In unimpeachable Bullet-O-Vision™:
· Borders will continue to operate. As I explained on Monday, Chapter 11 bankruptcy doesn't necessarily entail liquidation. Although Borders plans to close many individual stores, the chain itself will still do business while under bankruptcy protection. This means you can still buy books there and, just as importantly, your books can still be carried there.
· Borders will likely be even more cautious about investing in midlist authors. While their new loans from GE Capital will allow them to finance, among other things, the purchase of new stock, Borders is not in any position to gamble. They're likely, in my opinion, to skip more midlist titles than usual and to only spend their money on names they know they can sell. This will be exacerbated by the aforementioned store closings.
· Publishers may offer lower advances, especially on midlist titles. The industry has depended on Borders as a major market for new titles. If the publisher can't trust Borders to take a sufficiently large number of copies of a given title, this will factor into their profit and loss statements. As a result, they may advance less money to authors in order to increase the odds that any given acquired title will earn out.
· Electronic titles will probably be largely unaffected. Borders was quite the Johnny-come-lately to the e-book scene, and as a result their sales in that sector are dwarfed by their competitors'. Further, even if their sales were a large subset of the market, brick-and-mortar store closings wouldn't really affect their ability to distribute titles electronically via their on-line storefront.
· Local author events may be canceled. Fewer stores means fewer venues for readings, signings, &c. Towns in which Borders is really the only bookstore will, as you might imagine, be the most affected. You can switch to buying books on-line if your local Borders store closes; not so with author events. At least, not yet.
A lot remains to be seen, however, so I'll post periodic updates on Borders' bankruptcy filing and its impact on the industry as events unfold.