Battle of the Booksellers

After burying its nose in the book publishing business for more than a year, the Federal Trade Commission leaned back and issued a complaint last week that was a bestseller along U.S. Publisher's Row. The Commission charged that Doubleday & Co. and five other publishers* violated federal antimonopoly laws by allowing the book clubs to sell their books at cut-rate prices, while retailers were required to sell the same titles at fixed prices.

The FTC action was a victory for the 3,200 U.S. booksellers, who have been fighting a guerrilla war with the book clubs ever since Harry Scherman founded the Book-of-the-Month Club 25 years ago, brought cut rates and mass merchandising to the book business as well as scores of imitators. Book-of-the-Month Club leases printing plates from publishers, pays them 10% of the selling price of every book. Club editions not only undersell regular trade copies by as much as 40%, but the clubs give away many free books as "dividends."

Under the Counter. To fight the clubs, many retailers shoved the regular trade editions of book club selections under the counter, refused to recommend them to their customers. Others, like Manhattan's big Brentano's bookstore, signed up clerks as Book-of-the-Month Club members, then peddled their books to customers at regular retail prices.

But the clubs prospered. By 1950, there were 60 book clubs in the U.S., with a $100 million income, about 30% of all U.S. book sales. With 2.5 million members on their rolls, the clubs say that they have created a brand-new reading public. Says Book-of-the-Month's Scherman: "The retail bookstore--as a method of distribution in the U.S.--does not begin to do a thorough job." The clubs depend on the nation's 41,000 post offices for distribution, mail most of their books to towns under 100,000, which have few bookstores. Many a publisher reckons that book club and other reprint rights and sales to Hollywood are the only things that keep him in business.

The Same Terms. Book stores charge that cut-rate book club competition helped depress retail sales to $250 million for the last four years, while rising costs have squeezed store profits to 1/4 of 1%. The book stores' solution: force publishers to lease their plates to retailers on the same terms they give book clubs.

The publishers insist they have always been willing to do this. Said Doubleday President Douglas M. Black: "Any retailer that will bid and pay can lease plates. If any bookseller wants to start a book club there's nothing to stop him."

* The others: Harper & Brothers; Houghton Mifflin Co.; Little, Brown & Co.; Random House; Simon & Schuster.

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