Bookstore Owners Cry Foul

Steve Murphy, president and CEO of Rodale Inc., sits at his desk on Oct. 17, 2003 in Emmaus, Pa. Rodale, Inc., publisher of the million-selling "The South Beach Diet," foreground, is among the publishers that sell their books directly on the Internet. AP (file)

For David Shanks, CEO of Penguin Group (USA), the logic is simple: If a potential customer is surfing the publisher's Web site, why wait for that person to buy from a store? Just sell the book right away, directly from the site.

But for many retailers, the logic is equally as simple: When publishers sell straight to the public, bookstores lose.

"I would hope that publishers try to drive sales to us, their customers," Mitchell Kaplan, owner of Books & Books in Coral Gables, Fla., says. "It doesn't make sense for publishers to compete with the people who sell their books."

Last month, Penguin began selling about 200 titles through its Web site and hopes to expand to the entire catalog. Featured books include such best sellers as Kevin Phillips' "American Dynasty" and J.D. Robb's "Divided in Death." (Robbs is a pen name used by author Nora Roberts.)

"The publishing business is becoming tremendously competitive," Shanks says. "I don't think it's acceptable in a market like this to wait for someone to put on his coat and go to the store when they can order the book from us."

"We're trying to re-create the experience of someone walking into a bookstore. But in our bookstore we have the unique opportunity of only selling our books."

Shanks says popular titles on the site have ranged from science fiction by William Gibson to automobile repair books. Initial sales are expected to be small, but Shanks says the site has over 500,000 monthly "users," those who don't just look at the home page but actually click on to a link. While no discounts are currently offered for buying direct, Shanks does acknowledge he might cut prices.

"It's a learning experience for us," he says. "If it turns out that a 10 percent discount tripled the number of people who wanted to buy books off our site, that's a piece of information I'd like to know."

Booksellers are criticizing Penguin, but other publishers had already been selling from their own Web sites, including W.W. Norton, which released such best sellers as Paul Krugman's "The Great Unraveling," and Rodale Press, publisher of the million-selling "The South Beach Diet."

Scholastic, Inc. angered retailers last spring when it sold "Harry Potter and the Order of the Phoenix" directly to students at school fairs. But the publisher's Web site offers direct sales of Harry Potter and other Scholastic books.

"It's a small, separate program and we don't think it interferes with our other sales," Scholastic spokeswoman Judith Corman says.

Simon & Schuster, Random House, Inc. and HarperCollins are among the publishers who say they have no plans to sell books by way of their Web sites. However, none would rule out doing so in the future. "We find referring books to our customers works quite well," Lisa Herling, HarperCollins spokeswoman, says.

CBSNews.com and Simon & Schuster are both part of Viacom, Inc.

Retailers say that instead of claiming the sales for themselves, publisher Web sites should offer links to stores. HarperCollins' site, for example, tells consumers that it does not sell directly to them and instead includes a long list of bookseller links.

Scholastic has no link to bookstores, while Norton includes a link directly under the tab for purchasing straight from the publisher. Penguin also offers a link, but only at the bar on top, under a tab that reads "How to Order." Meanwhile, a tab for buying from Penguin appears in a more visible location: In the body of the page, alongside an image of the chosen book's cover.

"It's a disturbing trend, but probably an unavoidable one," Michael Powell, owner of Powell's Books, in Portland, Ore., says.

"In the old days, these publishers would have simply referred customers to a bookstore. But that civility has gone by the boards. What they're saying now is they'll capture any customer if they can."



By Hillel Italie
  • Bootie Cosgrove-Mather

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