The emergence of new bestsellers priced for cheap and the rise of digital books are prompting bookstore owners in the state's largest city to rethink their stores and position themselves for an uncertain future.

Like many other cities, Anchorage endured a wave of bookstore deaths over roughly the last 15 years. A bunch of independently owned book shops, including all 19 in the Alaska-based Book Cache chain, shut down by the end of the 1990s. Several more bit the dust more recently: Cook Inlet Book Co., Gulliver's Used Books, A Novel View.

Yet other local booksellers have persisted, evolved and even thrived as the industry has gone through waves of changes, from the rise of big-box booksellers in the 1990s to the current movement toward e-books. For example, Title Wave Books, begun in 1990 as a tiny storefront, grew during this period into its current large space in Spenard's bustling Northern Lights Center mall, and spun off a satellite store downtown.

Now, time-tested retailers like Title Wave are making big changes to prepare for a new wave of change.

Title Wave is amid an expensive remodeling and has returned to its used-book roots.

Metro Music & Book Store up the street, has moved heavily into used books too.

Borders Books Music & Cafe has slashed its stock of CDs and is pushing an e-book reader.

For booksellers, the ongoing national recession has caused a sales decline. But that is a lot less worrisome than some fundamental changes in the way people are reading books and the price they expect to pay for a new release.

The digital revolution that has battered travel agencies, newspapers, record companies and many other industries, recently birthed e-books, which people can read on their computer or on devices such as Amazon's Kindle and the Sony Reader series. Barnes & Noble says it will launch its own digital wireless reader, called nook, at the end of November.

The digital readers cost hundreds of dollars up front, but e-books sell for less than their physical counterparts. Now some major online retailers, including Walmart, are pricing new print copies at enormous discounts. That, in turn, is squeezing retailers that can't compete with Walmart on pricing.

"It's like a perfect storm," says Julie Drake, Title Wave's co-owner.

SURVIVAL OF THE FITTEST

The landscape is littered with the ghosts of companies that couldn't adapt to technological change.

As an independent bookseller, Title Wave can't easily compete with global retailers' price slashing.

"That's not a war we are going to win," said Julie Drake, co-owner of Title Wave.

So her company and some others in town have begun to change their business models.

Drake said she and her husband, co-owner Steve Lloyd, began thinking hard about their future last spring, soon after the recession hit Alaska and hurt their sales. The first e-book reader, Kindle, had launched the previous spring. The couple decided to return to Title Wave's origins as a used-book seller. They stopped buying most new books -- Alaska books are still on the menu -- and non-paper novelty gifts. They lowered their prices.

In making the changes, the couple returned to what they loved doing the most. "We enjoy being hands-on with the used books. It's like a treasure hunt," said Julie Drake. (Her husband is a historian and shipwreck diver.)

Title Wave also launched store improvements. It has spent several hundred thousand dollars this winter on renovations at its flagship store in Spenard, installing new flooring and shorter shelves and merging customer service and sales desks in the middle of the store. The company closed its smaller, downtown location for the winter and moved those employees to Spenard to help with the transition, Drake said.

Another Anchorage store, Metro Music & Books, on Benson Boulevard, also is adapting to "the more difficult retail situation" by overhauling its product mix to sell mainly used books, said longtime owner David Shimek.

At one time, Anchorage had as many as eight used-book stores, estimated Kathy Cervantes, who co-owns C&M Books, a used-book store downtown since 1974.

"We don't really fool with the new books and we never really have," she said.

She's said she's skeptical that e-books will own the future. "It's nice to curl up in bed with a good book. The people who really read feel that way," she said.

BIG SELLERS PINCHED

This isn't just a hard-luck tale of independent book sellers losing to competition from large book chains.

Big bookstore chains are getting pinched by the same rivals the independents face.

Competition from other retailers and the growth of digital devices led to a decline in store sales and profits, Borders Group said in its 2008 annual report to shareholders.

In the report, Borders Group says it wants to evolve to become "the bookstore for the serious reader" and that it sees sales on its Web site as a potential growth area.

Waldenbooks, owned by Borders, announced it will close about 200 stores soon, possibly including the one in Ketchikan, a town with only one other full-service bookstore, the independent Parnassus Books.

The Waldenbooks in Wasilla is expected to remain open.

Along with other Borders in the Lower 48, and like Title Wave, the Borders in South Anchorage remodeled last summer, adding an educational-toy section, increasing the number of books, expanding its seating area, and shrinking its multimedia section of music and DVDs.

Due to the growth of Internet music downloading, "There are Borders stores now that don't sell any music," said Grant Larsen, the manager of the South Anchorage store.

Nationally, book sales have slowed at Barnes & Noble, too, according to its financial reports.

Barnes & Noble, which opened its Midtown store in 1996, declined to comment for this story.

DISCOUNTING

A more immediate threat than e-books, perhaps, is that some of the nation's biggest retailers -- Walmart, Costco, Amazon and Target -- have moved big into discount book sales.

The three are now waging a price war over a number of best-selling books so intense that it has pushed their prices below wholesale costs, according members of the American Book Association, a trade group that in October asked federal prosecutors to open an antitrust investigation.

In recent months, the retailers have adjusted their prices for pre-orders of several major new releases by mere pennies, trying to match or beat each others' discount offers. Former Gov. Sarah Palin's biography, "Going Rogue," is one of the books caught up in the price war. Its list price is $28.99 but it's available pre-ordered on Amazon for $9 and on Walmart's Web site for $8.98.

The ABA told the U.S. Department of Justice that such pricing is a "predatory attempt" to win control of the market for hardcover best-sellers, and that the entire book industry could be inadvertently destroyed as a result.

Keeping up with markdowns by larger retailers was a big headache for Title Wave.

It remains a big challenge for Borders, Barnes & Noble, and other booksellers that specialize in new books.

"We don't price match. Our future is not in discounting, it's in the depth of our selection," said Larsen, the Borders manager in Anchorage.

THE FUTURE

Is the day coming when most Alaskans will stare at a screen rather than curl up under a blanket?

Anchorage booksellers don't think so. Not yet, anyway.

"I think there will always be booksellers," said Shimek, of Metro Music and Books.

"In some ways books are actually better positioned than a lot of other products ... most people would rather have a book than a computer screen to look at," he said.

He added, "A friend of mine purchased a Kindle a few weeks ago and now he's scratching his head, wondering where he left it. I don't know what happens when you lose your Kindle but I don't think it's good."

It's clear, though, that the Kindle has developed a fan base in Alaska.

One Kindle owner, Joe Dugan, said he does about 90 percent of his reading now -- magazines, books and The New York Times -- on it. He said it's not as good a tactile experience as actual books or magazines, but "the convenience is fantastic."

He said he still subscribes to magazines and "likes having a lot of books around," but he can imagine a day when he does all of his reading digitally.

"I don't want to admit that possibility exists, but it does," he said.

Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.

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