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Broken Bookselling

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Barnes and Noble Pressures Publisher with Brass Tactics--Situation called "Despicable"

March 23rd 2013

Barnes-and-Noble store shot

Barnes and Noble, increasingly being viewed as a bully in bookselling, has made headlines again--this time, for coercive tactics in exacting extras fees from publishers. The victim this time is famed publisher Simon and Shuster. The New York Times reports: "A standoff over financial terms has prompted the bookstore chain Barnes & Noble to cut back substantially on the number of titles it orders from the publishing house Simon & Schuster, raising fears among other publishers, agents and authors that the conflict may harm the publishing industry as a whole.

Industry executives, as well as authors of recently published Simon & Schuster books and their agents, say that Barnes & Noble has reduced book orders greatly, to almost nothing in the case of some lesser-known writers. They contend that the move is damaging their sales. Authors say the retail chain has taken other steps, like not giving them display space or allowing book tour appearances in its stores. Simon Lipskar, the president of Writers House, a literary agency in New York, said, “Without pointing fingers, authors are being hurt by this, and I think it is despicable.”

The Times continued: "The dispute centers on the financial arrangement between Barnes & Noble and Simon & Schuster. While neither side will specify exactly what new terms Barnes & Noble is seeking, a senior executive familiar with the negotiations said that the bookseller wanted to pay less for books and receive more money for giving titles prominent display in its stores. Such display spots are coveted because they are thought to be critical in helping customers discover new books."

But some publishing sources that such "display" charges, often called "coop marketing fees" can often function as thinly veiled "kickbacks." One prominent publishing industry source, "When you demand so-called "coop marketing fees" just to carry a book in store, devoid of any real display advantage or marketing--I call that a kick-back. In more than one case, publishers are promised front of store displays for a period of time and it never happens--but BN gets the money--or they refuse to stock the book. Publishers should revolt against such tactics. It might be time for a Department of Justice investigation."

The Times continued, "Simon & Schusterhas argued that while it wants to support the retail chain, it cannot afford the terms Barnes & Noble is demanding. The publisher’s chief executive, Carolyn Reidy, would not give specific details, but said the two sides were at odds over many issues, including both physical and digital distribution. In this new world, it is just getting more complicated,” she said in a phone interview. “There are more factors involved. They get more fraught. Terms have to work for both sides, and obviously we have not agreed yet.”

The Author's Guild releases a statement to its members, "Targeting a publisher by punishing authors as their new books hit the marketplace is an over-the-top tactic that a retailer with B&N's market clout should never employ. A new book makes or breaks in the first few weeks after it hits bookstores."

One author quipped, "Barnes is a very stupid company losing money hand over fist as their numbers decline in store traffic, web sales, and Nook. This latest dumb move again limiting their book offerings only trains their customers to find important books on Amazon. Why would they do that?"

In a article headlined, "Giving Away the Nook: Barnes & Noble Getting Desperate?" Forbes Magazine states, "The margins on these devices are already razor-thin. The company, having sold far fewer e-readers and tablets than expected during the 2012 holiday season, is likely in need of getting rid of excess inventory. This is a very bad sign for the continued viability of the device business struggling bookseller. One digital media observer noted in a recent blog post that he saw a similar pattern of discounting and giveaways right before HP killed off its tablet business. Will Nook be the next tablet brand to bite the dust? The company insists that this isn’t in the cards. Saying it is one thing. We’ll see what the next few months hold."

In the meantime, the faltering bookseller continued to close as many of a third of its stores. The latest to shutter doors is the iconic CityPlace superstore in West Palm Beach--one of the shopping center's original anchor retailers.



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