Sterling Publishing and Barnes & Noble Books

Barnes & Noble bought Sterling Publishing a little over 3 years ago, and publishing has been a rapidly growing segment of Barnes & Noble's strategy ever since. Sterling has over 5,000 titles in print and is adding about 1100 annually, primarily in the How-To area. Barnes & Noble also acquires books from other publishers, such as the "in easy steps" computer series from U.K's Computer Step publishers, and Barnes & Noble also publishes an extensive backlist of out-of-print and out-of-copyright classics. According to their annual 10K filing, Barnes & Noble also "commissions books directly from authors" and "creates collections of fiction and non-fiction using in-house editors." All of this shapes up as good business for Barnes & Noble, but doesn't cheer most self publishers.

The reason has to do with shelf spaces and market saturation. Barnes & Noble is the dominant bookstore chain in the country, and they have a good record of working with small publishers when it comes to in-store events and stocking titles. However, as their annual report points out - "Each Barnes & Noble store stocks from 60,000 to 200,000 titles, of which approximately 50,000 titles are common to all stores." For the true super stores which stock 200,000 titles (though I suspect they may have meant "books" rather than "titles") that leaves a lot of room for regional or independent books, but the smaller stores seem to do an excellent job stocking the Barnes & Noble published books (and they'd be nuts not to), so it's a scary thing for a small nonfiction publisher to find that a Barnes & Noble imprint is publishing a competing title.

Barnes & Noble now has some 10,000 books in print, and they tend to be lower priced than the competing titles, which while great for customers (vertical supply chain) doesn't make publishers very enthusiastic. I seem to recall Steve Riggio saying last year that they were targeting 10% of book sales as self-published by Barnes & Noble. I also seem to remember him saying three or four years ago that they were targeting 5%, so it stands to reason if they reach 10%, they'll up the ante again.

With half their books coming from their Sterling subsidiary which specializes in how-to, and a good chunk of the remaining half also in the how-to segment, it's safe to assume that how-to publishers are at the greatest risk for the time being. The how-to emphasis makes sense, since Barnes & Noble can easily track which titles are doing well throughout their chain, than commission or acquire similar titles. They don't need to be huge sellers, the acquisition cost for a commissioned book is pretty low (lots of hungry writers out there) and the guaranteed shelf space makes a large first print run, which combined with the lack of middlemen, makes the low pricing possible. If I was in the process of setting up a new imprint to publish nonfiction, I would look long and hard at my business model and focus on titles I felt would do especially well on Amazon or independent stores, as opposed to making plans based on the whole market.

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