Bookstore Demands Publisher Payola For Stocking Books In Store

from the the-fight-for-survival dept

Similar to the RIAA's attempt to get radio stations to pay it for playing songs, it appears that another struggling industry is demanding payments from partners instead of adjusting to the changing market. BoingBoing points us to the story of a large Australian bookstore that apparently demanded that certain publishers pay it a fee to continue stocking their books. The publisher in this case sent back a rather caustic and mocking letter, calling the bookstore's bluff. We all know that the market for bookstores has changed drastically, thanks to the internet, but the answer clearly is not about stocking fewer books that people want or by artificially limiting what books you stock. Since the internet already has unlimited shelf space, you're only making things worse if you do that. Other booksellers have realized that they need to change and play up what makes them valuable beyond their shelf space -- doing such things as becoming destination sites, publishing their own books and playing up the expertise of the staff. Instead, this Australian bookseller has simply resorted to a weak and unsustainable payola scheme that will likely only hasten its demise. In fact, as this story becomes more well known, even fewer people will be interested in going to Angus & Robertson's bookstores, since they'll now know that the books aren't chosen by popularity, but by who will pay off A&R.


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  1.  
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    berick, Aug 15th, 2007 @ 3:36am

    Bookstore payola

    As a reader, and later an author, I learned long ago that most bookstores don't choose and display most of their books because of popularity or staff decisions about quality. Publishers demand payments, often disguised as "co-op" marketing funds, some of which may be spent on advertising, some of which may just be kept as "payola" to stock the books. It's standard operating procedure.

     

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  2.  
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    vjromeo, Aug 15th, 2007 @ 4:25am

    got it backwards

    This bookstore's move (however foolish in the grand scheme of things) is more similar to the old days of music labels paying DJs to play certain albums, than to RIAA's recent attempts to extract more money from radio stations for the rights to play their songs. In fact, it's also similar to some of the clamoring/backlash against RIAA arguing that labels should be paying the radio stations to play the songs because without the exposure radio provides, most albums would totally flop. (Most folks go and buy a CD or purchase a song from iTunes because they first heard it on the radio.)

    That being said, I think it is a valid point that brick & mortar bookstores are already facing an uphill battle with their online competitors, and this move seems like shooting themselves in the foot.

     

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  3.  
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    chris (profile), Aug 15th, 2007 @ 4:59am

    playing up the expertise of the staff? WTF?

    maybe it's different down under, but in the US, a bookstore is like any other retail establishment... staffed primarily by apathetic retards.

    sure, once in a while you will find someone interested in helping you or who knows how to check the stock of a given item, but for the most part, the only difference between the people at barnes and noble (or best buy) and the tards at mcdonald's is that one smells like french fries when he fails to do his job, and one does not.

    hiring competent people might cost more, and when your industry is getting killed by the web (thanks to everyone's perception that your employees are incompetent), spending more just isn't a option. that's big box retail thinking at it's finest.

     

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  4.  
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    Nasty Old Geezer, Aug 15th, 2007 @ 6:02am

    Re: playing up the expertise of the staff? WTF?

    Chris, stop linking mental retardation with laziness.

    My daughter and most challenged kids like her are happy, enthusiastic, and willing workers. They bring 100% effort every day, and rarely whine or complain.

    It is lack of work ethic and not lack of intelligence that you are focsedon, so call it like it is -- self-centered laziness with a heavy dose of entitlement.

    Off topic, but damn I get riled up about this.

     

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  5.  
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    Josh Bernoff, Aug 15th, 2007 @ 6:31am

    It's called slotting fees

    This is common in the grocery business. It's called a slotting fee. Retailers pay similar fees in electronics stores for "co-op advertising" or "endcaps" -- not explicitly fees to get carried, but it's the same thing.

    I don't think the same model applies to bookstores, but it's wouldn't be unprecedented.

    I bet some form of this is already common in smaller bookstores (like mall stores) with limited shelf space.

     

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  6.  
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    Stephen, Aug 15th, 2007 @ 7:03am

    co-op

    Don't conflate co-op and placement with what this is, flat out extortion.

    Co-op is a fund based on the total sales of a bookstore of a publisher's product that the publisher pays into to split costs of promoting a book locally. Placement fees are paid to get a book sitting on, say, the new release table. If a publisher doesn't offer co-op for a book or pay a placement fee, the bookstore will still take the book, but likely not as many copies. This will render the book less visible, but it is still available.

    What this bookstore is trying to do is get publishers to pay for availability, which is the retail version of vanity publishing. What this scheme reveals is just how much trouble the store is in. If they had customers for the publishers' books, there would be no need for the scheme. And if they had customers for the larger publishers' books, then they would just not carry the smaller publishers' books. Clearly, though, they have no customers, which means they now how to try and make their money off their suppliers. This chain is doomed.

     

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  7.  
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    chris (profile), Aug 15th, 2007 @ 7:07am

    Re: Re: playing up the expertise of the staff? WT

    It is lack of work ethic and not lack of intelligence that you are focsedon, so call it like it is -- self-centered laziness with a heavy dose of entitlement.


    very true, but it's easier and makes me feel better to say retard. i feel entitled to say things like that when i make sweeping generalizations :-)

    seriously, if your daughter is mentally or physically challenged, but is still capable of looking in a computer to tell me that that a given item is in stock, or understands that "no onions" means "don't put onions the thing he ordered", i would assert that she might not be handicapped at all.

    i mean, she is capable of doing what a good deal of the american retail/food service workforce is not. in that context, she might actually be considered "superhuman".

     

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  8.  
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    RandomThoughts, Aug 15th, 2007 @ 7:32am

    Bookstores have a finite amount of space available to sell their products. I see nothing wrong with charging publishers to display their books. If they were writing more interesting books, more people would demand that the store carry it.

    Sure, it hurts the small publishers, but isn't that what the Internet is for?

     

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  9.  
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    |333173|3|_||3, Aug 15th, 2007 @ 8:32am

    Angus and Robinson

    A&R is the main high-street retailer, which specialises in high-volume sales, not more minor books like Border and Dymoks do.

     

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  10.  
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    Kent, Aug 15th, 2007 @ 9:14am

    Re:

    As others have noted, the issue isn't asking a publisher to pay for (premium) display space, (premium) store placement or marketing. It's for stockage. What the bookstore wants is to make money from both ends. It's gouging, plain and simple. Imagine if a restaurant charged you food, but also charged a farmer a kickback fee for using vegetables from his farm because "vegetables don't generate enough profit". Ridiculous, isn't it?

     

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  11.  
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    RandomThoughts, Aug 15th, 2007 @ 9:26am

    Kent, if you can make money off of something, a good business should. If they can demand money from publishers while not hurting their other revenue streams, then that is the smart thing to do. If they gain money from one place only to lose money more money than gained, then its stupid.

    Ultimately the consumer will make its choice. Like I said before, there is always the Internet for publishers that don't want to play ball. I have a feeling that this bookstore isn't demanding any money from the Harry Potter publishers.

     

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  12.  
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    Dave, Aug 15th, 2007 @ 11:24am

    already happening

    Yes, I agree that instead of simply demanding money for placement, stores should consider offering value that can't be found online. Otherwise, they'll get trashed by amazon, et al.

    But as far as I know, payola for display has been happening already. It's just been more disguised before now, using things like discounts, incentives, etc., which are somewhat less pimp-worthy than simply demanding cash up front.

    I'm pretty sure that huge "walls" of the latest lame-o bestseller don't occur due to a bookstore's generosity or their worry that you won't notice the book unless there being six hundred copies in your face.

     

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  13.  
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    Anonymous Coward, Aug 15th, 2007 @ 12:03pm

    As others have mentioned, this is a common practice in many industries where shelf space is at a premium. If the publisher publishes books which are not in high demand, this is not a bad thing. The bookstore owner needs to maximize his assets. On the other hand, most bookstores require the publisher to buy back at full price any books the bookstore feels it can not sell. (The bookstore returns usually just the cover, and is supposed to destroy the book itself). If this is a small publisher who does not do this, then paying for the shelf space is reasonable.

     

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  14.  
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    Calix, Aug 15th, 2007 @ 12:30pm

    Ask your local supermarket (particularly a chain store) how they decide which products get end-caps and eye-level shelf space and which ones are buried in the inaccessable neather-reaches of the store.

    Payola, indeed.

     

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  15.  
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    Vincent Clement, Aug 15th, 2007 @ 1:17pm

    Re: It's called slotting fees

    There is nothing wrong with two parties, for example a retailer and a supplier, from entering into an agreement that the supplier will pay an additional amount for placing their product in a strategic location.

    The same applies to radio stations and record companies. If a record company wants a particular song played more often, they should be free to pay for that privilege.

    Payola, like the terms "price gouging" and "overcharging" are man made concepts that are created and defended as a means of protecting some disenfranchised group.

     

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  16.  
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    Joel, Aug 15th, 2007 @ 4:30pm

    Angus & Robertson stores are mostly small inner metropolitan stores (prime real estate, high number of customer 'walk-ins') that stock best sellers and popular technical and reference books. If people want 'staff expertise' or coffee with their purchase they don't go to A&R. A&R know what they do best.

     

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  17.  
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    Scott, Aug 15th, 2007 @ 6:17pm

    How is this any different the the soft drink industry or other food industry players and the US retailers? They pay to place product at specific locations in our grocery stores. The soft drink companies pay US school systems BIG BIG money to place their products in the schools. So how is paying for book placement any different?

     

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  18.  
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    Mike (profile), Aug 15th, 2007 @ 10:27pm

    Re: It's called slotting fees

    This is common in the grocery business. It's called a slotting fee. Retailers pay similar fees in electronics stores for "co-op advertising" or "endcaps" -- not explicitly fees to get carried, but it's the same thing.

    No, this is quite different. I actually used to work in the catalog business where co-op advertising was everything. But this isn't co-op advertising. This is demanding to pay to be shown in the bookstore at all. In the grocery business co-op and endcaps are for preferential treatment, not to be carried in the first place.

    Even worse, this isn't a negotiated deal, this is simply telling the publisher that it needs to pay up to be carried at all -- even if customers are demanding the book.

     

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  19.  
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    Vincent Clement, Aug 16th, 2007 @ 6:48am

    Re:

    This is not about book placement. It's about stocking the book. The book store is saying "Carrying your books is eating into our profit. If you want us to carry your books, you need to pay us X amount of dollars for the privilege by this date otherwise we will no longer carry your books".

    I don't see anything wrong with this from a libertarian point-of-view. A business is free to decide what they sell, where they place those products and so on. But given the plethora of alternatives, I can see this backfiring.

     

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