"How Waterstones killed bookselling" and "How Waterstones crushed the publishing industry" are two articles in today's Guardian (website and G2 – the second possibly not available online) that have been aired and rehashed all over the Internet, unsurprisingly. The Bookseller.com has a good, measured analysis of the Guardian pieces, including pertinent examples of dissenting comments made by readers at the Guardian website.
The Guardian article, by Stuart Jeffries, attacks Waterstones for centralisation of its stock (little autonomy of staff in branches), complex pricing, and lack of specialist choice of books for readers. About half way through, he gets around to the reasoning behind these moves: the first of two huge changes for the UK book publishing and selling industry was the court-induced abolition of the national net book agreement (NNBA, already under pressure in any event) which opened the floodgates for book megastores. These massive shops did pretty well for readers as well as booksellers and publishers, until the second huge change – the Internet, and specifically Amazon, an unstoppable force from which "conventional" booksellers are still reeling, possibly never to recover, even as they create their own bookselling websites (not a patch on Amazon for pricing or stock).
To me, it seems ludicrous to "blame" Waterstones for this state of affairs. True, Waterstones has expanded, centralised, and sells a lot of bland fare that does not differ much from what you can get in a supermarket. But it does also offer a huge range of books for the interested browser or specialist enthusiast, and I know at least two people who like the Costa coffee shop in the basement of the Piccadilly store (as well as the lovely restaurant at the top of the shop). For his article, Stuart Jeffries interviews a few standard book industry people (for example, Tim Coates, ex-MD of Waterstones now well-known for his library campaigns; and Nicholas Clee of Bookbrunch, ex-editor of the Bookseller), but they come up with no realistic alternative for Waterstones – probably because there isn't one.
Factors to consider are that many people who like reading and who buy a lot of books will continue to use real bookstores as well as online retailers in combination. These people like browsing in bookshops but will often go online for either price or stock reasons, or both. I think Waterstones' stock in my own local branch is not bad, but I have to buy almost all the crime fiction I like to read online, because translated or backlist fiction is not cost-effective to store on the shelves – this was true even before the Internet was thought of and while the NNBA was in full force, when I worked in vacations in a bookshop and learnt some basic economics of the cost of keeping unsold, low-priced stock (an individual book) for considerable time. A lot of other people either don't buy many books over a year, and/or use the library.
A much better article than the Guardian's blaming broadside, in my opinion, is this one at the Idea Logical blog (8 November): "Can the chains provide us with better small bookstores?" In this piece, Mike Shatzkin analyses the rise and fall of the huge bookstore in the USA, concluding that, in the post-Internet retreat of the giant megabookseller, a great stock is no longer the answer for profitability. He suggests that a solution that might work for the future is a mini-B&N or Borders sited within another large retailer. "This will require a different kind of inventory management than the chains exercise now; more of a rack-jobbing approach. But their capabilities: to source books, select books, organize books for presentation, and to deliver books all over the United States, will have more consumer demand than they’ll be able to satisfy with only their own very large stores." Waterstones might take note of this idea – instead of the Costa or Starbucks within the bookshop, the bookshop becomes within the Costa or Starbucks!
Already the bookselling industry in the real (not online) world has separated out into the "top 1000" books, sold at heavily discounted rates often in supermarkets (which only stock "top" titles); and "the rest". The question is, will it be profitable enough for booksellers to continue to sell "the rest"? And will it be profitable enough for publishers to continue to publish "the rest" of authors? People who love reading and buy a lot of books will read a higher proportion of "the rest" than of the "top 1000". But whether collectively we read and buy enough to support these industries is a question to which I don't know the answer. I do know, though, that the suggestions in the Guardian article (comfy chairs, etc) aren't going to stimulate or sustain the traditional bookselling business to the extent necessary for survival – especially with technologies such as e-readers and print-on-demand machines on the scene.
See also: The Third Player, an excellent post at The Digitalist blog, looking at the future of the e-reader and e-book market, and the possibility of Google's dominance of the whole supply chain.