Tuesday, 19 July 2011

Simply Business

There are two interesting business episodes unfolding, which I kinda have an interest in.

First, Borders Books are bankrupt, period.  They thought someone would come out of the shadows and buy them....but the amount of debt and unsustainable profit is an issue.  To be honest, between Amazon and these digital books available....it's hard to be a local neighborhood book store (even in a massive mall).   It is a sign of the times.

A trend here?  Digital books are growing and I would suspect by 2020 that seventy-five percent of all books will be digital, as sales go.  I won't say it's a positive trend, but at least people are still reading.

Borders was this place you go and hang out....picking up an odd book for five minutes and sitting at some easy chair.  If you felt right with the book, you bought it.  Coffee?  Yes.  It was a good atmosphere, I will admit.

The other big story?  Readers Digest wants to sell itself.  Amusingly enough....they want a billion dollars.  Last year, they had around 1.4 billion in revenue, but that equaled around thirty million dollars in losses.  To me.....that's a huge signal that you've got big problems.....over a billion in sales, and you still can't show revenue.

Who buys Readers Digest?  Mostly older folks and medical establishments.  If you go to a routine dentist or doctor's appointment....you typically find it still laid out and offered as reading material while you wait.

As a kid, I remember reading it.  The last time I picked up and read one?  About six years ago.  I actually bought one.  What I found laid out in the one I bought.....one extremely political story in favor of John Kerry, and two stories over the environment and global warming, which tried to sound factual but were loaded with unproven points.  I sat there shaking my head because it'd turned into the National Geographic....just another trend magazine run mostly by a bunch of agenda writers and editors.

Will anyone come up to pay a billion for Readers Digest?  I suspect few if any takers.  They might eventually unload for around $750 million and end up in the hands of some Brazilian or Saudi billionaire.  They would likely hire out a number of cheap writers to contribute and try to remake the magazine into something totally different.  Eventually, it'll fail completely and disappear from the shelves.

So in the end....two more dinosaurs dying out.