Tuesday, July 13, 2004

Online used-book sales concern some publishers
Bob Tedeschi, NYT Tuesday, July 13, 2004

Is Amazon.com becoming the Napster of the book business?

The analogy may not be far-fetched, some observers of the used-book industry say. Publishers, particularly textbook publishers, have long countered used-book sales by churning out new editions every couple of years. But the Web, particularly sites like Amazon and eBay, has given millions of consumers an easy way to find used books cheaply - often for less than $1 - without paying royalty fees to publishers or authors.

Mass-market publishers are not certain the used-book phenomenon is a problem worth addressing, but others in the industry have made up their minds.

"We think it's not good for the industry and it has an effect, but we can't measure it," said Paul Aiken, executive director of Authors Guild, a trade group. "There have always been used-book sales, but it's always been a background-noise sort of thing. Now it's right there next to the new book on Amazon."

Lorraine Shanley, a principal at Market Partners International, a publishing consultant, said that the industry was just starting to appreciate the dimensions of the problem.

"Used books are to consumer books as Napster was to the music industry," she said. "The question becomes, 'How does the book industry address its used-book problem?' There aren't any easy answers, especially as no one is breaking any laws here."

Shanley, whose company reported on used books this month in its newsletter, said that publishers were beginning to see the effects of online sales.

Greg Greeley, Amazon's vice president for media products for North America and Japan, strenuously disagreed with the notion that online sales of used books harmed the publishing industry. And Kathryn Blough, vice president of the Association of American Publishers, said that she "wouldn't jump to the conclusion" that used books were "eating away at the new-book market."

The publishers' association reported previously that sales of mass-market paperbacks and hardcover and paperback books last year were virtually unchanged from 2002, when they reached roughly $3.5 billion.

Amazon has listed used books alongside new books since late 2000. But analysts and industry executives said the momentum among consumers and newly minted used-book sellers was just now approaching the point of biting into new-book sales.

"We've not been able to pinpoint a definite effect, but my gut is that absolutely there's an effect," said Dominique Raccah, chief executive of the publisher Sourcebooks. "And it concerns me that we're not formalizing a reasonable, proactive response."

The industry's response so far has been to consider a study on the effects of the used-book market. But in the meantime, some research already suggests that used-book purchases are surging.

Based on consumer surveys, Ipsos BookTrends, a division of the research and consulting firm Ipsos-Insight, said that 15 percent of all books for adults and teenagers that were purchased from April to December 2003 were used ones - an increase of five percentage points from the like period in 2002. At the same time, the Web's share of sales rose to 12.7 percent from 9.7 percent.

Greeley, the Amazon executive, declined to cite statistics on the company's used-book effort, but he said sales had been growing nicely since Amazon started listing used books alongside new books and offering to sell its customers' used books for a 15 percent commission.

Greeley disputed the contention that Amazon could be hurting publishers or authors by selling books that yielded no royalties. "The lower prices of used books allow people to experiment with authors and genres in ways they might not have otherwise," he said.

But Albert Greco, a professor at Fordham University's graduate school of business administration who conducts research for the Book Industry Study Group, said he was "absolutely convinced" that used-book sales would "ultimately cut into an industry that's not growing at all."

IHT: Online used-book sales concern some publishers

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