If you walk into any major Barnes and Noble or Chapters bookstores, you will notice a slew of people reading. All of these book chains provide couches, desks, and plenty of chairs to chill out and check out some books. Often, people sit for hours, plowing through the majority of the book, and then leaving. Could bookstores get away with charging people to read for hours?
HarperCollins CEO Victoria Barnsley doesn’t think the idea of bookstores charging users to read is “not that insane.” In a recent radio interview in the UK, she talked about how bookstores are facing some downward trends. She predicted that in the next few years, the ebook and traditional book industry will level off, to a 50/50 split. Many stores are facing increased pressure to compete against .99 ebooks from Amazon, and have to look at alternative revenue models.
It is alternative models that have really changed the chain bookstore, all over the world. In Canada, and the US, you now have Starbucks cafes in almost every Indigo, Chapters, and Barnes and Noble store. In the UK, Waterstone’s added a ton of different cafes to most of their larger locations. All of these stores have also added stuffed animals, holiday themed accessories, e-readers, plates, cups, and lots of other stuff. Bookstores these days rely on high margin items to offset the decreased sales.
Chapters has reported a 4.9% decrease in revenue in Q3 2012, according to recently released financial numbers. They cited a lackluster demand for Kobo e-Readers, as the market has reached a saturation point. Barnes and Noble actually reported a very small profit of 2% in the entire 2012 year. Most of this success was pinned on their ebook and e-reader division, which saw a 45% increase for ebooks and 119% for readers. Most stores are not in a position to sell ebooks and readers directly and must do business with Amazon and Kobo, which undermine’s their long-term revenue potential.
Every store you walk into has people chilling out and reading books for free. If you hit the bookstore on your work break, you can often complete a novel in a few days. I know this because I used to do it. Could bookstores charge these regulars that sit for hours reading and never buying anything? How could they police this? Would they issue special cards or incentives with their loyalty program to buy into this? There is many questions up in the air, and suffice it to say, we have it on good authority that many large bookstores are evaluating programs like this.