Requiem for Traditional Book Publishing in Crain's New York

From Crain's New York Business: Another requiem for dead-tree publishing, paired with a great discussion of Jane Friedman, her Open Road, and another interesting start-up, Dale Peck's Mischief and Mayhem.

... Apple's iPad, Barnes & Noble's Nook and new iterations of the Kindle have accelerated the e-book revolution, which is undermining traditional publishing's economics with lower prices than those for hardcover books. It's also threatening the foundation of the business: the humble brick-and-mortar bookstore.

Several weeks ago, Barnes & Noble, the largest bookstore chain, did the unthinkable and put itself up for sale. Independent bookstores, whose ranks have diminished by about half since 2000, continue to close.
The end of bookstores could be the final nail in the coffin for traditional publishing. The big trade houses rely on acres of shelves to sell their wide-ranging titles, from literary and commercial fiction to nonfiction that doesn't have a news hook or a celebrity's name on the cover.

And the end could come sooner than many people think. E-book sales have tripled in the past year, and now make up 8.5% of publishers' revenue. They'll hit 50% by 2015, according to Mike Shatzkin, chief executive of The Idea Logical Co.

At that point, the few stores left standing will sell just a quarter of all physical books, down from around three-quarters today, and big publishers will “come under threat,” he says. “Their value is based on delivering distribution.

... Through May, overall net sales for hardcover books totaled $713 million—a bump over last year's numbers but a decline of 19% from the same period in 2007, according to the Association of American Publishers.

“The hope is that e-book sales will balance out the decline in physical book sales,” says Jack Perry, a former Random House sales chief who consults on digital issues for publishers. “That hasn't happened yet.” ...