NORTHERN CALIFORNIA INDEPENDENT BOOKSELLERS ASSOCIATION

HOLT UNCENSORED #120
by Pat Holt

book Friday, January 14, 2000:

OUR FIRST TOO-FUNNY-TO-BE-BELIEVED ISSUE:
ENLIGHTENED POLLSTERS STRIKE AGAIN
H.U.'S INDEPENDENT SURVEY
AOL/TIME WARNER: NOT ABOUT MONEY!
'NEW' WAYS TO GET BOOKS TO CUSTOMERS!
A WORD ABOUT BANDWAGON JOURNALISM

LETTERS

ENLIGHTENED POLLSTERS STRIKE AGAIN

I confess I didn't know whether to smirk or grimace this week when the New York Times published a story about book sales under the headline "Internet Shows Signs of Becoming Top Marketplace in the Book Business."

According to the Times, a new survey conducted by Andersen Consulting reveals that "customers are straying from the bookshelves to buy titles online, with a majority actually making more literary purchases in virtual book shops than in standard stores."

Which customers might they be? Well, "seasoned Internet users," all 541 of them. Asked about their shopping habits when they buy books, 47% said they buy books online, and 37% said they bought through traditional bookstores.

Isn't that sharp of Andersen Consulting? Its pollsters asked people who use the Internet if they buy books on the Internet. Then Andersen generalized from that answer to the population at large.

This is like asking 541 motorists if they drive to work. Chances are good they'll say yes. But does their answer apply to people who take the bus? We don't know, because nobody got on a bus and asked them.

Meanwhile, don't you think 541 is a suspiciously low number (compared to, say, Amazon.com's 12 million customers)? Granted, the views of 541 people can suggest a trend, but why not ask 541 people in a bookstore the same question?

The important outcome of even this one-sided poll is that Internet users do NOT show an overwhelming preference for buying books online. Forty-seven percent means LESS THAN HALF of the people polled buy books on the Internet.

It's much more interesting to me that a whopping 37 percent of Internet users polled, given immediate and easy access to online booksellers, say they switch their computers off and go out to brick-and-mortar stores to buy books.

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H.U.'S INDEPENDENT SURVEY

Nevertheless, a poll is a poll (and you never know if the NYT might be interested in a new one). So let's take our own advice and go into an independent bookstore where we can ask customers the same or similar questions used by a professional survey company like Andersen Consulting.

Holt Uncensored: When you decide to buy books, where do you purchase them?
Customer: Well, I'm in a bookstore as you can see, so I usually buy them here.

Q: Do you like the simulated browsing experience?
A: I don't have to simulate browsing. I just pick up a book and start reading.

Q: How do you feel about tech services here? Any trouble connecting or getting a response back in time?
A: The staff is on the premises, can you see that? They're very good at answering questions and suggesting books.

Q: Do you prefer to order through a secure server?
A: I take the book to that guy at the cash register over there and he rings up the sale.

Q: No trouble with your shopping cart, then? Do you get your purchase within 24 hours?
A: I WALK OUT WITH THE FRIGGIN' BOOK.

So there you have it, America! The poll reveals quite a robust trend, and what a headline: "Bookstores Show Signs of Becoming Top Marketplace in the Book Business." Are you interested, NYT?

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AOL/TIME WARNER: NOT ABOUT MONEY!

What a relief to hear the candid and heartfelt remarks of Gerald Levin, CEO of Time Warner, and Steve Case, chairman of America Online, explain the real reason behind the merger of their two companies.

There they were, calming an anxious public, as they chatted away on "Good Morning, America" and "The Today Show" earlier this week.

"This is not just about big business. This is not just about money," said Levin. "This is about making a better world for people because we now have the technology and the instruments to do that," said Case.

A better world! Well, who could fault a hope, a dream, a wish on a star like that?

Of course, they didn't mention specifics, but how the mind reels: Maybe every TV will have 1200 channels, each one as intelligent and challenging as those today. And we'll see many more high-quality movies like "Home Alone: XVI."

And books! You can bet there'll be even more of those tough, probing, investigative studies of big business and media-controlling monopolies once this merger goes down.

But the big hope here of course is philanthropy and education. As Reuters reported, "one of the goals, Levin said, is to plug the so-called digital divide, 'to try and make sure that ultimately those who can't afford [access to the Internet] can get it.' "

Very good, Gerald! Don't stop at a combined total of 100 million subscribers! That's chicken feed now: Get out there and sign up the rest of the world on the cable network that AOL had such a heck of a time getting access to from Time Warner and now has bought as a present to itself.

Certainly control of the media can contribute to "a better world," at least for AOL/Time Warner. The mind boggles at future prospects this loving and beloved conglomerate can offer - management of political candidates, changes in The Constitutional, unhampered development of natural resources, even . . . self-published authors! The list goes on and on.

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'NEW' WAYS TO GET GOODS TO CUSTOMERS!

Well, here's ANOTHER story that hits the funnybone, though why the august Wall Street Journal doesn't see it that way is a puzzlement.

It seems that Amazon.com and other investors are "pumping $100 million of venture capital into Kozmo.com Inc., a fast-growing company that delivers movies, snacks and other items purchased over the Internet, generally within an hour," the WSJ reported Wednesday.

Books, music and videos formed the original product base for Kosmo, we learn, and now the company "has branched out to offer everything from batteries to Tylenol and Krispy Kreme doughnuts."

It's also expanded from the original location in New York City seven months ago to operations in Seattle, San Francisco, Boston and Washington, D.C. The company will move into 21 more markets by the end of the year.

Although Kozmo isn't profitable yet, it's "become somewhat of a darling among strategists thinking about new ways to get goods to consumers," WSJ tells us.

And what is that new way? "Most of Kosmo's deliveries are carried out by an arsenal of more than 1000 messengers, most of them on bicycles."

Well, this is too futuristic for words, isn't it? Messengers on bicycles! That's how they get the Krispy Kreme to your doorstep in an hour. If indigestion shoots through the roof after you've eaten it, Kozmo can come back with the bicarb.

But thank heaven the Wall Street Journal has attended to this matter of Kosmo not making a profit. Experts have been brought in to consider the problem, and ideas have been pounded out:

"If Kosmo is to achieve profitability, analysts say, it must increase customers' average orders and create a dense enough route structure that messengers can make multiple deliveries on something approaching a door-to-door basis."

Multiple deliveries! A dense-enough route! This is where the business world excels today: Problems are thought out and answered anew. There is little or no checking to see if anybody else is doing the same thing profitably, or if history might be studied for a few tips on how to proceed.

In this case, no one apparently thought to check with independent bookstores that already use this method of delivery. For example, Cody's Books in Berkeley ( at http://www.codysbooks.com ) has been using a company called Pedal Express for years as a quick and inexpensive way to deliver books locally.

Pedal Express is a worker-owned cooperative using a fleet of custom-made "cargobikes" (take a listen, Kozmo!) that can carry enough orders to handle multiple stops and very dense delivery routes, indeed.

Calling itself the "Zero-Pollution Delivery Solution," Pedal Express at http://www.codysbooks.com/pedex/pxpage.html tips its hat to the many "carpenters, plumbers, bakers, postal workers, milkmen, brewmasters, ice cream makers, grocers, and even firemen [who] were among the common users" of cargobikes since the 1900s.

Did you know that "in 1907 the United Parcel Service (UPS) started with cargobikes"? Or that cargobikes are making such a comeback in Europe and South America that they are beginning to replace motorized delivery trucks?

That's something analysts might consider when they figure how Kozmo.com will spend $100 million to get that bicarb out on the street.

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A WORD ABOUT BANDWAGON JOURNALISM

Pedal Express is so exciting and Cody's is such an enthusiastic proponent of cheap, safe, clean "transportation that is beneficial to our community," that one can't help but wonder:

Why hasn't Cody's Books or Pedal Express become "somewhat of a darling among strategists thinking about new ways to get goods to customers," as WSJ puts it?

It's not really because nobody thought to check around. Analysts are going to discover cargobikes sooner or later.

Perhaps it's rather that Cody's is not on the Bandwagon, and following the Bandwagon, which is what journalists are paid to do these days, is what makes all the stories mentioned here apparently so "newsworthy."

Bandwagon journalism is the reason nobody sent Andersen Consulting into independent bookstores rather than onto the Internet to take a poll on people's book-buying habits.

It's the reason we get to see that chortling duo from AOL/Time Warner deliver unchallenged platitudes the day after they create the worst media monopoly in history.

It's the reason Kozmo is hot and Cody's is not. It's the reason Kosmo, with no sign of making a profit, just like its mentor Amazon.com, gets $100 million in investment money while Cody's, which makes a profit and contributes to its community because of services like Pedal Express, is seen as old-hat and left to struggle with sales as its only income.

Oh, well. We all have our heroes, don't we? To me, independent bookstores surviving the end of each day is among the most heroic acts on earth.

How about this for a headline: Independent Bookstores Will Outlive Us All. You think it's too dramatic?

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LETTERS

Dear Holt Uncensored:

You suggest that "the things that EVERYBODY AGREES really count in American life - the importance of competition, the protections of the First Amendment, the quality of literature - not only take a back seat to this unbelievably FATCAT deal, they're going to get buried in the erosion of even worse mergers to come."

Okay. Right. I was shocked by the AOL/TIME headlines, too, as well as by nytimes.com's choice to show a different picture of Steve Case and Gerald Levin every hour, all day yesterday. The only bone I have to pick with you is the idea that "everybody agrees" that the quality of literature in America "really counts."

Maybe it's just because I'm a kid and being jaded is my job, but Americans don't know what counts in America. I attend one of the most "liberal" (and expensive) colleges in this country with a group of students possessing supposedly first-rate minds and I can tell you that you'd be scared by what "really counts" to them.

The mighty crusade to rescusitate the independant bookstore and rejuvenate high-quality publishing is just as much an attempt to brainwash book-buyers as the Internet activity of Amazon.com. We're just trying to brainwash them for our idea of a better cause. It's tough to admit, but coming to terms with your own intentions opens up new avenues to change.

Let's not kid ourselves. American readers don't care; we do. That's the trouble. We've got to do all the caring for all the readers (or non-readers) that don't. It's daunting, but I guess I don't have anything better to do.

Aaron Rosenblum
Hampshire College

Dear Holt Uncensored:

The problem of the AOL-Time-Warner merger and its unhealthy impact on our society touches upon another subject which has been debated heatedly in your column: the Internet sales tax problem.

Congress has created the Advisory Commission on Electronic Commerce to make recommendations on a solution to the Internet sales tax loophole. Unfortunately the Commission is heavily stacked with Internet company representatives and politicians beholden to Internet interests. Main street businesses are unrepresented on the commission.

Robert Pittman, president of AOL, and Richard Parsons, president of Time-Warner, are both members of the Commission. This strikes me as a clear conflict of interest on a commission which seems to abound with conflicts of interest.

Perhaps now is the time for Mr. Pittman to resign and be replaced by a representative of main street business.

Andy Ross
Cody's Books

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Dear Holt Uncensored:

I read your review/ synopsis of a dawn of a new era while the Republican presidential debate was on NPR this morning, and I thought there is no way these guys are going to give the Earth a break. They live to give the rich a break. McCain may be the exception, but he's not a regular. DubYa [George W. Bush] is the regular here and doubtless will get the nomination and, groan, win the damned election. These guys, some of them, are plugged into the Cato Institute which never met a molecule it likes.

Resolved, I'll try to be more positive in the future. But thanks for your efforts toward raising the level of civilization.

Hank Haines
Murfreesboro, Tenn.

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Dear Holt Uncensored:

Is it too outrageous to imagine Jeff Bezos buying up AOL/TimeWarner in order to reach profitability?

You wrote: "Doesn't AOL founder Steve Case want to improve existing systems for his millions of customers before "adding on," so to speak? Wouldn't Time Warner like to well, publish better books, for instance? Or maybe read one or two?"

There is a clear-cut disconnect between enhancing the wealth of the stockholder and what is good/better/best for the employees and customers of publicly traded corporations. No expenditure in capital or time will be undertaken that does not increase the return on investment of the investors. All expenditures must clearly show high/exorbitant return projections or they must be foregone.

Employees and customers may be grateful for any improvements in output, but they do not declare bonuses for corporate management. (They do on occasion increase company income/net worth but rarely as much as desired.) Being very good to your customers and employees is never particularly important to absentee owners. Consistent growth in profits will always engender rewards for the management.

Kal Palnicki

Dear Holt Uncensored:

I recommend the title below for you and your readers who might wish to see history repeat itself in the predictions as to how the Internet will affect our future (e.g. world peace due to instant communication):

"The Victorian Internet : The Remarkable Story of the Telegraph and the Nineteenth Century's On-line Pioneers" by Tom Standage (Walker; 227 pages; 1998).

Glen Worley
The General Libraries
The University of Texas at Austin

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Dear Holt Uncensored:

Did you see the Letters to the Editor in this week's TIME, regarding Jeff Bezos as Man of the Year? Two are from authors saying Amazon treats them well, protecting them from mean-spirited reviews and garnering them more dollars per sale. Any comment?

Fred Sandsmark
Rocklin, California

Holt responds: Gee, I wish they hadn't mentioned that part about being "protected" from anything by Amazon.com, especially "mean-spirited" reviews. That would make Amazon.com something of a Big Brother to our authors, and I'm sure Jeff Bezos would deny ever wanting that (though secretly he may think something else). Then, too, the idea of getting "more dollars per sale" is unbearably short-sighted - independent bookstores are far more vital to the health of a book in the long run. Otherwise, though, despite a lot of fibs and criminal acts on the part of some chains and online booksellers, the charge to authors and publishers is to get their books out to the public by every means available, and I've always agreed with that. Online bookselling is here to stay, and presently Amazon.com is at the top of the heap. I'm glad for these authors if they feel they've been treated well.

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Dear Holt Uncensored:

If Barnes & Noble stores in our state take back merchandise from Barnesandnoble.com, do they not have to pay sales tax like the rest of us? How can they say they are a separate business? Their site says customers need to send returns to them, but it appears some customers are taking books back to the brick-and-mortar Barnes & Noble stores.

It is bad enough that our leaders penalize brick-and-mortar stores with a sales tax (8.1% in Spokane, Washington) while letting Internet businesses continue stealing our business and money from our communities without paying a cent [that will go] to roads, schools, parks, fire protection, police, etc. Now it appears their definition of doing business has loosened to allow companies like Barnes & Noble to have their cake and eat it too.

Shannon Ahern
Book and Game Company