,arnes & Noble is pressing Simon & Schuster for more compensation.
Barnes & Noble Snubs Publisher
BY JEFFREY A. TRACHTENBERG
Barnes & Noble Inc. has sharply reduced the number of Simon & Schuster titles it car-ries in its stores as well as the promotion it gives those books as a result of a financial dispute between the two companies, say people familiar with the matter. The dispute, which one pub-lishing executive likened to a blackout of TV channels by a ca-ble operator, reflects tensions created by the shift to digital reading and the impact of online discounting, which are shaking up publishing. The disagreement covers an array of issues. These include the question of which side will bear the financial burden of e-book discounting that has re-turned in the wake of a settle-ment between major publishers, including CBS Corp.'s Simon & Schuster, and the Justice Depart-ment of an antitrust lawsuit, the people say. Under an earlier model, publishers set the con-sumer prices of their digital books, eliminating unwanted dis-counting. Barnes & Noble is also press-ing Simon & Schuster for more compensation, such as costs as-sociated with in-store promo-tions. Publishers typically give retailers money to cover certain store marketing costs. The re-tailer is arguing that its stores serve as the primary way for consumers to discover new writ-ers, say people familiar with the situation. The retailer worries that con-sumers use its stores as "show-rooms" to find titles that they then order online at a dis-counted price, the people said. "We do not comment on spe-cific relationships with publish-ers. However, we do support those publishers who support our physical and digital busi-nesses," Barnes & Noble said. In an interview, Carolyn Reidy, chief executive of Simon & Schus-ter, described negotiations be-tween the companies as tough but said she is confident the matter will eventually be resolved. The dispute holds risks for both sides. Simon & Schuster is losing sales and promotions at the biggest book chain in the
U.S. While the retailer is still carrying the publisher's biggest books in quantity, titles by lesser-known authors have been cut sharply, said the people fa-miliar with the matter. Orders for some titles have been re-duced by as much as 90%, ac-cording to one literary agent. A recent walk-through at one of Barnes & Noble's stores in Manhattan found hard-cover edi-tions of such current Simon & Schuster best sellers as Jodi Pi-coult's novel "The Storyteller" and Clive Davis's memoir "The Soundtrack of My Life." Elsewhere, however, the pa-perback edition of veteran au-thor M.J. Rose's novel "The Book of Lost Fragrances," pub-lished in February, was out of stock and a search of the re-tailer's online site showed that the book was also unavailable at three other Manhattan locations. For Barnes & Noble, the dis-pute could cause customers who can't find the books they want to instead shop online at Ama-zon.com Inc. The dispute was reported by Publishers Weekly in late Janu-ary, shortly after Barnes & Noble curtailed its Simon & Schuster orders. At that time, the compa-nies believed they would soon resolve their differences. In-stead, the dispute has continued. The disagreement comes as readers increasingly embrace e-books. At Simon & Schuster, for example, digital-book sales rose 24% in the fourth quarter, even as total publishing revenue fell 6%. Several writers published by Simon & Schuster expressed dis-may that their books have been affected by the dispute but said they understood economic forces were involved and didn't blame the publisher or Barnes & Noble.
? Coffee-table books and other specialty titles can be a tough sell in the digital age. B4
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