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Barnes & Noble's Jekyll and Hyde

"If you are trying to take a big position on a book and you can't get the chains to support you, you really have a problem," says Morgan Entrekin, publisher of Grove/Atlantic. "But I tell you, it is going to be very hard to get publishers to speak frankly about this. Whatever we say about the chains or the independents, somebody we have to do business with is not going to like it."

Privately, many publishers complain in more colorful terms about Barnes & Noble's growing clout, and their resentment has focused with particular venom on an arrangement known as cooperative advertising. ("Blackmail" says one editor; "whorehouse work," says another.) Since the seventies, mall-based chain bookstores and a handful of big independents have charged publishers complicated fees to include their titles in catalogues, to place their books in prominent store locations, or to feature the titles in advertisements. In the nineties, when Barnes & Noble and Borders began to roll out superstores across the country, cooperative advertising became big news.

Publishers began leaking to reporters Barnes & Noble's marketing-program price lists, and prices were eye-catching. Today prices run as high as $18,000 to place a title in Barnes & Noble newspaper ads across the country. Placement in a New York Times ad and on a prominent store table for two weeks can cost as much as $10,000. But most serious or literary books are usually backed by less than $15,000 for author tours, advertisements, and all other publicity.

Riggio dismisses the gripes out of hand. "The creeps should never give that stuff out," he says. "It is just the publishers blaming us as a scapegoat when they feel the pinch of their own inept business practices. Nobody is bribing us."

He insists that publishers don't pay for placement, because Barnes & Noble picks the books to promote, albeit in consultation with the publishers. The charges come out of a pool based on an extra 3 or 4 percent discount off the wholesale book price from each publisher, and the retailer accounts for the money later.

The struggling independents have taken their case to the courts. In 1994, the independent store owners' American Booksellers Association sued several of the biggest publishers for providing unfair subsidies to the chains, and the publishers settled by agreeing to make "co-op money" equally available to single stores and chains. The ABA is now suing Barnes & Noble and the other superstore chains, alleging that they find ways to skirt the law, squeezing publishers for financial perks like better payment terms and lower delivery costs.

Riggio vehemently denies the ABA's charges, noting that the same co-op deals and discounts are available to every store and that the basic terms haven't changed in years. "We have to have a lawyer in the room whenever we talk to a publisher!" he says. The superstores' advantage, according to Riggio, is in spreading their overhead over more sales, not in gouging publishers. Every bookstore has to employ book buyers, but Barnes & Noble can hire one central staff to fill its 520 superstores. Economies in advertising costs are an even bigger advantage. Small stores can't afford to pay as much as $40,000 for a full-page ad in a big-city paper, but superstores can, especially if several are clustered together in the same media market.

But to others, those economies of scale are exactly what is dangerous about the superstores: Decisions about how many copies to stock, which titles to advertise, and where to place books in stores are inevitably more centralized than ever before. "The books that are on the shortlist are on the shortlist everywhere," says Cornell University economist Robert Frank, author of The Winner-Take-All Society. "That puts a lot of pressure toward concentrating sales on a smaller number of titles, and the vastness of the stores makes the issue of where the book is displayed even more important." The superstores have applied to the book business a dynamic now common in markets for movies and music too, he says. The few titles that "break out" soar higher than ever, but the rest fall behind.