Holt Uncensored

Holt Uncensored


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by Pat Holt

Friday, May 31, 2002


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And what a treasure to choose from! Granted, most of these examples are more tragic than funny, but that's the way it is in the book biz. When it comes to gallows humor, you just have to laugh.


Did you hear about this: In the fight against anthrax at the Library of Congress, irradiation procedures have been *melting* submissions for copyright "into a jellyfish-like mass," fusing photographs onto cover sheets, rendering unplayable videotapes of oral history and crinkling letters and manuscripts "beyond recognition."

So reports Johanna Neuman at the Los Angeles Times in a story that tells us, "the process of zapping the mail is so intense - postal officials originally used an irradiation level 25 times greater than that used to kill bacteria on beef - that letters routinely arrive yellowed, crinkled and sometimes burned beyond recognition."

The reason for such extreme measures? Well, the Library of Congress is "connected by tunnel to the House and Senate ventilation systems" so the mere possibility of an anthrax dust mote finding its way up the nostril of Tom Daschle or the hatch of Orrin is too frightening to bear.

Even when the Library of Congress cranked the irradiation thermostat "down to a mere 10 times the normal zap, the mail is being cooked at temperatures as great as 170 degrees, and damage is noticeable."

The piece also describes 12 tractor-trailers of mail waiting to be delivered, the "3 million pieces of mail [that] are missing" and - irony of ironies - the ruined CDs of interviews with witnesses to 9/11.


That New York Times story about former Penguin Putnam chief Phyllis Grann complaining to friends that she's bored in her new role at Random House made the front page of the business section, proving again that the inbred nature of New York publishing can always make gossip more hilarious than news.

Heads of Random House imprints are pouting, reports NYT writer David Kirkpatrick, because ever since Grann arrived, they've been made to "feel like they should pay deference to her," and bless their P&L statements, they're not going to.

Peter Olson, head of Random House and the man who hired her, has made it clear that his respect for Grann transcends this kind of pettiness. If you doubt that, here's the proof Kirkpatrick has dug up after extensive research:

"When Mr. Olson married the internet entrepreneur Candice Carpenter last September, Ms. Grann was the only person from a competing publisher who attended the wedding."

There you have it. Kirkpatrick does not say that Grann brought her own hand-dipped bonbons for the bride, probably because he could not document the allegation. But references to Grann's expanding "behind the scenes" role hint of a secret recipe for Apple Brown Betty that may further empower her "corporate advisory position."


Did I miss this story in the American press or did it just not get reported?

This is that CBS News anchor Dan Rather was interviewed in England on Newsnight, a BBC program, and said that "the US media [has stopped] asking tough questions of the Bush administration since 11 September" because of a "climate of extraordinary patriotism."

Wasn't Rather one of the first after 9/11 to argue that the White House should be given a great deal of latitude by the press?

Well now, according to BBC News online, he says that "fear of offending the politicians 'keeps journalists from asking the toughest of the tough questions.' " He added, "I do not except myself from this criticism."

Rather blamed the concept of "Milatainment," meaning entertainment programs about the military, including such shows as "Military Diaries," "American Fighter Pilot" and "Profiles from the Front Line."

Milatainment is produced with the co-operation of the Department of Defense, "which is offering documentary makers unprecedented access" to the war in Afghanistan, according to Madeleine Holt (no relation) of the BBC.

In one "reality TV" news shows, the producer "was allowed to hand out 80 digital cameras to service personnel to record their feelings for broadcast," she writes. This kind of "combat footage" is the "real thing," says the producer, though he acknowledges that "anytime you can put a human face on a soldier or sailor or a marine - I guess that's to the benefit of the Department of Defense."

Rather argues that "What you see in a movie or a made-for-TV reality series is not war. It's somebody's glamourised view of war." In terms of reporting the facts, he says, "there has never been an American war, small or large, in which access has been so limited as this one."

Okay, Rather's protest ain't exactly a knee slapper in this list of The Month's Best Laughs, but it sure rates high on the Complicity Monitor when it comes to figuring out just how much American journalists help the government keep the lid on "tough questions."

Rather still contends that "I would willingly die for my country at a moment's notice and on the command of my president." But as for doing his job as a journalist, he also says: "It's unpatriotic not to stand up, look them [the president and his advisors] in the eye and ask the questions they don't want to hear."

Attaboy, Dan! Be sure and tell us when you start doing this!


You've surely heard this one recently, but who can believe it? Bank One and its subsidiary, American National Bank, seized $1.2 million belonging to 85 independent publishers who were *not* customers of the bank and had *not* borrowed money from them, and a month later the banks were ready to do it again.

The reason for the theft - I mean withdrawal (well, why pussyfoot around? Greg Bates of Common Courage Press called it a "mugging" in Laura Flanders column at WorkingForChange.com, and that sounds about right) - is that all 85 publishers were distributed by LPC Group, which did have a loan from Bank One and was *not* behind on its payments.

The laughable part - well,the jaw-dropping part - is that Bank One and American National Bank had decided LPC was a bad credit risk, so they simply took LPC's latest deposit and kept it for a loan payment.

According to one of the publishers - See Sharp Press - the bank was "essentially asking publishers to pony up for its own bad business choices." (LPC later filed for bankruptcy, but in a letter to its clients stated that the filing was precipitated by a dispute with the very bank that had seized the funds.)

But the unfunny part is that Bank One and American National Bank may get away with it. The 85 publishers, it turns out, had not filed forms to state governments that would have "perfected the consignment." The fact that they didn't know about LPC's loan "and had no way of knowing it was about to be made," as See Sharp contends,is irrelevant, say the banks, the meanies.

As Greg Bates of Common Courage Press put it, "Sucking money belonging to others out of an account is reprehensible. It's as if a traveler momentarily set down his luggage in an airport. A stranger, who is owed money by the airport, walks up and grabs the luggage, claiming it as partial payment for the airport's luggage because the traveler failed to attach a name tag to his possessions.

"Contrary to the bank's view, even a five-year-old can tell you who rightfully owns what."


You remember that Amazon.com has been interfering with sales of new books by running ads to sell used books on the same webpage. The Author's Guild sent a letter asking its members to remove links to Amazon.com to protest "Amazon's practice [which] does damage to the publishing industry, decreasing royalty payments to authors and profits to publishers."

In response, Amazon.com founder Jeff Bezos wrote one of his classic huh? statements explaining why used books sales do not hurt the sales of new books.

"In fact, the opposite has happened," he said. "Offering customers a lower-priced option causes them to visit our site more frequently, which in turn leads to higher sales of new books while encouraging customers to try authors and genres they may not have otherwise tried."

Translation: If you're an author or publisher, don't worry: Offering used copies of your book for sale "in turn leads to higher sales of new books" - not just of *your* book.


I thought I had seen everything in chain bookstore ploys to extract money from publishers. But Borders has issued its now-famous, fall-off-your-chair-in-astonishment invitation for publishers to become "Captains" in managing their own "product" within various categories of the store.

The very assignment of the word "Captain" might generate a tiny smirk in the lips of even the most devoted Borders fans. But when it turns out that the idea of "Captains" of Category Management was inspired by a former grocery bagger who became president of the Albertson's grocery chain, where the happy soup "captains" and popcorn "captains" and prepackaged frozen drumstick "captains" called their product troops to muster with each and every tag sale of each and every day, one can't help but wonder if someone upstairs isn't havink leetle jok on buk industry.

After all, this ain't no two-for-one sale. Borders requires participating publishers to pay $110,000 simply to enter the program, and $5,000 for each company representative to attend the grocery-turned-cockamamie school at Borders. At this school students don't learn about sales of books but rather the *feelings* about those sales as displayed by those always-reliable monitors, focus groups, exit interviews and customer polls.

Let's remember that similar programs - Random House's Automatic Title Plan, and Simon & Schuster's SIP (am I right that this means Selected Inventory Plan?) have been "helping" booksellers manage categories for some time. So have the time-honored backlist inventory checks that sales reps have been conducting for decades.

But Borders' No Time for Sergeants Plan is the latest pressure on publishers to pay obscene amounts of money to chain bookstores for "market research" already known to both. The idea would verge on farce if it weren't for the fact that publishers like Random House are actually taking Borders up on it.

And what will they learn? According to the Wall Street Journal: "Although book retailers closely monitor their sales and know exactly which titles are selling, Borders believes more market research could answer other questions: which books are bought on impulse; which categories may sell better if jacket covers are facing outward;what types of books should be grouped together."

Gosh, that's so hard. Ask any independent bookseller about the above and you'll get a definite opinion: They tend to know their customers' buying habits because they *don't* focus-group 'em to death.

And ask any Borders employee about these questions and they, too, will probably know: The question isn't "how much space should be allocated to each category; whether books should be configured by author, by subject, by age" - the question is, rather, how to make up a list of new reasons for charging publishers more money than under-the-table discounts ever yielded in the old days. And ain't that hilarious.



Dear Holt Uncensored: >From my home in San Francisco, I often visit family in Iowa City, where I never fail to stop and shop at Prairie Lights, one of the nation's pre-eminent independent bookstores. Thus I was disgusted to read about the Amazon.com link on Iowa's official state website http://www.iowa.gov. In her letter to HoltUncensored #322, Susan Walker of the Upper Midwest Bookseller's Association stated that, "We think that someone setting up the website created this link, not necessarily amazon.com itself. We don't know if they are an affiliate, though."

I immediately emailed my objections to the Iowa webmaster, urging a link to Prairie Lights (or any other Iowa-owned independent) instead. Here's the reply I received from Richard J. Varn, CIO, State of Iowa, and ITD Director:

"You may not have heard, but the State of Iowa, like the State of California, is broke. Prairie Lights does not have a paying click through partnership program to help us fund our digital government efforts. We will be adding advertising space on the site to allow any company like Prairie Lights to advertise on the home page. Why are we doing this? Our web site is moving toward being self supporting. This is because the Iowa legislature has refused to adequately fund our digital government efforts (even when we had money). They have now cut ALL of our funding for application development and infrastructure including ALL funding for cyber security and homeland cyber defense. In addition, they cut our operating budget by over one-third. We can shut down the web site or find ways to make money to pay for it. Those are my choices unless and until Iowans change the leadership of the legislature or the legislature chooses to lead."

Bitter choices, indeed.

I have no idea what Amazon's "paying click through partnership" actually pays to the State of Iowa (if anything), or whether Jeff Bezos simply forwards a percentage of each book sale to the treasury (needless to say, he doesn't pay Iowa sales, payroll, and property taxes, the way Prairie Lights has for decades). Nor do I have any concept of what a similar partnership might cost bookstores like Prairie Lights. But isn't it comforting to know that small independents will soon be allowed to *buy* advertising on a website that's already crowned by a giant Amazon banner at the top of the page?

Blair Moser

Dear Holt Uncensored:

Regarding the letter from Susan Walker of UMBA: The levels of irony and silliness of an official state website being linked to Amazon.com - or frankly ANY commercial site - are just too much. I would suggest that the webmaster of the site be contacted - that information is located at the bottom of the site.

However, I must say that this comment: "We think that someone setting up the website created this link, not necessarily amazon.com itself." does not reflect well upon your correspondent. The implication seems to be that somehow Amazon inserted itself onto the web page. I don't think so. & to even present such a red herring is just unjustified Amazon bashing (in this case) and reflects poorly on the correspondent. Amazon can be accused of many, many things, but to imply that somehow they hacked the Iowa site and inserted their link . . . sorry, that's just plain silly,

Michael Walsh

Dear Holt Uncensored:

I love the story about That Bookstore in Blytheville, Arkansas. Do they sell online? It would be nice to patronize them though I am in California!

Lou Judson

Holt responds: I can't believe I forgot to put the store's terrific website in the article. It's http://www.tbib.com/NASApp/store/Index.jsp. I must say part of the fun of visiting the online store from far away is keeping an eye on up-and-coming (and well-known) writers, especially from the South, whom Mary Gay Shipley has also invited to appear in her store. Given her caveat that no book she loves is for everyone, it's exciting to participate in the adventure That Bookstore launches every time a new book hits the spin rack of staff picks or ushers in a new author event.

Lou Judson replies: Thanks - and a friendly little website it is! It's easy to find your way around; they'll tell you what they like, and what's going on... And I'll just bet there's a story behind that big blue Cadillac pictured in front of the store!

Dear Holt Uncensored:

I hardly know where to begin in answering the letter of Len Riggio, Chairman of Barnes & Noble, Inc., who complains that the "personal attacks" on him and the "sanctimonious" writings in your column are "vengeful" and "threatening," that “destroy and defame.”

In that wonderful old volume, "How to Lie with Statistics,” the author points out that “there are lies, damned lies and statistics.”

I won't here call Mr. Riggio a liar. No, not even a damned liar. But I will point out that from what I have learned from the publicly-filed documents in our lawsuit, the statistics and other facts developed from an examination of some 1,000,000 documents subpoenaed by our attorneys from his company in a four-year effort would seem to point out that he is in error.

Simple arithmetic may also suffice in determining that no publisher can afford to give away a 49% discount from its list price plus 7% for advertising plus another 10% in "slotting allowances" plus 3% in shipping allowances plus 2% and more for extra-lengthy terms, plus a percent or so in various other areas, including "settlements" of disputed claims, automatic deductions for purported shortages (not identified), special rebates, special extra discounts, special "deals" involving large write-downs, "incentive" payments for buying more books and/or returning fewer books, special cash discounts, special shipping arrangements involving costly carton marking (and involving special "penalties" to be paid by those publishers who "violate" the complicated shipping terms imposed by B&N) — and still afford to accept in returns some 30% to 75% of all books purchased (many of which books are simply pulped or sold off at tiny and unprofitable prices for the publishers). These benefits are solicited and provided in secret, not available to the independent booksellers or even known by them, and Barnes & Noble does not for the most part even dispute that it receives them, that they are clearly discriminatory or that they are a part of their cost "price."

Barnes & Noble has for many years employed a large staff of "negotiators" to deal with the publishers in attempts to obtain higher discounts and more extensive free services (which staff works only for better terms for B&N and not for any other competing bookselling companies or for the betterment of the entire industry).

Barnes & Noble is making purchases at an effective discount from "suggested list price" of 60% to 70% or more. Average discount for our — now defunct — bookselling company was for many years just about exactly 42% in our audited statements).

I would here hazard a guess that any publisher faced with the demands to cough up all these special benefits — or face losing purchases from a very large customer — would find a way to do as much as possible. The easy arithmetic comes in here: The only way to come up with all those funds is to raise the "suggested list" price of the book, and the fact that book prices have risen by some 50% since the introduction of the book "superstores" (while sales have been flat) would tend to confirm that this has happened.

Higher prices mean fewer sales — ask anybody. But — and here's the big catch — if your company is getting an across-the-board 70% discount it can afford to give away 30% or so in discounts to customers and still make healthy profits from operations. Of course the competitors who are not being given these benefits must, in order to compete, either offer discounts at a loss or lose business and customers (in the short run) and suffer from unprofitable operations, no matter how good their selections or efficient their business practices. If the competitors fail, the succeeding booksellers can charge anything they decide to charge. Hell, they can even go into the publishing business and get their books at printers' pricing, especially if they print only books in the public domain, and say "What a good boy am I!" in doing so.

Some of the large competitors of B&N have also claimed some of these secret and discriminatory extra benefits, but few independents have had the "buying power" to do so. Our evidence shows that these benefits are in no way "cost justified" or validated by a "meeting competition" defense, as we allege in the papers filed with the Court, and are therefore clearly illegal. It seems clear that these secret benefits have played a large part in the demise of nearly 4,000 independent bookshops -- over 600 just last year -- illegal or not. In any event, they are clearly arguable as illegal, but none of the B&N financial documents show any detail regarding these benefits. If our facts are correct, B&N is "earning" nearly $1 billion each year (about 30% of its income) from these discriminatory rebates, fees, allowances and other benefits (some 100 different examples of special "negotiated" benefits) and amount to more than ten times its bottom-line net profits. It's once again fairly easy arithmetic to see that without these extra gains B&N would be losing over $800 million each year -- so much money that in a year or two that it would not be able to operate, much less expand, and would certainly not be moving into European operations and publishing.

I don't view any of this exposition as "sanctimonious." I would suggest that Mr. Riggio view our federal price-discrimination lawsuit as a legal way to stop the damaging discrimination in bookselling. If it's "threatening" to him, so be it. No "vengeance," just fact. Let the Court make the legal decisions and let the jury bring the verdict.

Emotional? Sure I am. We and our customers and friends lost 150 good booksellers and nine wonderful stores which were running at record levels and growing at over $1 million each year — before 22 superstores landed in our immediate market area (several of them across the street from our shops). And we lost a wonderful friend who lost his bookshop when we failed, and was unable to repay his loans (backed by the home and farm of his parents) and who drove down to the beach, rented a room and took his own life. Whatever the "cause," whoever — if anyone — is to be blamed, I get emotional about all that.

If Mr. Riggio is unaware of the facts or would like to see the papers, he should get in touch with attorney Carl Person in New York or go to his website at http://www.lawmall.com/bookcase. We don't propose to create "animus" or "hatred" in these efforts. We do propose to get even.

Wallace Kuralt

Holt Uncensored provides this forum for the free and uncensored exchange of thoughts and ideas from writers of all callings. The opinions expressed here are not necessarily those of Pat Holt or the Northern California Independent Booksellers Association.

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