Computer Book Market Surges (Way to Go, Barnes & Noble!)
As many of you know, we track the progress of the computer book market via a weekly feed from Nielsen Bookscan, which sends out to publishers point-of-sale data on the top 10,000 computer books (yes, there are that many, and more!).
Recently, we began cheering when we saw the chart below, which shows the computer book market breaking out of a 40-plus week slump, in which every week's sales were below the corresponding week for the previous year. All of a sudden, in mid-July, sales began to surge ahead of last year:
(The red bars show the comparison to the same week in the previous year. The blue line shows the accumulated comparison to the previous 52-week period as a moving average.)
Not only has the book market been ahead of last year, it's been breaking out of the consistent pattern it's been in since we started tracking the numbers and heading back up into territory not seen since 2003:
What was causing the surge, though? We couldn't figure it out. There were a number of new bestsellers, including our own iPhone: The Missing Manual, Beautiful Code, Programming Collective Intelligence, and Head First SQL, but new titles weren't enough to account for the change. When we looked at our treemap visualization to see what areas might be driving the market, we saw a sea of green. The market was up across the board:
Then we got this report from Mike Leonard, our retail sales manager:
The August Computer Section sale at Barnes & Noble, as far as O’Reilly and client publishers are concerned, was a success. Total additional sales... [showed] approximately ... a 20% increase over the previous period.This is the first time B&N has ever done a category wide promotion, and the hope was that it would ... get the category close to being back on track for budgeted sales.... If other publishers had similar results ... this should take some of the pressure off the category, and ensure regular frontlist and backlist budgets for the rest of the year.
As Mike hints at in his report, slow sales at bookstores can have a cascading effect (just as we're seeing now with hedge funds as a result of the subprime mortgage meltdown.) A bookstore is always balancing its stock for maximum sales. If a category isn't pulling its weight, the amount of shelf space allocated to it may be reduced. This of course leads to still slower sales, as there is less stock on hand to draw customers into the stores and away from online retailers.
If you wonder whether it matters to publishers whether books appear in stores given that they can be ordered online, try breathing through a straw. You can get all the air you want if you lie low, but you'd better not try any strenuous activity. Retail distribution is like the alveoli in our lungs -- it increases the surface area for respiration, except in this case, rather than oxygen binding to hemoglobin, it's customers binding to possible products to purchase. People go to Amazon and other online retailers with specific purchases in mind. Despite all Amazon's brilliant work on collaborative filtering and recommendations, a computer screen just doesn't match up to a physical bookstore when it comes to browsing and the chance discoveries that spark an unplanned purchase.
At any rate, I wanted to give a big shout out to Barnes & Noble for taking the bull by the horns and committing to promoting the category with their big sale. This is a bit like Jimmy Stewart's character, George Bailey, stopping the run on the bank in It's a Wonderful Life. And, as in that movie, the benefits accrue not just to the company that gets things moving in the right direction, but to the entire community. You see, we can tell from the Bookscan numbers (versus our knowledge of Barnes & Noble's share of those numbers) that the overall market went up by more than just B&N's increase. So B&N's investment in marketing the category helped everyone, not just B&N and participating publishers. (Participating publishers provided half of the discount offered to customers, with the other half coming out of B&N's pocket.)
This is a good time to remind people of an article I wrote back in 2003 entitled Buy Where You Shop:
If you like shopping in bookstores, remember this: many independent booksellers are on the ropes. (One store owner we know resorts to ordering books on personal credit cards when she is put on credit hold by publishers because she can't pay her bills.) Even in the chains, computer book sections are in danger of shrinking in favor of other sections where sales are more robust. If you value the bookstore experience, my advice is this: buy where you shop. I buy lots of books online. I read about them on a blog or a mailing list, and buy with one click. But when I shop for books in bookstores, I buy them there, and so should you. Don't just look for the best price. Look for the best value. And if that value, for you, includes the ability to page through a book, support your local bookseller.
Physical bookstores play an important role in the publishing ecosystem. Smaller sales will eventually mean not just fewer computer books on the shelves of bookstores, but fewer books published. For now, though, Barnes & Noble just averted the run on the bank, and I for one, am all for giving them a big vote of thanks, and that includes "voting with my wallet."
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Comments: 7
[09.09.07 12:15 PM]
B&N needs to drop prices more often and be more competitive if they want people to buy books there. I buy books at B&N - but mainly impulse buys, not tech. books where I'm looking for a specific title.
[09.09.07 10:22 PM]
The Gap Between Natural Intelligence and Artificial Intelligence
There is far way to go for the gap between Natural Intelligence and Artificial Intelligence filled, or close to be filled, trust me or not
1. Where is the natural intelligence coming from? What is the essence of intelligence?
2. What is the key difference between life and matter? What consciousness? Shall modern Artificial Intelligence be built upon life, or matter, or both?
3. Natural intelligence can be either very rational or very passionate, how shall robotics model passion, or spontaneousity?
4. Incremental Learning is one of major characteristics of natural intelligence, how shall robotics model Incremental Learning?
5. How will robots evolve from individual-based, to team-based, to community-based, and to society-based ? Will a Third Life like Second Life appear in the future?
6. Business-wise if robots start to replace us both at work and at office, how will it impact our traditional business model since the inception of market economy?
7. How shall we deal the situation when the Artificial Intelligence of robots to surpass natural intelligence of human being? How to address robot security?
[09.10.07 09:35 AM]
Can you plot this trend line against, say, the SOX index of semiconductor stocks?
http://stockcharts.com/h-sc/ui?s=$SOX&p=W&yr=1&mn=0&dy=0&id=p36959672742
There seems to be a pattern. I'm curious as to whether computer book purchases can serve as a sentiment indicator for the tech sector or vice-versa.
[09.10.07 09:55 AM]
Tim,
While I'd take issue with a four-year old assessment of independent bookstores, especially in Northern California, I'd really like to point out that, in this day and age, one probably can't have it both ways. If one wants bricks and mortar stores to survive and help showcase books, one can't buy "lots of books" online.
Bookstores can't compete with a business model that sells books at a loss, and they can't provide the range of titles you'd prefer if they don't get the lion's share of your business. If folks want to shop online for "lots" of their books, they should do so knowing the consequences to local bookstores.
The number of books being sold over the past decade or so has not increased significantly, but the number of outlets selling books has increased dramatically. And, it may well be that bookstores aren't the best venue for certain types of books -- so be it.
But if people want to live in neighborhhods and communities where a diverse and local retail environment is an important component, they may need to adjust their shopping patterns. Buying lots of stuff at Home Depot or Starbuck's or Amazon could cost them their neighborhood. In many communities, the closing of an independent bookstore or local hardware store can have a ripple effect on an entire street.
Value isn't just about price, as you note. And it isn't just about the health of an individual store. Consumers wield a great deal of power with their shopping dollars and can have enormous impact on a retail community. If they are making informed decisions, then they truly will get what they pay for.
[09.11.07 02:09 PM]
One of the most ominous interpretations here is the possibility that the upturn in book sales is actually a canary in the coal mine for the overall economy. Books always sell well in bad economic times and publishers have long explained the phenomenon by pointing to the fact that when people are concerned about their jobs or future, they buy books to educate themselves and hopefully make themselves more attractive to employers. So what might be good for a publisher isn't necessarily good for the economy.
By the way, I used to be one of those indie brick and mortars. (Svoboda's Books, Tim, if you keep records from over a decade ago.) Back in the 90s I survived the initial onslaught of B&N partly by carrying almost the complete O'Reilly list before B&N had ever even heard of them. While B&N buying our university's bookstore and then also opening a big box at the mall in our little town sure put a dent in our bottom line, it was Amazon's aggressive discounting that finally closed us. Unfortunately that means the folks in a 100 mile radius of our town now have only two options for their books, B&N or Amazon. So if a new and innovative publisher like O'Reilly were to start up today, indies with a better sense of their local market aren't around to help spring board them into success as we did for O'Reilly and Associates back in the 90s. That seems the unfortunate result of both a local (B&N) and global (Amazon) book retail monopoly.
[09.12.07 07:58 AM]
It's important that to remember that libraries carry the physical book too. Many people sample a book in the library then buy it for themselves or for a friend or relative. I don't like to buy a book blind without reading parts of it but bookstores offer only a small sample of the world's reading. The sample at a library is often larger, especially of older books - yes, dead people wrote stuff still worth reading!
So don't forget libraries when you are praising books, whether in hard copy or e-books.
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Search ☸Engines ☸Web [09.09.07 07:46 AM]
What is especially interesting about that graph is the priority of business apps and digital media apps shown by consumers.
But, there is one puzzling element to all this - what profiles do these increased consumer numbers fall under. Are they newbies - people who normally do not focus on computer books - but decided to add them to their purchases after getting what they originally came in for?
If that is the case - this business model might work with virtually any general appeal topic matter.
Also could this be related to Students preparing to enter or return to college - another peak seemed to occur about one year ago - according to the graph.
This would make sense as to why Barnes and Nobles chose to push computer related materials at the time they did.
Did they push another theme after the END of the school year that was more geared towards Summer reading?
Amazon does use an upsell model but it offers related prospects based on the types of purchases a consumer has recently made - it would be interesting to see which business model is overall more effective in terms of getting additional purchases.