Opportunities. In Part 1, I promised to name some and I will, but first a brief recap:

The world of books is is being shaken. The internet has changed the business in profound ways. Ebooks are taking over, so we are told, and the Kindle and the iPad and the Nook are the wave of the future.

Meanwhile, the once dominant bookstore chains have lost their momentum. Barnes and Noble has been closing outlets, indeed has been urged by at least one financial analyst to do it faster, while at the same time throwing cash into a game of technological catch-up. Rival Borders Group is in terrible financial shape, its stock trading at $1.19 a share as of August 13 (a Friday), and may not survive.

So is the bookstore dead? Probably not for a long while, if ever. The better question, I think, is what will work (i.e., what will make money) in this brave new world of both conventional and virtual books?

What has been largely overlooked, I believe, in the emerging Amazon-Apple-Google supremacy is the social side of books and bookselling. Yes, there are blogs and online reviews and forums and so on, but that’s hardly the same as mingling with and talking to actual honest-to-God human beings.

Therefore, one idea that just might work:

A club. No, not a Book of the Month Club. A real club. A place you can walk into. A nice place with good people. A place where you can get a little something to eat and drink. A place where you can hang out and talk and feel comfortable and stay as long as you want. Oh, and there would be books, too!

In my mind’s eye, I see a retail storefont. Just inside a small “public” bookstore where anybody can enter. But at the rear is an ornate door, the entrance to the club. You show your card (or better yet, you’re recognized on sight) and the cashier presses the button to let you into the club.

Beyond the door, you walk into an elegant library-like room with walls lined with bookshelves. There are sofas and plush chairs and little private areas if you want to be by yourself or with a few friends.
Ideally, there is a bar selling at least beer and wine, as well as other beverages. And you can get good appetizer-style food.

So you get your glass of wine or your coffee, and you hang out. You read or you talk to people, and all around are lively discussions about whatever — politics, sports, Nietzsche, novelists, anything.
You can buy what I will call “real” books, or ebooks, your choice. And if you want a title that is not on the shelf, you can order it and it will be there the next time you stop in, or the club will deliver it to an address.

The books are important, but they are more than just an inventory to sold; they are a stimulating ambience for the social gathering. Yet the big draw would be the members. You would form friendships with others, and the club would be the common place for everyone to meet.

Which is why, in my view, it’s a club rather than just a restaurant-bar with a book theme. Clubs by nature are exclusive. Not only can you keep out the riff-raff, you can exclude the obnoxious. Some jerk is routinely hitting on women? He gets bounced.

Let’s remember that one of the reasons the big bookstore chains took off back in the 1990s was that became perceived as places where young singles could go on Friday and Saturday nights, an alternative to the meet-market bar.

The social aspects are a big reason why Starbucks succeeds. The Panera’s chain is another example; it’s a stylish, comfortable environment and people like to be there.

So if you are a person with an entrepreneurial bent and love books — love ideas, love stories — and you have a modest amount of capital to start a business, you’re not necessarily locked out of the game. I think that you can run a successful, bricks-and-mortar, locally owned book-based business, but these days more than ever you have to be innovative.

More to come.

Once the juggernaut of the bookselling biz, the giant Barnes and Noble chain is now struggling. Earnings have plummeted, share price has recently been trading at less than half what was two or three years ago, and the chain is officially up for sale.

“These are dark times at Barnes and Noble,” says the Value Line analyst in his latest commentary. Well, that comment could apply to most bricks-and-mortar bookstores (Borders is in even worse shape), be they chains or the greatly diminished number of indpendent bookstores.

Not many years ago, the big chains absolutely ruled retail bookselling. The major publishers, whose own ranks have been thinned, ran their businesses to the tune of the chains. And whenever a big-chain bookstore came to town, business at neighborhood bookstores often would dry up and blow away. There was a Wal-Mart effect, with once-thriving local businesses being unable to compete on price and inventory, and effectively being driven out of business.

Now the chains themselves are in trouble, and the cause seems to be the growing domination of Amazon in the online realm, with both printed and ebook titles, and indeed Wal-Mart, by volume one of the biggest purveyors of books. Entering the arena more recently is Apple, truly a Lazarus of a company with its huge come-back from what was once a corporate death watch back in the 1990s.

So the once-mighty are teetering, pushed off balance by the new giants. But what about the small? What about the rest of us? The entrepreneurs, the small retailers, the individual sole proprietors just looking to get some toe-hold on which to build a business? What about the chains themselves? Will they ever regain their former prominence? Do they need to reinvent themselves? And if so, how?

My gut tells me there are opportunities here for somebody, maybe for everybody. The problem is that many of them are not obvious at the moment. Without going into the reasons, I have long thought that publishing and bookselling were two related industries long due for a severe shake-up. That shake-up is now happening, and the issue is how to turn it to an advanage.

Yes, size matters. But so does speed. Agility, fresh thinking, specialization, relationships with customers, all of these matter too. There are ways to compete successfully against Wal-Mart, and there are ways to compete against Amazon and Apple. 

I’ll be back soon with observations that could suggest opportunities. In the meantime the thing to do, if you have any entreprenurial or managerial inclination, is to look for the cracks into which you can pound a wedge.