Borders trimming DVD, audio CDs

The unstoppable march toward downloadable media continues, as Borders has announced -- following a $86 million quarterly loss -- that it will be cutting the amount of space it devotes to movies and audio CDs in many of its stores.

The company's CEO Ron Marshall pinned the blame squarely on digital downloads, saying simply that "digital options have overtaken physical CD and movie sales" and that he would be "addressing this intermediation within our business" as a priority for Borders.

What does that mean for your favorite Borders outlet? A smaller, more focused media sales area, and expansion of the company's largest growth areas: cookbooks, children's books, and bargain books. (Cookbooks? Who knew?)

While I'm not sure a lot of people really shop at bookstores for music CDs and movies, the categories have historically been higher-margin selling areas than books have and their placement in stores has made sense. Books have long been seen as a difficult market, with many titles not selling up to expectations and requiring a large number of returns (books which can rarely be resold afterward). As well, the size and weight of books makes them costly to ship and stock, requiring large storefronts and complicated inventory management systems.

Ironic then that the industry is turning away from digital Johnny-come-latelys and going back to its roots. But Borders may really have no other hand to play here: Book sales declined a mere 2.8 percent across the industry from 2007 to 2008 (to $24.3 billion). In comparison, in 2008 CD sales were off 14 percent, and DVD sales fell 9 percent. With the exception of the tiny e-book market (roughly a $50 million market right now) and competition from other media outlets (including the Internet on the whole), books have successfully resisted digital technology at every turn.

Makes sense, really. Ever try following a recipe on your cell phone?