suffering from a serious book habit, I went from spending at least three hundred bucks a month there for years to zero. In the way I stopped shopping at Barnes & Noble when they executed their Walmart strategy of hook and hike, I cut Borders out of my life. All retailers have a right to charge what they want, and customers have a right to shop wherever they want. That’s part of the fundamentals of capitalism. Ask Bennett S. LeBow, CEO of Borders. He’s a corporate raider, and has infinite more experience with different corporations than Lenny Riggio. He’s also an electrical engineer. I need some track lighting installed. Maybe he can help me out when I get back to New York.

Benny LeBow will be happy to know I did pay full price that night at Borders. With their Kobo e-reader down to $130 and struggling for market share, he needs all the help he can get. Here’s some other pricing facts.

  • Borders is also selling an unabridged audio version of Imperial Bedrooms for $25.00.
  • Audible.com is charging $18.90 for the same unabridged audio version.
  • The e-book version on Amazon is a hair under ten bucks.

Two out of three with a considerable savings over the full retail price for a first printing. Is there any wonder dead tree versions of books will be a thing of the past? Makes me wonder what authors will sign at readings aside from autograph books and copies of obscure literary journals their work has appeared in.

It’s time to leave Los Angeles, and I’m ready to go. The woman I love is waiting for me, and keeps me going with encouraging phone calls and text messages. She will be unconscious in our bed when I get there, and that will be fine. There are poems to write and our comfortable home to keep improving bit by tiny bit to make us both happier in it. The next time I’m in L.A., I hope it’s with her. Maybe then I won’t have that horrible feeling driving around the great basin, where all the towns look alike, street after street, the sunlight unforgiving. On this trip, if I had come across a billboard that read “Disappear Here,” it would have been perfectly okay if I could, right at that instant.

Goodbye, OED

Once, in 1994, I found myself in a car with some well-known literary intelligentsia traveling to a poetry conference. It was a seminar on a topic once considered very important. Like everything, what was once popular buzz eventually becomes trivia. This is something all artists should keep in mind, but I digress, as usual.

I was the only passenger in said car with my own Internet domain. Most people that year thought they were wired into the “Information Superhighway” if they had an AOL account. After all, it was all just one big series of tubes, right?

Somehow, between the mind-bending Gilbert and Sullivan tunes, talk turned to the Oxford English Dictionary. My traveling companions in the car were still reeling and heartbroken from just a few years earlier when the OED had been released on CD-ROM. Who, after all, didn’t want to have another 150 pounds of dead trees in their home?

I was a poor graduate student at the time, and couldn’t afford the CD-ROM version, let alone any version of this classic key to the English language. In those early days of Netscape Navigator, ridiculing comments were thrown toward the backseat when I suggested it was quicker—not necessarily better—to go to one of the nascent online dictionaries at the time. Nothing, after all, could compete with with the Oxford English Dictionary, I was admonished.

The intelligentsia fell victim to what often happens to engineers. They couldn’t imagine users might have different needs, uses and workarounds completely different from their own. They couldn’t fathom using “a lesser source” definition, or a less-vertical and probing analysis of words they had to look up. Why would anyone not want to know where the first documented use of a particular word in English was needed, nor the etymology of said word? Intelligentsia are like that, and they’re entitled to be. They’ve worked hard, foregone a lifetime of sitcoms, and run in the right circles which will get you into charity contributor circles at a discount.

My old traveling companions from that road trip have either embraced digital content or are about to have another serious slap of reality upside the head. With sales of the Oxford English Dictionary’s current edition sucking serious wind due to free Internet alternatives, publisher Oxford University Press has announced it’s game over for the 150-pound 20-volume dead tree edition. Countless forests and their inhabitants are breathing easier. Plenty of trees will die in the meantime, though. Although you can subscribe to the Web-based version of the OED for a fee, it looks like the next edition won’t be out for another ten years.

The Telegraph published an excellent article on the state of the OED, and quotes author Simon Winchester as saying, “Until six months ago I was clinging to the idea printed books would likely last forever. Since the arrival of the iPad I am now wholly convinced otherwise. The printed book is about to vanish at extraordinary speed. I have two complete OEDs, but never consult them—I use the online OED five or six times daily. The same with many of my reference books—and soon with most. Books are about to vanish; reading is about to expand as a pastime; these are inescapable realities.”

There’s little doubt Samuel Johnson’s project is the definitive authority on the English language. What my old companions could not see in the mid-1990s was Americans will always choose convenience over quality, as I love to frequently quote my friend David Biedny. If the opposite was true, we’d all be using OS X instead of the cheap and syphilitic abomination that is Windows, and Betamax would’ve never been usurped by VHS technology. The list goes on and on.

It’s almost predictable the bible of the English language has never turned a profit, according to its publishers. There’s just not enough intelligentsia around willing to buy the Oxford English Dictionary, either online, CD-ROM, or the soon-to-be-obsolete dead tree edition. Time will tell what Apple will eventually charge for the iBookstore edition. Until then, I’ll figure something out, as many other writers seem to have.

More Falling Prices and No e-Publishing in Decatur

As the summer draws to a close, we see Amazon.com dropping prices of Kindle e-readers faster than wet bikinis in a Minnesota February. In its Microsoft-like frenzy for market domination, we’ve seen Team Bezos do everything from sell e-books at loss to multiple revisions of their kludgey hardware.

Now, following the Kindle’s move into Target stores, Amazon has partnered with Staples to sell their hardware to people buying book bags, Number Two pencils, and the chiropractor’s ultimate wet dream: the sub-$100 Staples office chair. If anyone remembers shopping at a Staples for printers and computers, they’ll quickly ascertain where this venture is going to go. Consumers might buy the Kindle at Staples if:

  1. The Kindle is priced cheaper there than anywhere else.
  2. Consumers already know they want a Kindle and why.

Hoping to get knowledgable assistance on digital device purchases at Staples is like hoping for accuracy at a British Petroleum press briefing. It brings back memories of overhearing a Sears saleswoman trying to sell a Macintosh a few decades ago. “It comes with four em-bees,” she said. “What’s an em-bee?” asked the customer. “I don’t know, but it says it here.”

After the smallest Kindle hit the $140 pricepoint, Borders followed suit with dropping the Kobo e-reader to $130. The bottom of the barrel Aluratek Libre was dropped to a buck shy of the magic $100 barrier. Cover your head and watch for further falling prices as more people see through the reality distortion field on one trick pony black and white e-readers.

Media giant Sony is still scrambling to be a relevant player in the e-book business with their new Sony Readers. Betting their farm they know more than the Great and Powerful Bezos, Sony is gambling

  1. Consumers want touchscreen technology. (Good)
  2. Consumers will pay more than they would for the Kindle. (Bad)
  3. Consumers don’t care about wireless technology in their e-reader. (Split decision, at best)
  4. Consumers know plastic feels cheap, so Sony has moved to aluminum. (Good)

The new $180 Sony Reader Pocket Edition has just a five-inch display and a USB cable to suck books off your computer. The $230 Sony Reader Touch Edition weighs in with a six-inch display and a USB cable. Both these models have no wireless connectivity. Rounding out Sony’s offerings is the Sony Reader Daily Edition with a seven-inch display, 3G and Wi-Fi for a whopping $300, but isn’t shipping until November. We expected considerably more from the company which changed the world by introducing the Walkman, but then again, they also introduced the MiniDisc and watched the iPod make them largely irrelevant.

Queue for Beneath Stars Long Extinct signing, Decatur Book Festival 2010.

I’m writing this from the Decatur Book Festival, where thousands of readers are navigating gauntlets of dead tree books, handmade soap vendors, and special interest group tents. I’ve seen a only single digits of depressive writers slouching up against walls and staring blankly into their e-readers. Oddly enough, the discussions on the future of publishing here have almost completely ignored e-book technology. Aside from a few informal talks among old colleagues, e-books are off the radar here. There wasn’t one official seminar or event devoted to how all these readers and writers are going to be consuming and publishing books in the future. At least there wasn’t one e-publishing event I could find, but it’s been a few days of being directed to the wrong location by well-meaning volunteers, and I’m not the only one sent marching in the wrong direction in this hamlet.

I find the lack of e-publishing seminars astonishing, and the Decatur Book Festival isn’t alone. The technology is here, now, and available to a confused public. Writers are even more in the dark about what the shift away from physical books means to them and their livelihood. This would’ve been the perfect venue to begin an informative dialog. It’s as if we’re a nation of zombies who get in their car every morning, start it up, and not even think about the consequences to both ourselves and future generations.

Wait. We already do that. What the hell was I expecting?

How much you wanna make a bet things will be different at next year’s Decatur Book Festival? As a publisher, author, and reader, I look forward to being part of the panel discussion.

Publishing’s New Accounting

Publishers I’ve spoken to are wary of many aspects of their business model in light of the transition the industry is undergoing. As dead tree books are replaced by their digital equivalents, a very practical question arises. As one old friend who wishes to remain nameless confided, “how do I know if Amazon or Apple sells 1000 or 10,000 copies of one of our titles? 100,000?”

With physical books, it’s fairly easy to get an accurate quote of the numbers retailers are moving because publishers control what is being shipped. Thanks to the Great Depression, they even know what is being sold, and often, how quickly. In the First Great Depression, independent retail bookstores—then the only kind of retail bookseller—were offered new books by publishers with the guarantee they could return whatever didn’t sell. Thanks to this practice, retailers had less risk, and thus could keep their doors open when Americans had trouble feeding themselves, let alone buy books.

In Manhattan, we often see sidewalk hustlers with card tables offering the latest bestsellers at drastically-reduced rates. These are new, first editions, and where they come from is the subject of another story at another time. What is not so amorphous is the fact that any retail industry will suffer from what managers have for decades euphemistically dubbed “shrinkage.” What they actually mean is theft: stolen merchandise, plain and simple.

One huge loss sector is the retail book industry’s own workforce. Consider the disgruntled minimum wage employee working for a big chain bookstore. It’s fairly easy for them to forget to ring up a few books when their friends come to the register with a large stack of titles. This drives fraud prevention specialists crazy. Everyone knows it’s been happening for decades, and, like the never-ending War on Drugs, War on Poverty, War on Illiteracy, etc., it has no effective solution palatable to either the consumer or the employee at this time.

The leading e-book sellers are in a unique position. Since the major publishers were unable or unwilling to create a technological infrastructure to sell e-books, they have no choice but to get in bed with Amazon and Apple, to name the top two. Like all publishers, they will need to carefully review data they’re given by those sellers, and hope they’re not getting skimmed off the top, like the way many other industries function as a matter of course. This will, inevitably, open the doors for accounting firms, forensic accountants, IT specialists, and, but of course, an endless parade of lawyers to strategically place their upturned hats into the ring.

Where does this leave authors of e-books? As usual, on the short end of the stick. Without authors, publishers have no product, yet authors are the ones with the most to lose, the ones with the most ways to be violated by a long line of business interests since they reside on the bottom of the publishing food chain. Publishers not only take their due before anything trickles down to authors, but now there will be a larger and more nebulous set of accounting rules and practices put in place before publishers’ numbers, in turn, can be trusted. In short, it’s not a great time to be an author unless you’re one of the highest-paid authors able to command obscene advances even your own books might not make back.

To be sure, there will be spreadsheets, presentations, and statistics galore to back up claims of fair and accurate reporting of each e-book transaction. In the end, though, the only thing authors will be able to take to the bank is what they are given by their publishers.

We live in strange times, and they continue to get stranger. Joan Littlefield has recently offered for sale the unwashed toilet formerly belonging to J.D. Salinger. She’s hoping to get one million dollars for it. Salinger, disgusted by publishing practices by the early sixties, famously retreated to Cornish, New Hampshire to write without worrying about money. Nice for him. Old J.D. also abhorred the idea of Hollywood and/or Broadway getting their hands on his work. It makes one wonder his thoughts on the inevitable demise of the printed book. Since we can’t ask him even if he was speaking to journalists, all we can do is wait for his survivors to begin the garage sale of his manuscripts to publishers, and the rights to Hollywood and Broadway, much in the way of how we saw the Kerouac Estate do when Stella Kerouac died. No doubt, the will of one man, the sole creator and owner, has zero rights after he’s dead. If you think otherwise, behold the ongoing lessons of what’s happening to the Barnes Foundation after the death of Albert C. Barnes.

With Apple posing the largest threat to e-publishing frontrunner Amazon (who currently sells e-book titles below cost in hopes of becoming the Microsoft of e-books) and their Kindle—possibly the most poorly named product since Whack Off! Insect Repellent or AYDS Appetite Suppressant Candy—it looks like there’s troubled accounting already. In June, Apple claimed it had 22 percent of the e-book market. Author Joe Konrath offers a different reality. HarperCollins is claiming they’re selling more e-books than dead tree titles. Amazon, a publicly traded company, is strangely and notoriously tight-lipped about sales of both the Kindle and e-books. When you have a product delivering reading material with a name that instills images of Nazi book burnings, you probably have a lot you need to keep on the d-low.

What the publishing industry is now facing is more of the same. Not only are they attempting to get Americans to actually read again, but they’re trying to sell them an expensive piece of technological hardware before they buy their first title. As always, there’s little writers can do, except keep cranking out their work and hope they’re not going to get shafted even further by a few more layers of creative accounting before that thin royalty check, if any, shows up in their mailbox.

A Retail Race to the Bottom

It’s an interesting time for the publishing world, to say the least. Those with e-book aspirations—authors, publishers, and e-book sellers (Amazon, Apple, et al.)—continue to jockey for front row seats to watch the continued implosion of retail giant Barnes & Noble. Posting a fiscal first-quarter loss, the vultures continue to circle the B&N carcass. Some, like investor Ronald Burkle, are already on the ground, and eating the cadaver from the inside out in hopes of wresting control from the bewildered Riggio brothers, Lenny and Steve. Others, like Amazon and Borders are moving forward with their own somewhat misguided plans as they wait to see what a Riggio-less Barnes & Noble will be like. Can new owners embrace emerging technologies and business models, or will the shakeout end with Barnes & Noble becoming as relevant as the vinyl retail business? The smart money is staying in other pockets.

On Tuesday the news for Barnes & Noble investors was not good. The quarterly loss was steeper than expected, and the proxy battle between the Riggio regime and Burkle is costing significantly. Stock hit perilously close to the $13 per share mark. It’s hard to know if Burkle is rubbing his hands together in glee or strategically placing his mouth beneath an open sangria spigot. Still, the stock is trading better than their previous 52-week low of less than $12 per share. As the eighties taught us, even the rotting carcass of a behemoth is worth something. The trick, as always, is to pay less than what you can carve up the pieces for.

Running a brick and mortar store is expensive. There’s the nasty issue of employing humans. Humans who actually know something about books is another issue altogether, and the problem of ever-increasing rent is a different nightmare altogether.

Let’s take the former, for instance. As Circuit City learned, the lower you pay your employees, the lower the quality of those employees. That formula equals a consumer retail experience lacking, at best, and your customers will go elsewhere. For those of you who missed it, Circuit City imploded into bankruptcy when upper management got a unique idea to reduce costs in effort to continue quarter on top of quarter profits. In the worst economic crisis since the Great Depression, this is an impossibility, of course. You don’t need an MBA to assume durable goods such as larger flat panel television purchases are going to be put on hold when one or both parents are out of work.

The geniuses at Circuit City figured out a way to trim costs, though. They fired retail staff who had been loyal employees for years. Longtime workers who earned a few bucks per hour more than minimum wage and had acquired a deep understanding of products, installations, and technology they were charged with selling were given the axe. What upper management and consultants didn’t grok was the simple fact customers relied on knowledgeable floor staff to get reliable information. Sometimes “out with the old and in with the new” is a good strategy, but not regarding salespersons who know what they’re doing.

Deceased founders Samuel S. Wurtzel and Abraham L. Hecht rotated in their graves as the minimum wage brigade replaced staff who were valuable to the buying public. In-store product knowledge went out the window. Customers voted with their feet once they realized they could get more information about products via the Internet. Hello, Amazon! In January, 2009, the last 30,000 staff were let go, thus killing a company started in 1932, in the heart of the Great Depression. Better or worse?

As we see malls closing around the country and big box chains being made irrelevant by the power of consumer reviews on the Internet, the writing is on the wall in flashing neon. For the quarter ending 31 July, Barnes & Noble posted a loss of $62.5 million, or $1.12 a share. Advice to the Riggio family: start moving cash into off-shore accounts. Advice to Barnes & Noble staff: bust out those dusty resumes and start getting more creative than your soon-to-be former employer. As a lover of books, I can only hope I’m wrong, but I’m not betting that way.

Old Media Versus the Environment

Recently, a saner mind than mine convinced me to clear out a rented storage space full of many things I’ll never use. As a writer, I went through a period of amassing articles, newspapers and magazines containing things which might eventually find their way into a short story, novel, poem, or article I would write one day. Pretty soon, my place was looking like the Collyer brothers brownstone. Women fled, screaming. Potential girlfriends were lost. Okay, maybe it wasn’t that bad, but I lived, worked, and ran a few businesses out of a one-bedroom rent-stabilized apartment for longer than I care to remember. The brilliant poet Dean Parkin dubbed it “the mancave.”

Among the things I discovered in the back of the storage unit were ten crates filled with VHS tapes. I had already thrown out several garbage bags full of videotapes when I recently moved. Now, like a fruitcake which keeps coming back to you every Christmas, I’ve got videotapes of films I’ve long since replaced by DVDs. It makes weaker humans nauseous to throw away thousands of dollars of old media, but it shouldn’t. We do it every time we step into a car, wear down all the parts we rarely think of, and then wonder why we’re lucky to get pennies on the dollar when we get trade it in or try to sell it.

From my window I watched sanitation workers get hernias carting off my old media, I found myself reflecting on the nature of good old American consumerism. How do entire industries effectively get individuals to purchase the same content multiple ways? Simple. Keep changing the format and hype each iteration as “new and improved.”

My father has been a music lover his entire life. During his long attraction to recorded music, he’s bought the same music on 78 rpm discs, 45 rpm singles, 33 1/3 rpm “long playing” albums, reel-to-reel tape, cassettes, compact discs, and repackaged box sets. He was smart enough to pass on the 8-track format, the Mini Disc, and has yet to purchase anything on the iTunes Music Store. Recently, he let more than 3000 albums go to some fast-talking swindler for a song, and there’s not much mirth in that fact to say whether the pun was intended or not.

My father isn’t alone. The recording industry is essentially able to print money by selling consumers the same tunes decade after decade. Digital technology means they have to hire new engineers to clean up old master tapes, but the ever-smaller digital formats mean they don’t have to pay designers, photographers, and artists for new work. Box sets are the lone exception, of course, but even then, what you essentially get is all the old material you own on one or more formats, plus a few B-sides or rare live tracks. As the major labels continue to implode, most consumers are not shedding tears.

The computer industry has worked similarly for decades. Software programmers and hardware manufacturers have colluded since the dawn of the personal home computer to leapfrog each other with larger software applications which require more powerful hardware to run them. Faster hardware with larger memory enable software designers to keep adding new features, bloating simple applications almost beyond recognition. When consumers realized all they needed was a minimal system to run a Web browser, basic email, and, perhaps, word processing, Apple came to the rescue and created technologies to move your record collection, your boxes of family photos, and yes, even your movies to your Mac. Turn up the need for more clock cycles, boys!

Which brings us to books. As if the Great and Powerful Jeff Bezos himself has been reading The Egatz Epitaph, his team at Amazon.com can’t seem to lower the price of the Kindle fast enough in order to more accurately reflect its capabilities in the blazing headlights of the Apple iPad. With the Kindle heading for below the psychological barrier price point of $100, does this mean the end of the book as we know it? Probably not any time soon. Unlike recorded music, written materials, including books, have been around for a relatively healthy portion of human civilization. Books in homes and offices have acted as testament to the intelligence and accomplishment of owners around the world. People have coveted books to such a degree book wallpaper has been available for over a hundred years. It’s hard to convey that kind of fine breeding with a plastic Kindle weighing a few ounces no matter how quickly technology marches on.

Things are changing. Every once in a while you read about someone shaking things up, like creating a feature film which debuts as a digital download, or an old author skipping a print edition in favor of an e-book release. This type of thing will only become more common. Still, some readers (and writers) point out serious flaws with both the current e-book publishing model and the hardware it’s delivered on.

I happen to own a lot of books. I can’t imagine living without them. I couldn’t afford to replace them all in e-book editions. Most of them aren’t available in e-pub format, either. Many of them are out of print. These shortcomings will hopefully be ironed out in the coming years, but I’m not interested in repurchasing a library I’ve been building since I was a child. I’ve done that a few times with the music and films I love, and I’m not about to do it all over again with books.

No stranger to the bleeding edge of technology, I’m not about to shun ebook readers, either. As an author, publisher, and reader, I’m not blind to the fact this is the way most of us will eventually be reading books. Dead tree editions will be a niche product for the wealthy, similar to the way Amazon wants to sell me a $500 edition of Exile on Main Street. The health of the planet dictates this. Forests are not being replanted fast enough, and you only get to destroy a primeval rainforest once. I just feel bad about what readers of the future are going to do when the big EMP goes off. They’ll probably sit around campfires roasting small mammals impaled on pieces of twisted rebar while they tell stories. Thus may begin the rebirth of the rhyming narrative poem.

With dead tree editions of books, there’s a lot less to worry about. Fire, followed by flood, are just about the only thing worth being concerned about. Loaning them to so-called friends is the other problem, but we’ll save that for another post. There’s something tactile and lifestyle-like about being able to walk over to my bookcase and pull out something to confirm a fact, as opposed to typing a phrase into Google. I put a little Django Reinhardt on the Victrola, sit in the sun, and sip something while turning page after page of dead trees. It’s distraction-free. It’s a nice thing. Come on over and try it some time. You can even bring your ebook reader. I might even make a latte for you, which you can enjoy as you dig through piles of VHS tapes to see what you want to bring home. I’m trying to keep some of this stuff out of the landfill. It seems the right thing to do.

The Rise and Fall of the Book Superstore

There is timing in the whole life of the warrior, in his thriving and declining, in his harmony and discord. Similarly, there is timing in the Way of the merchant, in the rise and fall of capital. All things entail rising and falling timing. You must be able to discern this.
—Miyamoto Musashi

Miyamoto Musashi showing how it's done.

Depending which source you believe, Miyamoto Musashi was born in 1584, and was an ass-kicker of the highest order. Author of The Book of Five Rings, a martial arts textbook I still enjoy reading now and then, although I don’t swing a sword much these days, Musashi’s writing can be applied to much of our daily life today. Like Sun Tzu’s The Art of War, frustrated nonmilitary veteran corporate swine have co-opted this book and applied it to their business practices. This, of course, leads us to the business of books, which is more or less what this blog is about. Nice segue, Egatz.

Perhaps my old comrade Len Riggio would do well to track down The Book of Five Rings. Although Riggio has come a long way from his Bronx beginnings 69 years ago, times have changed, and Riggio has failed more times than not to discern this.

When I was a child, once a year my parents would make a pilgrimage to the Barnes & Noble flagship store at 18th Street and Fifth Avenue in New York City, their book-loving son in tow. This was at time when there was one bookstore in the next suburban New Jersey town; a small, cramped mom and pop affair on the first floor of a former residential home, full of charm and personal service, short on selection. As my friend David Biedny is fond of saying, as with almost everything in America since 1950, we’ve chosen convenience over quality.

In terms of convenience (read: selection), here are few words other than “magic” to describe being let loose in that Barnes & Noble. There was simply nothing else on that scale in terms of the book retail business. It was worth it to brave the insanity of Manhattan back then, with the junkies, pimps, muggers and panhandlers working their trades open and unpunished in the streets during daylight hours, often within shouting distance of disinterested police officers. My father used to put a twenty dollar bill inside his sock for emergency funds to get his family home if we were mugged. Ah, the seventies. How I don’t miss you.

Although I’m sure my childhood memories are tainted, the Barnes & Noble store seemed endless. There was a turnstile and an escalator. Multiple floors! Damn. All I previously knew were small indie bookshops and a few larger, non-anchor store chain locations in ugly malls. A trip to New York City for Barnes & Noble was special and slightly dangerous. If you survived the trip without becoming a crime victim, your wallet certainly didn’t survive.

If you couldn’t get enough of your book-fix on the West side of Broadway, you could always cross Fifth Avenue and go to the Barnes & Noble Annex, which was less polished, and where a warehouse of remainders awaited bargain hunters. Barnes & Noble was something from another world for bibliophiles.

Originally started as a printer in Wheaton, Illinois one-hundred years before my parents dragged their precocious, fucked-up only child to the book temple in Manhattan, Barnes & Noble had morphed into something her founders would not recognize. Much of the transformation was in thanks to Lenny Riggio, who parlayed his college experience of founding the Student Book Exchange at NYU in 1965 into an impressive career. Gobbling up the almost century-old Barnes & Noble in 1971, he proceeded to build it into the largest book seller in the world, largely on the concept of the superstore. The sheer scale of the Fifth Avenue retail location was refined and reproduced around the country, giving shoppers a place to get coffee and sit in a decent chair with their potential purchases.

I worked far down the Barnes & Noble food chain while I was a graduate student in the early nineties. The second year of my Master’s I shelved books at a local superstore. I quit when I found out a co-worker who couldn’t spell “Faulkner” was making a dollar more per hour than I was. Working retail is seldom fair, but then, like now, I lived for literature, and I couldn’t abide the favoritism. I wrote a letter to Lenny. I’m still waiting for a reply.

In the late eighties, Barnes & Noble opened a second and third superstore in my county. You could easily drive to all three in under twenty minutes. Like other superstores in other industries, Riggio commanded his minions to follow the Walmart strategy: move into a new location, offer tremendous discounts to attract and keep new customers, then, give them the knife. I clearly remember the standard operating procedure was thirty, then twenty-percent discounts off the cover price of both hardcover, trade paperback and paperback books. I’m talking the entire store; not just bestsellers. As the independent competition was driven out of business, sure as the sun would rise, so did the prices of the previously-discounted stock at my local superstores. I voted with my dollars at this betrayal by patronizing Borders, who offered a corporate discount. Apparently, it would take years before enough of my fellow customers did the same.

Two of those superstores remain, but they’re clearly at risk. All things involve rising and falling timing, as Musashi wrote. Riggio was on the money with his purloined Walmart strategy until the early nineties. That’s about twenty years of an extremely impressive run, but when they write the Riggio biography, the second half of his professional career will be the other side—the downslope—of that meteoric rise.

Like many other corporate businessmen, Lenny missed the Internet. It blew past his consciousness like an SR-71 overhead, taking reconnaissance photos while Riggio and crew continued to build their big box stores far below. When it was too late, Jeff Bezos and some upstarts in Washington had built and deployed a Web site where you could get virtually any book in the world, and at a discount, tax-free, and often with free shipping. Take that, brick and mortar dinosaur! By the time Barnes & Noble caught up with deploying their own Web solution, the public knew Amazon.com was the brand to trust for online book sales and a whole lot more. The greatest innovation Barnes & Noble delivered during this period was same day delivery of books to your door if you lived in Manhattan.

As Barnes & Noble continued to grow to their current size of over 700 retail outlets, including their crafty assimilation and expansion of college bookstores, they made another critical error judging the timing of harmony and discord. If you missed the information superhighway as it was laid in your neighborhood, it’s no surprise you missed the rush into the e-book market. That’s what Riggio did, and for all the hundreds of millions of dollars he and his brother Steve have made at the helm of Barnes & Noble, you’d have thought they might have hired some senior management with a little more foresight and/or technical savvy. This was clearly not the case.

The Barnes & Noble Nook followed Amazon.com’s Kindle by two years. Two years too late, and when it did appear, the Nook was slow, and the software team clearly was not staffed with anyone who had previously worked at Apple. Riggio had missed his chance to own the electronic book publishing market, and he missed it by years.

This past Tuesday, shareholders disgusted with falling stock prices and missed opportunities forced Barnes & Noble to put itself up for sale. The market cap on Barnes & Noble has fallen to under $950 million from a high of $2.2 billion. Amazon’s market capitalization stands at $57.46 billion. If Barnes and Noble was a private company, there might be hopes for a substantial turnaround. Under Wall Street’s watchful eye demanding greater and greater quarterly returns, this is impossible. Shareholders have no patience, and they will not support a retailer as it tries to reinvent itself by playing catch-up to Amazon.com, or figure out how to make an e-book reader which has an additional 200,000 apps and growing daily, like the Apple iPad.

This is not the least of the Riggio brothers’ worries. Ronald Wayne Burkle has gobbled up 19% of stock in Barnes & Noble, and Aletheia Research and Management, Inc. owns about 16%. That kind of simple math is enough to keep Len Riggio awake for many nights in a row. With stock heading for below the ten dollar mark, it looks like Burkle and Aletheia will continue their feeding frenzy, and Riggio is facing a serious challenge to his position on the board.

Although Riggio’s public face is one of optimism to keep the brand he revitalized one hundred years after it’s birth alive, this much is certain: “There is timing in the Way of the merchant, in the rise and fall of capital. All things entail rising and falling timing.” Unfortunately for the Riggio family, Lenny, Steve and those they hired were unable to discern this. It’s nothing but a matter of time before the book superstore will be thought of with nostalgia, exactly the way I think of that little suburban mom and pop bookshop on the first floor of an old residential home.

Reality Marches On

©2010 Amazon.com

Amazon’s latest push into the e-reader market are two new versions of Kindle. As with previous versions, the PR muscle is hard behind these models, set to ship 27 August. Priced a dollar short of $140 and $190, it seems Amazon is competing with Apple’s iPad in the only space they can: price. These models are smaller and lighter than previous Kindles, but still only do one thing, and they do it in black and white.

I received a huge amount of reader mail over my announcement I’d consider purchasing a Kindle for fifty dollars or less. Some readers saw the logic. Others ranted about free market pricing. Some said the Kindle should be given away, like the old razor blade practice: make the money on the software—the content. Others said they’d avoid the whole issue by continuing to purchase dead tree editions of books.

For those vitriolic responses citing free market economics, you’ve answered the question yourselves. Amazon is faced with iPad, which Apple’s suppliers can’t make fast enough to meet demand. Priced significantly higher than Kindle, the iPad can do a whole lot more, and with the App Store, there’s virtually no end to what developers can make it do in the future. Amazon has responded in turn, first by buying a touchscreen technology company, but before that acquisition can bear fruit, the best Bezos and crew can do is lower the price of what they’ve got. People are voting with their dollars.

To the readers who said the Kindle should be given away, or, more accurately, sold below manufacturing cost, I have mixed feelings. Microsoft built an empire based on giving away product to dominate market share. Their lack of innovation despite millions upon millions of dollars in research and development each year has been astonishing. Will Amazon fall into the same trap with Kindle? On the surface, things aren’t promising. They have no track record of creating and delivering products people want. They’re essentially a database company with a massive shipping component.

Amazon’s history and business model aside, the fact is they’re already undercutting Apple’s e-book sales by selling e-books at a loss in order to gain market share. This has publishers livid, but as long as they’re getting paid what they negotiated, they don’t have much to say about it. Will they continue this race to the bottom by taking a massive loss on hardware, too? It doesn’t seem unlikely. For many years after they first started selling books, Amazon rode the .com bubble by operating at a loss in order to become the Walmart of online selling. Many on Wall Street decried this business practice as unsustainable. Fortunately for Amazon, with well-planned growth into non-book products, they survived.

In the simplest of terms, e-books are here to stay. The planet is changing, and the publishing world must follow suit. Something with no less authority than the planet Earth is making it happen. Yesterday, even The Wall Street Journal has reported on The State of the Climate in 2009 report by the National Oceanic and Atmospheric Administration. The short story, kids, is something has inexorably been set in motion. You can blame your parents and grandparents for this one, and every day we do nothing about it, well, you can blame yourself for that, too.

Here’s the short version, and climate change deniers can stop reading now. The oceans are warming. Good for humans frolicking on beaches, bad for our long term survival. As the seawater temperature increases, phytoplankton, a drifting plant so small it can’t be seen with the naked eye, dies. Unfortunately, phytoplankton is a lynchpin in the food chain. The health of the oceans and marine life depend on it, and we’re running out. In fact, NOAA reports we’ve lost about one percent of phytoplankton each year for the past forty years, at least. That’s right. We’re down 40%. This means less food for marine life to eat, which means less fish for humans to eat, on top of massive deregulation of the fishing industry since the early eighties.

What the hell does tiny phytoplankton have to do with e-books? Trees reduce they temperature of the planet. It’s probably to late to see a reversal any time soon in the warming trends our ancestors have set in place for us, but that’s no reason to not try. If you’re not interested in planting a tree, maybe it’s time to start buying your books as e-books. Amazon.com’s selling them cheap.

iPad Über Alles, Despite Apple and AT&T

Today’s lesson is, if you ever perversely doubted it, not all top management is infallible.

In a bizarre four-way race with British Petroleum, AT&T and Sarah Palin to see who can deny reality the longest, Apple made my prediction come true regarding the giving away of free “bumpers” for the iPhone 4 in order to stem the inevitable waves of class action lawsuits. With one-armed research chimpanzees able to reproduce the now-infamous Apple “death grip,” and an initial wave of a lame and misguided PR effort to deflect bad hardware design as a software bug,

Originally sent out via Twitter on 24 June, I wrote “Who wants to bet Apple’s $30 bumpers are going to be given away for free?” It’s the fastest and cheapest way for the Great and Powerful Jobs to avoid a mandatory hardware recall by giving away a $30 product that had a $28.50 profit. Still, Apple’s magic is holding. On Tuesday, 20 July, Apple destroyed Wall Street expectations with a 77 percent profit growth on the backs of 3.47 million Macs, 3.27 million iPads, and 8.4 million iPhones sold. Despite the most glaring PR misstep since Apple’s old 90-day warranty in the pre-Internet days, Jobs has heard and listened, despite the public face-saving denials.

The Street and the hands of most users are not the only places Apple’s usually-stellar engineering has won friends. Jakob Nielsen and team have released a report showing Apple’s iPad trounces Amazon’s Kindle in users’ reading speeds. I’ve made it no secret I wouldn’t pay more than fifty bucks for the Kindle, a one-trick black and white pony with a lot of bad plastic buttons and an interface that appears it was designed by Microsoft on a good day. Looks like usability and interface expert Jakob feels the same way.

Jeff Bezos and team at Amazon recently announced they’re selling more e-books than hardcover copies of similar titles. This claim is dubious, but for the sake of trees and the air we breathe, I hope it may be true. The reasons for this announcement are suspicious, at best. First, the iPad is eating their lunch. The numbers are not lying.

Second, rumors abound Apple will quickly capitalize on the runaway success of the iPad with new 5.6- and 7-inch models in time for the Christmas shopping frenzy. If you doubt this, study your history of what Apple did with iPod technology, which wasn’t initially anywhere near as wildly successful as the iPad: exploit the brand over a range of price points. Can you say “paperback iPad?” Of course it won’t be made of paper, but Cupertino could swing a similar form factor without reinventing the wheel. I wonder how much sleep Jony Ives is getting these days.

Third, Amazon notoriously was silent on numbers of Kindles sold until the iPad exploded. Numbers were revealed in ballpark terms (don’t these guys have databases tracking their products? You’d think they would, selling stuff over the Internet) only as a defense against the giant on the southern horizon was undeniable.

Fourth, the Kindle prices continue to drop. The new and improved model, the Kindle DX is down to $380. That’s still hundreds too much to pay for a device that essentially does one thing in black and white (okay, a few shades of gray), compared to a fully functional computer called the iPad, which starts at $500.

Fifth, Amazon sells stuff. They’re e-commerce and database experts, not designers. This is pretty clear from using a Kindle itself, particularly their first offering. Have you ever just held one in your hand? The subliminal message I get is “cheap.” That’s how it feels, and Apple knows feeling is everything. Despite Amazon quickly buying up touchscreen technology upon the announcement of the iPad, don’t expect to see anything as slick and integrated as Apple hardware and software coming from Amazon any time soon. Apple’s got decades of lead time on Amazon, despite how quickly Bezos and the boys may be buying up disparate technologies and selling books at a loss to gain marketshare.

Some top management continues to fail. Some top management makes missteps. Meanwhile, publishers who failed to learn the lessons of the music industry continue to watch largely from the sidelines while hoping they choose right. I do, too.