So, how will booksellers such as Barnes & Noble (NYSE: BKS), Borders Group (NYSE: BGP), and Amazon (NASDAQ: AMZN) fare during the holiday season? It's an interesting question, one which is examined in an article at The New York Times. The piece talks about how the current recession seems to be affecting consumers and their desire to buy books. At the beginning of the article, two shoppers are browsing in a bookstore -- one buys, the other doesn't. Both have been affected by the bad economy. What are we to make of this?
I'll give you my take on things. Books, unfortunately, are simply not so glamorous these days. And I do think that booksellers are going to have a hard time this holiday season. With all the competition from video games and other media, the printed page just isn't that exciting to a lot of consumers. I don't think that books will be a top priority as the wallet continues to get squeezed and while job security remains an issue. Our attention spans have been cut so short these days, and they're only getting shorter. In an era of MTV quick-edits and PowerPoint presentations, 100,000-word diversions don't feel so diverting anymore.
Books are probably even less exciting to young people. Seriously, how many kids have books on their Christmas lists this year? They may want the latest Blu-ray cartoon from Disney (NYSE: DIS), or the latest Call of Duty game from Activision Blizzard (NASDAQ: ATVI), but I'm not so sure they want the latest Stephen King novel (as for me, I picked up King's latest short-story collection Just After Sunset at my local Barnes & Noble). Many kids have been introduced to the joys of reading through the Harry Potter series, but I don't think Potter will be working his magic this season. If parents do cut back this year on presents, I figure they're going to err on the side of making sure that all the non-book gifts are acquired.
Is there anything the booksellers can do about this?
There's probably precious little that can be done, outside of being blessed by a few titles unexpectedly taking off and driving sales. Sure, the major chains can market their brands more, increase the number of events at their bookstores, etc. But I'm not sure that would do much.
What about emphasizing items such as music and movies? Wouldn't work. When consumers think of music and movies, they think of Best Buy (NYSE: BBY) and Wal-Mart (NYSE: WMT). Let's face it -- booksellers have to live or die by selling books. That's their big value-driver. It'll be a tough holiday season for hardcovers and paperbacks, and I think staying away from the stocks of Barnes & Noble and Borders Group would be wise.
And now, let me get back to my Stephen King collection.
Disclosure: I own Activision Blizzard, Disney; positions can change at any time.
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Reader Comments (Page 1 of 1)
11-12-2008 @ 7:14PM
Caterina Pryde said...
I think you're way off the mark. I can get 10 kids/YA books for the price of many of the new video games. And that's without my membership discount. Books last longer, can be re-read, and can be taken to a used shop to trade for new reads. My godchildren all have books on their Christmas lists, and I am happy to get books for each of them. Got a kid who isn't a dedicated reader or has a short attention span? Get a graphic novel! Parents and family should encourage books and look to them as enjoyable, sensible, and less expensive gifts, making it better for everyone!
11-13-2008 @ 10:06AM
Rob P. said...
I agree with the last comment. I work for a bookseller and while we have not been as busy as last year I am still busy. From my personal experience I think that people would rather buy a book for their child than a video game or movie. Look at the success of the Twilight series and with the new Harry Potter book being released in December. We are all struggling but I think from what I've seen is that books may not be going the way of the dodo as many people think
11-13-2008 @ 11:00AM
Gary said...
I think you are both right and wrong. I think your main point of the article, that book sellers stocks are not a good buy at this time, is correct. But I would not go so far as to say people are going to stop buying books altogether during this recession. I think like everything else, people are going to prioritize their purchases of books. They will purchase the books they want to read the most, and borrow any other books from the library.
I also think you are wrong about Harry Potter. Tales of Beedle the Bard is going to be huge, all the kids who read Potter are going to have to have it, and it will sell millions of copies this Christmas.