HOLT UNCENSORED #118
by Pat Holt
Friday, January 7, 2000:
ALREADY THE IMPATIENCE LETTERS
AMAZON'S COMING GAMBLE
BARNES & NOBLE'S BIG DISTRACTION
ALREADY THE IMPATIENCE
All I have ever wanted to say in this column is that independent bookstores play a key role in preserving literature and First Amendment protections - and that they have immense power in the launching of unknown authors - because their relationship with customers is based on the kind of trust that chain bookstores and Amazon.com et al traded away long ago.
But already in early 2000, we see story after story saying that companies like Fatbrain.com and iUniverse.com may be "the wellspring of the next technological revolution" (New York Times) because they remove BOTH the bookseller and the publisher from the literary process. It's astonishing that anybody thinks this trend is much more than a nice money-maker for, you know, Fathead and iKamikaze.
This idea of "disintermediating," a fancy word for cutting out essential services that shepherd the miracle of a book from writer to reader, seems to be part of a streamlining move that has newly dominated the Internet.
Over the holidays the business press got cute with such headlines as "Happy New Year: Innovate or Die." Language that was once inclusive now tends to slice out those who are deemed, for no reason at all, out of the game.
Thus we learn that Amazon.com won't make a profit until "the 'cone of opportunity' begins to narrow," as Time magazine put it - "that is, [until] there's no room left for more competitors to enter." Independent booksellers are not even a factor, the magazine implies.
But here's the Big Question I would like to ask at the start of the 21st century: After 30 years of facing competition from chains and price clubs and Internet e-tailers, why haven't independent booksellers - dropping by the thousands only a few years ago - been completely mowed down by now?
Why is it with the $1.5 BILLION in sales at Amazon.com and WITH the thousands of Barnes & Nobles and Borders stores that have spurted up, often right across the street or down the block or around the corner from existing independent bookstores - not alone, mind you, but often in twos and threes (and don't forget Crown Books emerging from the !@#$#$^%^#*! dead) - why is it that independent bookstores are still so much a part of daily commerce, still contributing to the health of neighborhoods and communities (still paying SALES TAX for schools and highways, you irresponsible Internet scofflaws), still launching those unknown authors, bless 'em, and still in many cases REFUSING to go online?
Of course I wish those booksellers who don't have a Web presence would change their minds! But there's a kind of refreshing obstinance in the way they prove, day after day, that the personal, physical act of hand-selling books from one person who can look into the eyes of another is a legitimate and important way to do business. (One wants to congratulate those stalwarts, but ask that they also PLEASE consider going online).
In any case, here we are only 5 days into the New Year and already Amazon.com and Barnes & Noble are separating and defining themselves with new and different commitments than they've ever made before (see below). Wouldn't it be great if they leave the traditional bookselling arena to the independent booksellers who are so good at it?
AMAZON'S COMING GAMBLE
Way back in December I reported on Time's selection of Jeff Bezos as Person of the Year before the magazine was officially out. So I didn't see the . . . the . . . well, there's no other term for it . . . disembodied head of the Amazon.com founder smiling googily out from a packing crate.
So clever! Inside we read that no less than eight people were on "the team that worked on the cover," which perhaps demonstrates why Time has lost a bit of its competitive edge.
Although it didn't get much attention, I felt that Bezos dropped a little bombshell in that issue. While he continues to insist this week that losing money indefinitely is the way to go for Amazon.com, he did promise in Time that the three oldest divisions in the company will soon make money.
His projection even has a timetable: Amazon.com's Books, Music and Video product lines, he says, will be profitable by the end of the year 2000.
Of course, Amazon's net loss for 1999 approached $350 million and those six huge distribution warehouses cost $200 million, so one wonders if a new source of income is about to pop up elsewhere in the company.
It can't be the company's new co-branded credit card, "NextCard," which was announced last November and is projected to bring in $150 million in fees, because that's going to take five years.
Another possibility: When asked how he's going to stop customers who use Amazon's still-dazzling website for research and then go elsewhere to find the cheapest price, Bezos cried, "Membership clubs! If you want to see all the information we collect on Amazon - the customer reviews, the professional reviews and use our agenting technology - you have to pay $30 a year."
Aha. Well, if 12 million Amazon customers paid up, that would be $360 million a year, enough to wipe out something like 1999's loss. But that's not going to happen, is it: Internet users don't like to pay fees for sites they've used without payment. And besides what a gamble it would be for Amazon.com, one of the earliest forces on the Internet to welcome every user to browse, research, dawdle and ponder "the Earth's largest bookstore," and all for free.
Indeed, just HAVING the idea of a site fee signals an oddly narrow direction at Amazon.com. Here the company is suing Barnes & Noble over use of a one-click credit card registration retrieval that every other company on the Net will figure out one day. (Yes, Amazon has a patent for its version, but critics say the U.S. Patent office - like so many of us - doesn't "get" the Internet and shouldn't have issued it in the first place.)
So a national boycott of Amazon.com is underway by users who call accuse the company of using its 1-Click technology as a monopoly and its lawsuit against B&N as "an attack against the World Wide Web and e-commerce in general." Maybe the boycott won't get anywhere, but it won't make the "customer-centric" Amazon look good, either.
Nor does Amazon's battle over 1-Click appear promising. "Many industry watchers say it's unlikely Amazon will be able to prevent competitors from using similar technology," reports the Wall Street Journal.
The whole thing makes Amazon look like greedy, petty, even tyrannical - quite the opposite of its hip and snazzy ahead-of-its-time attraction to stockholders and users alike.
"Amazon was once a company that embraced the happy calculus of the 'network effect' - the ability the Internet has to multiply the value of everyone's contribution to it, whether you are a book buyer writing a review on Amazon's sites, a bookselling partner in Amazon's co-op program or an investor in the company's stock," writes Scott Rosenberg of Salon.
"The 1-Click patent suits suggest that the company is forsaking this understanding for a more conventional, bare-knuckles corporate strategy. But the more control Amazon tries to seize, the more likely it is that Bezos will face a groundswell of popular resistance from the Net's free-spirited quarters."
It's as if Amazon.com got tired of offering anything - including its bestseller list and book recommendations, you remember - for free. Responding a bit testily, Bill Curry of Amazon.com told the Wall Street Journal: "It's ironic that people would call for a boycott to support companies that have brought no innovation to the market."
Translation: You owe us, all you Internet consumers out there, and don't you forget it.
BARNES & NOBLE'S BIG DISTRACTION
Boy, it's intriguing to see Barnes & Noble cozy up to Microsoft in a partnership that further makes the chain bookstore a repository of nontraditional books.
As Publishers Weekly reported yesterday, Barnesandnoble.com will soon make a Microsoft tool called the Microsoft Reader available to the public and thereby "enable thousands of electronic books to be consumed" from their screens to yours at less than the cost of a trade paperback for each.
Good one, B&N! With the Microsoft Reader and your other venture into electronic books - the self-published kind from iUniverse - you've beaten Amazon.com to the punch! Spending millions on plotzing yourself down in the ebook arena is one of those great distractions from improving systems and inventories of traditional books inside brick-and-mortar stores.
No doubt the day of hand-held electronic books is coming. But traditional books, like traditional newspapers and magazines, and traditional movies in movie theaters, and traditional classrooms with actual human beans as teachers, are not going away in the face of snazzy technology.
We're Americans, and we want it all, all the time. We want all versions of the same product, and we want all stores, from neighborhoods to the Internet, to serve us. Thank heaven independent bookstores are here for us, have opened their doors to us, and collectively stock a wider range and variety of books than we'll ever find in any of Barnes & Noble's highly promoted new partnerships.
Dear Holt Uncensored:
It used to be that if I were given a gift certificate to a chain bookstore (by someone who obviously didn't know me very well), I could simply use the certificate to buy the least expensive thing in the store, then receive the remainder of the certificate in cash. I could then spend the cash at a local independent bookstore.
Recently, I received a Borders "Gift Card." According to the brochure sent with this card, unused balances are not redeemable for cash. Is there any way around this, short of buying a book, then returning it for store credit, which could then be converted to cash in the manner described above? As I break out in hives whenever coming within range of a chain, I'd rather not have to make several trips. I've considered just donating the thing to my favorite bookstore. What do you advise?
Holt responds: I must say it never occurred to me that one should get as much cash out of a gift certificate as possible from a chain store, and now that they appear to be wise to the likes of you, I I think you have the most fantastic idea - give the gift certificate to an independent bookstore and let the owner either spend it or tear it up! If I were an independent bookseller I would sure get teary if a customer like you came in with a little gift like that.
I asked Hut Landon, bookseller and director of the Northern California Independent Booksellers Association, what he would think about the matter.
Hut Landon replies: If I received a gift certificate from a customer, I would happily trot down to the chain and buy books, making sure that I included at least one for that customer. But it begs the larger question of how to stop friends from giving friends chain certificates -- maybe we as independents could create a sticker saying "No chains, please" that folks could put on their holiday cards.
Dear Holt Uncensored:
I've seen the same thing as Carla Jimenez did - Amazon pricing "unpriced" books at $10 to $20 above what Ingram lists them at. I first thought maybe it was a mistake, then I realized it was a pattern involving limited interest, high priced art, architecture and coffee table books.
The Mystery Bookstore
Dear Holt Uncensored,
I enjoyed your comments about What'shisname, the founder of Amazon.com, and his elevation by Time magazine. But your reference to "the most significant story of the decade - the steep decline and unbelievable comeback of independent bookstores," called for qualification. The "most significant story of the decade in the world of retailing?" or perhaps " -- in the world of publishing?"
When I think of "the most significant story of the decade," the fall of Soviet communism and the end of the Cold War come immediately to mind. There could certainly be other nominees.
Mary Joan O'Connell
A Word With You -- Editing and Proofreading
Dear Holt Uncensored:
Jim Cotton's comments about "standard publishing practice" [regarding agents and publishers who charge reading fees] are heartfelt but ignore the dynamic that created "industry standards" in the first place. New writers are terribly susceptible to scams and flim-flam artists. Years ago, so called literary agents rooked people out of lots of money by telling them they "might be publishable" and would read their work for a fee. The "derivative techno fiction" poured in....and the agents were rolling in dough...without the writers being anywhere near publishable.
If Jim Cotton gets so much stuff he can't read it without charging a fee, he needs to tell folks to use a literary agent OR he needs to hire out the reading.
Paying to have material read at a publishing house makes writers think they have a better chance of being published--even if you tell them it doesn't. Did you ever return Publisher's Clearing House Sweepstakes without subscribing to a magazine even when they said it didn't affect your chance of winning?
It is unethical to take reading fees from people who are novices in the literary world. In the real world it's called taking candy from a baby, and just because you want the candy and you can do it, doesn't make it right.
At Northwest Literary we read everything that comes through the door, and we write comments on it. We do NOT charge for it. Yes it's a pain, yes it's time consuming...it's also PART OF THE JOB.
In the immortal words of Tom Hanks in "A League of Their Own," "It's supposed to be hard; it's the hard that makes it great. If it was easy, everyone would do it."
Dear Holt Uncensored,
Regarding the proposal (in #116) to not tax book purchases as a means of promoting reading, I wanted to pass along that this is a practice in many European countries, not so much to promote reading as to help support the publishing industry, especially small presses that must compete with large houses.
I wonder (but do not know) whether removing taxes from book sales would be a boost to independent booksellers. Is it too optimistic to propose tax abatements to help small independent booksellers survive so that they might continue to offer the many special qualities to communities and to publishing that the megastores and chains do not? From the beginning of my career, independent booksellers have made a difference in hand-selling my books to readers who might find them congenial or meaningful.
Independent booksellers are about quality of life in many ways: for readers, for communities, for authors, for publishers, and perhaps in the fight to preserve them, quality of life (as opposed to monopolies and issues of unfair business practice) must be emphasized. Corporations do not care about small competitors, but politicians do care about votes.