Marga Schoeller Bücherstube, one of Berlin’s many renowned independent bookstores. ANITA LILLIE
Fifteen years ago, a not so subtle gentleman with an important voice—he ran the book-order department of Barnes & Noble—asked the CEO of Henry Holt to participate in a TV advertising campaign for the chain, to the tune of $50,000. The CEO, for his part, was hoping to sell lots of copies of Thomas Pynchon’s Mason & Dixon, as he’d just learned from the happy salespeople at Henry Holt that the bookseller was set to display at least 20,000 copies of that marvelous tome in stores across the country. (I know this because, at the time, I was Holt’s CEO.) And so he asked Barnes & Noble, “Would your ad refer to Pynchon’s new novel?” The reply was unequivocal: “No.” In that case, the CEO inquired, “what’s the point of Holt’s contribution?” Barnes & Noble’s response: “Well, if you can’t come up with the sum, we’d order only half as many Pynchons.” And so they did.
Perhaps they realized that Pynchon was not the mass-market author they had pinned their hopes on. Leonard Riggio, Barnes & Noble’s chair at the time, had announced at a panel that his brother Stephen (his designated successor) had started to read the book and didn’t get beyond the first fifty pages or so. It was the one time I’d ever heard the company engage in aesthetic criticism, and it served only to obfuscate B&N’s business practices.
Whatever price it may have been charging for Mason & Dixon, Barnes & Noble stuck by its decision and probably suffered a loss. At the time, its business as a bricks-and-mortar bookstore had not yet been seriously undermined by Amazon, yet both companies were already deeply entrenched in a war over a sales strategy based on an economy of discounting—selling bestsellers at a loss in order to attract customers.
Discounting has upended traditional publishing in the United States. Independent bookstores usually operate on a shoestring and have never been able to afford negative profit margins on bestsellers. During the 1990s, as the major chains expanded and bookstores—and booksellers—emerged on the Web, many independents were ruined by the downward pressure on the price of bestsellers. By discounting these books, the big chains and Amazon did to the independents what Walmart has done to mom-and-pop Main Street retailers: crush them by running a race to the bottom. But there was more collateral damage. In time, discounting also deprived American readers of the opportunity to read foreign authors of a high literary reputation because, in an aggressively commercial publishing environment, translations are often risky and expensive. In the words of a high-ranking CEO in New York, “I don’t publish manuscripts I cannot read.”
What I learned at Holt, albeit a little late, is that publishing and selling books in the United States was, and remains, a very different and far rougher business than in my home country of Germany, where since the late nineteenth century a fixed-price agreement between publishers and bookstores has defined a less competitive and highly regulated publishing market. The participants in this voluntary price cartel signed a mutual agreement: publishers set the prices on books, and bookstores abided by them. The arrangement resembled a prenuptial agreement between both sides, based on trust, notarized by a lawyer’s office and armed with expensive sanctions.