The publishing industry is in the midst of a massive decline, with sales of physical books dropping year after year, and Borders, the second-largest bookstore chain in the US, closing its doors last summer. The rise of ebooks — and Amazon's Kindle, in particular — has been a major contributing factor, but it's the maker of a popular e-reader that publishers are now pinning their hopes on: Barnes & Noble. In a profile on the company's CEO WIlliam Lynch, the New York Times examines the dynamic currently in play between traditional publishing houses and the retailer. It all comes down to bookstores: publishers view the experience of browsing in a physical location as vital to their future success, and B&N is one of the last major US chains left. "That display space they have in the store is really one of the most valuable places that exists in this country for communicating to the consumer that a book is a big deal," Random House's Madeline McIntosh told the Times. Perhaps even more importantly, it allows publishers to maintain the perceived value of a physical book over the often dramatically discounted prices Amazon and other retailers offer on digital titles.
Lynch agrees on the importance of brick-and-mortar locations, telling the paper that "our stores are not going anywhere," although its unclear what he truly sees as the company's long-term prospects. Lynch was the driving force behind the development of the Nook in 2009, and although Barnes & Noble reported a four-percent increase in physical book sales over the recent holiday season, the CEO has also floated the idea of spinning off the Nook business into its own division. Publishers confirm the Nook currently holds around 27 percent of the ebook market, compared to the 60 percent minimum Amazon garners, and B&N anticipates Nook content sales to become a $750 million business by the end of this year — with international expansion on the horizon.
This all comes amidst increasing pressure from Amazon, whose Amazon Publishing imprint has been signing exclusive deals with the likes of Penny Marshall and basketball coach Bob Knight under the stewardship of former publishing executive Larry Kirshbaum. Barnes & Noble has vowed to not carry any books in its physical locations that it can't also carry in the Nook store — an issue that came to a head last year with the Kindle Fire's exclusive with DC Comics — but should Amazon continue to gain traction, the stance will likely only dampen physical sales for B&N. That's not to say the company isn't continuing to fight on all fronts: it's currently putting the final touches on an upcoming fifth Nook device, scheduled to be released this spring.