First, Amazon will continue to grow as a retail channel, while bricks-and-mortar booksellers (including the bookselling chains like Barnes and Noble) will find themselves squeezed further and further, leading to more bookstore closures and downsizing on the part of the chains. In many ways, the bankruptcy of Borders in 2011 marked the end of an era, in the sense that the age dominated by the big retail chains, rolling out their superstores across America, is now over. We’re entering a new era when those retail chains that remain are in a much weaker position and where Amazon has become the main retail force to be reckoned with.
Second, publishers with weak balance sheets and companies that are highly leveraged will face growing financial difficulties, the pressures on medium-sized publishers will intensify and some of the large conglomerates will probably decide that the time has come to divest themselves of their trade publishing interests, which were always a very small part of their overall business anyway, leading to further consolidation in the hands of a small number of large corporations that remain committed to trade publishing and continue to see it as a worthwhile part of their portfolio.
Third, the decline of retail space in bookstores - the shop windows, front-of-store display tables and rows of bookshelves - and the decline of book review space in traditional print media like The New York Timeswill make it harder for publishers to get their books noticed, so the struggle for visibility will both intensify and become displaced, as publishers are forced to devote more and more of their marketing effort to the online environment, where they will hope to find new ways of bringing their books to the attention of readers.
Fourth, the shift from print to digital will continue, though the speed and extent of the shift will vary from one type of book to another and one author to another, and income from e-books and other forms of electronic sale will become an increasingly significant part of publishers’ revenues, though exactly how significant is, at this point in time, unknown - maybe 20 percent, maybe 30, maybe 50, maybe more, no one knows.
Fifth, as more sales shift to digital and the sales of physical books decline, the large publishing houses will face growing downward pressure on their revenues, calling into question their ability to generate year-on-year growth and refocusing their attention more and more on the reduction of costs and overheads in an attempt to maintain or improve their profitability.
Sixth, the infrastructure supporting the traditional book supply chain - warehouses, sales forces, etc. - will come under increasing pressure, forcing publishers to scale back their operations and look for new ways to keep the physical supply chain going while at the same time trying to shift their organizations to a new way of doing business.
Seventh, small publishing operations and innovative start-ups will proliferate, as the costs and complexities associated with the book supply chain diminish, and threats of disintermediation will abound, as both traditional and new players avail themselves of new technologies and the opportunities opened up by them to try to eat the lunch of their erstwhile collaborators.
