Barnes & Noble is re-examining its business model under pressure from e-books. In particular, the brick and mortar store is devoting display space to other merchandise, a Wall Street Journal article noted. While electronic books are still in their infancy, with only 3%-5% of the market, they are fast accelerating the decline of physical books, forcing retailers, publishers, authors and agents to reinvent business models, the article said.
Some predict e-books will be 20% of the market by 2012. E-books sell for less than print books because they are cheaper to produce. If physical book sales decline precipitously, chain retailers like B&N won't have enough revenue to support all their stores. Even with new pricing models pioneered by Apple and others, book stores face pressure. $3.90 is a fraction of the $12.50 B&N now earns on a full-priced hardcover priced at $25. If e-book sales become a quarter to a third of the market, store revenue would plunge.