Amazon.com criticized over payments for placement
(Reuters 02/08 19:40:49)
By Martin Wolk
SEATTLE, Feb 8 (Reuters) - Internet retailing giant
Amazon.com Inc. <AMZN.O> came under fire Monday after the
disclosure that publishers are paying up to $10,000 to have
their books featured on some of the most coveted real estate on
the Internet.
The Seattle-based company defended its actions, saying it
employs a staff of editors who make decisions "completely
independent" of any so-called cooperative advertising payments
made by publishers.
"Our basic practice is to recommend only those books we
feel are worthy of it," Amazon.com spokesman Bill Curry said.
"Our editors are free to reject books that are proposed for
co-op -- and do it every day."
But revelations that the company is seeking as much as
$10,000 from publishers for featured treatment of certain books
drew sharp criticism from rivals, consumer advocates and
independent booksellers.
"I'm disturbed by it," said Richard Howorth, owner of
Square Books in Oxford, Miss., and president of the American
Booksellers Association. "Ethically, it's a pretty shady way to
sell books, in my view."
The issue of cooperative payments, which are commonplace
throughout the retail industry, is a particularly touchy one in
the publishing industry because of concern about the increasing
concentration of power in a small number of publishers and
retailers.
"What we're really tremendously afraid of is that a reading
society and democracy is jeopardized by narrowing of the
distribution of ideas," Howorth said.
On the sales side, a trend that began in the early 1990s
with the rise of "big box" bookstores is accelerating now with
the emergence of online booksellers including Amazon.com, which
likely will sell more than $1 billion worth of books this year
in a flat U.S. market.
Industry analysts said that while some bookstores accept
payments to feature books in their windows or other
high-visibility locations, online retailers are different in
part because they have created an appearance of editorial
independence.
"Particularly Amazon, with the editorial voice they've
developed and the relationship with their customers they've
developed, should be diligent not to blur the line between
editorial voice and shelf-space purchases," said Ken Cassar, an
analyst with Jupiter Communications. "There needs to be a
Chinese wall between the editorial voice and marketing."
That may be a lot to ask from what is, after all, a
retailer. But he and others also noted that Amazon.com, which
carries far more titles than even the biggest physical store,
has made it a point to work with the smallest publishers to
carry obscure titles.
Amazon.com declined to comment on the exact terms of its
agreements with publishers, including a report in the New York
Times that the prices range up to $10,000 for a premium package
including feature coverage in the "Destined for Greatness"
category.
"We stand behind every recommendation -- every one of
them," said Curry, who added that the overwhelming majority of
books featured on its home page do not benefit from co-op
payments. "If any reader feels he was duped by a recommendation
he can send the book back for a full refund."
One executive of a large publisher, who declined to be
identified, said Amazon.com refused to accept payments to
promote books that did not fit its standards.
"I'm not sure anybody is particularly surprised or
particularly outraged" by the news about payments, the
executive said.
But barnesandnoble.com, the online affiliate of Barnes &
Noble Inc. and Bertelsmann AG, was quick to claim the moral
high ground as its rival suffered from the bad publicity.
"Our editorial content is not for sale," said Ben Boyd,
spokesman for barnesandnoble.com. "We would never sell a space
on our recommended area. ... When we tell (customers) we
recommend a book, it's not a reflection of a price tag
associated with our opinions."
Boyd said barnesandnoble.com accepted payments from
publishers but tried to make the association clear by promoting
the selected books in special "boutique" sections.
"We make crystal clear the difference between what is our
opinion and what is paid for," he said.
((--Seattle bureau, 206 386-4848, marty.wolk@reuters.com))
REUTERS |
