That didn't take long. I've been writing about independent bookstores for the last few days. I've been saying that Barnes & Noble and Borders were little more than ponzi schemes, based on a consignment system that puts all the burden on the publishers.

It stands to reason. Book sales have been flat for almost a decade, the same decade that these chainstores have been opening store after store. These are public companies, with shareholders who demand ever increasing results.

But how can you create ever increasing sales when the market is flat.? Well, first you wipe out over half the independent bookstores. Done. The few surviving indys are the hardy weeds that they can't quite seem to poison. Now Amazon has come along to play their game even better than them. (Of course, with the same ridiculous strategy of trying to steal more and more market share from a stagnant pool by discounting. Never mind profits, look how we're growing!)

There isn't enough market share to steal from the indy's anymore, who represent less than 10% of the market. They've probably pushed the publishers about as far as they dare, or as far as the publishers can go without disappearing. You can't return every book!

Yesterday, it was announced that both Barnes & Noble and Borders had declining sales last year. Their stock took a hit. Borders hints about 'restructuring overseas' blah, blah, which means that they really want to unload their overseas outlets. They have separated from Amazon as their online outlet (which was a little bit like chickens hiring a fox to sell their eggs...)

Years into the internet, they are getting started in their own online venture. Good luck with that.

Borders is closing half of the remaining Waldenbooks, which pretty much confirms the cannibilizing of their own sales contention. It's a little bit like saying, we are going to eat our right arms so we'll be healthier in the future. And finally on the Borders side, , (who comes off as in worse shape than B & N) they want to expand their non-book and resturant business; right; can't sell books, so we'll sell latte. But wasn't the original purpose of the cafe's to bring people to books? Not a healthy sign when that is reversed.

Meanwhile B & N is saying that their 'discount; programs have hurt their profits.' No, duh.
Yet, I can't see them reversing course, not with Amazon crouching on the horizon.

There is talk of a merger, which would mean a company with more than half of all book sales, which pre-Reagan would have been the very definition of a monopoly, but would probably pass muster in our current laisse fair atmosphere. Still, the fundamental problem of flat sales remains.

And there is talk of taking the companies off the public stock -- which would probably be smart, because they might finally be able to concentrate on doing the things that would make the book industry healthier; looking at the long term instead of strictly marketshare. A great idea, EXCEPT Amazon is still lurking, and will pounce on any effort to change.

Finally, on the B & N front, they have the audacity to say that the next quarter will be bad because of the major discounting of the new Harry Potter book!

Heres a thought experiment for you:

Imagine if every outlet sold the new Harry Potter book for full price? How many fewer Harry Potter books would sell? My guess is -- they would sell just as well. My wife's guess was they would sell just as well. The first four people I asked in my store, said they would still buy it. The fifth person said they'd wait for the library or used -- there's always one joker....So, say 20% of the readers say they'll wait: right, and the line at the library would be months long, and the used books won't show up for months. I suspect half the holdouts would buy the damn book.

Think of the hundreds of millions of dollars of profits that would generated for the book industry.

Instead, if Borders tried such a thing, all the business would flow to B & N; and vice versa, and if both tried such a thing, Amazon would eat them alive, and they'd probably be accused of collusion.

So none of these three stores are going to make a dime on the book. It's a frakken loss leader.

To me, this is the very definition of 'suicidal competition.' Its a game of mutually assured destruction, where the three superpowers hold the power to destroy their enemies if any one of them tries to change.

So, as a hardy weed of an independent, I'm watching with great interest.