Money turns many pages

Reluctant Capitalists

November 2, 2006

When HMV, which owns Waterstone's, announced its intention to take over rival book chain Ottakar's last September, there was an outcry of opposition from publishers, authors and small book retailers who were convinced that it would lead to further deterioration in a bookselling culture already under siege. Many people must have wondered why it should matter whether the store from which we buy our books is owned by one chain rather than another. But to those with a stake in the world of book publishing, this latest twist in the retail story is only the most recent chapter in an extended process of change that has transformed the landscape of bookselling.

Laura Miller has told this story in more detail and with greater historical depth than anyone else. For those who want to understand what has happened to bookselling in recent decades, Reluctant Capitalists is the indispensable starting point.

Miller's guiding theme is the rise of large retailers in the world of bookselling and its impact on independent booksellers. From the entry of department stores such as Macy's into bookselling in the late 19th and early 20th centuries, through the rise of the mall bookstore chains in the 1960s and 1970s, to the emergence of the book superstore chains in the 1980s and 1990s, bookselling has proved to be an attractive domain for large retailers using discounting, product placement and other mass-marketing techniques to increase sales. These developments were not altogether pernicious: they revolutionised the book distribution system and greatly increased availability. But these gains came at a cost. The main casualty was the independent bookseller. As the superstore chains were rolled out across the US in the 1990s, the market share of the independents declined sharply and many were forced out of business. In 1991, independents accounted for about a third of all adult books sold in the US; by 1997 this had plummeted to 17 per cent. In the course of the 1990s, four out of ten independent bookstores were forced to close.

The independents fought back, attacking what they saw as the bland uniformity and homogenisation of the book superstores and redefining themselves as an integral part of the local communities they served. They also mounted a legal challenge to what they alleged to be the favoured terms offered by publishers to the superstore chains, a challenge that resulted in several out-of-court settlements in the 1990s and led to a standardisation of publishers' discounts in the US. However, the struggle between the independents and the chains is only part of the story, and one of the limitations of Miller's book is that it gives relatively little attention to other key aspects of the changing retail landscape.

The rise of internet booksellers such as Amazon is discussed but is largely peripheral to Miller's account; so, too, is the growing importance of general retailers in recent years. Also missing is a detailed analysis of the economics of bookselling and of what is probably the most costly problem facing the distribution side of the business - the problem of returns. Unlike other retail sectors, the publishing industry is practically alone in allowing retailers to return unsold stock for full credit against future orders.

More troubling, perhaps, is that we do not get a clear sense as to why the dominance of chains and large retailers should matter. We can answer this only if we look more carefully at the decision-making practices of these different retailers and at the implications of their decisions for publishers. Deciding which books to stock and in what quantity is a judgment call, and the problem with the rise of the superstore chains is that these judgment calls are being concentrated in fewer hands. Moreover, the superstores depend on a steady flow of fast-selling bestsellers. The major publishing houses adapt their strategies to sign up and produce the kinds of books they think the superstores will be able to sell.

This is why the demise of independent booksellers and small chains should be a source of concern to anyone who believes that good books are an essential part of a vibrant culture: it matters because it further concentrates power in the hands of a small number of gatekeepers whose decisions have far-reaching consequences for the kinds of books likely to feature in our public life.

John B. Thompson is professor of sociology, Cambridge University.

Reluctant Capitalists: Bookselling and the Culture of Consumption

Author - Laura J. Miller
Publisher - University of Chicago Press
Pages - 316
Price - £22.50
ISBN - 0 226 52590 2

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