Thanks for the link, John. Here's my take:
B&M bookstores seem to be moribund--but not for awhile yet.
Interestingly, though, this has been going on for quite some time, and not just from the market saturation from Amazon. I think it started 15-20 years ago, when large media groups started gobbling up small publishers. Back then, and going on for years, trade book publishing (as opposed to text book publishing, which is not something I'm well versed in) was a very marginal business. Most publishers, editors, agents, and booksellers worked in the trade because they loved books and literature. Profit margins were extremely tight, just a few percent in a good year. Even small publishers had a staff of readers who would look at everything that came into a house, either from an agent or an over-the-transom unsolicited. They were all hoping to find the new Truman Capote or Norman Mailer or Harper Lee; once found, a promising author would stay with the house for a long, long time--sometimes their entire career.
A new "big" author would basically bankroll the rest of the house, keeping sales coming in and supporting up-and-coming first authors, money-losers, and the daily operating expenses. Apart from some bestselling authors and the houses that published them, nobody really got rich.
Then along came the media groups, who owned radio and TV stations, film production companies, and newspapers and magazines. They were used to raking in double-digit profits, which wasn't realistic in book publishing, so they cut staff, trimmed operation expenses, downsized. The readers were laid off, and now houses depended on agents to do their culling for them, and sometimes editing as well. Sometimes some of the houses weren't even familiar with what they were publishing. An amusing anecdote of this was St. Martin's Press, which, about ten years ago, commissioned a British historian to write a biography of Joseph Goebbels, the Nazi chief of propaganda in the Third Reich; it turned out that the author was a Nazi apologist, and he wrote (and submitted) a very glowing bio of the wretched bastard. Somebody at St. Martin's finally got around to reading the book, which was printed and ready to ship--they were waiting on the dustcovers from the printer--and raised the alarm. St. Martin's dropped the book like a hot potato, cancelled the order, and lost the six-figure advance.
Since then, before Amazon started making money, the biggest bookstore killers were the big-box chains like Walmart and Costco, which would place gigantic orders with the publishers for the Big New Book for the season, and sell them off of pallets in their stores for below cost--these were known as loss-leaders, a way to get people into their stores--and make up their margins by selling large packages of toilet paper or tires or cheap apparel. Many bookstores relied on these Big New Titles to cover their operating costs and finance their backlist collections, and since they couldn't compete with retailers who were selling these titles at a loss, they started going out of business.
Naturally, the large booksellers like Barnes & Noble and Borders didn't help out the small independants, since they could order titles from publishers in large amounts and pad their margins.
The future, of course, is digital. I'm not sure how long B&M stores are going to last (Borders certainly didn't) but sometime in the next decade or two you probably won't see them any longer. Printed books will probably last indefinitely, but they're going to be boutique items, like coffee-table books or small runs of fiction by large authors.
I think it's going to be the small Mom & Pops that are going to go first; they simply can't compete at any level anymore. Used bookstores may last longer, but as the population ages and more and more people become comfortable with the digital formats, the consumer base will continue to shrink.
Sorry to sound so grim, but I really don't see a silver lining out there.