Nader, Authors to Borders CEO: Don't Limit Access to Books, Ideas

[Gary Ruskin]

Commercial Alert			June 26, 2002

1) PLEASE NOMINATE COMMERCIAL ALERT FOR WORKING ASSETS FINANCIAL SUPPORT

Working Assets customers can nominate organizations to receive funding
in 2003.  Write and mail your nomination for Commercial Alert to receive
funding in 2003 by Saturday June 29, 2002, to: Working Assets/Donations
Manager; 101 Market Street, Suite 700 San Francisco, CA 94105.  Call
Marnie Glickman, Commercial Alert's development director, at
503.235.8012 if you have any questions.  If you have time, please email
her a copy of your nomination letter to
<mailto:marnie@commercialalert.org>.
	
2)  NADER, AUTHORS TO BORDERS CEO: DON'T LIMIT ACCESS TO BOOKS, IDEAS

Ralph Nader, Commercial Alert and 26 authors and scholars sent a letter
today to Borders Group CEO Gregory P. Josefowicz, asking him to
reconsider his "category management" plan which will likely reduce the
range of ideas in print and put small publishers out of business.  The
letter follows.

Dear Mr. Josefowicz:

There is a difference between books and pop-tarts.  It should not be
necessary to point this out to a man who sells books, but apparently it
is. According to press reports, you plan to embrace the grocery
industry's practice of "category management," so that publishers -- not
you the bookseller but publishers -- will manage the offerings on your
shelves.

We urge you to reconsider.  Borders is not Albertson's.  Such pop-tart
marketing likely will slash the range of book titles and ideas available
to the public.  It will jeopardize smaller presses; and worst of all, it
will further strengthen the hand of publishing conglomerates that have
too much power already.

According to the May 20, 2002 Wall Street Journal, you have devised 250
categories for books, each to be captained by a publishing firm.  These
firms will pay you a large annual fee -- in excess of $110,000 according
to the Journal -- which will be hard for most small and medium-sized
publishers to muster.  In return, the "captains" will be able to decide
which books you carry, how many are bought, and where they are placed.
Although you say you will keep final authority over book-buying, Borders
will be an agent of the publishers rather than of its customers.

Under your plans, smaller publishers will be at a big disadvantage,
since each publisher-captain will be able to deploy your shelf space to
its own advantage.  In categories rich in small press titles, the
publisher-captain will be able to cut the number of titles in the
category, and fill the category with its own titles.

Denied shelf space in a major outlet like Borders, smaller publishing
houses will be hard pressed to survive.  The Kremlin would have found it
difficult to invent a more subtle and effective way of suppressing
original viewpoints and ideas.

Books are not just another consumer product.  They form much of our
society's repository of ideas; they are the bloodstream for the life of
the mind.  You have a responsibility to serve as well as to gain, for
your books have the protection of the First Amendment.  If you were not
ready to accept this responsibility, then we cannot imagine why you
would have entered the book business to begin with.  There are many
other things to sell.
									
We wonder, how do you understand your role in regards to your readers,
and those of future generations?  In your view, how many titles are "too
many titles" to lose?  By what measure will you decide whether your
plans have cost the public too much in terms of access to ideas?  What
steps will you take to ensure that diverse choices are lost because of
your "category management" plans?

The Borders Group is the nation's second largest book retailer.  It has
more than 1,190 bookstores in all 50 states, which operate under both
the Borders and Wadenbooks names. You are in a unique position to
maintain a high standard for book sellers throughout the country.

Once large outlets replace a sense of exploration by patrons with
formulaic categories, the location takes on a distaste, a sense of being
manipulated and homogenized by absentee category marketers instead of
being served by a bookstore in a community.

Please leave "category management" to the soap merchants.  You have
undertaken a higher calling, one to which we hope that you are equal.

Sincerely,

Peter Barnes, co-founder, Working Assets; author, Who Owns the Sky?
Greg Bates, Publisher, Common Courage Press
David Bollier, author, Silent Theft: The Private Plunder of our Common
Wealth
James Boyle, Professor, Duke Law School; author, Shamans, Software and
Spleens
Liane Casten, author, Breast Cancer: Poisons, Profits and Prevention
Noam Chomsky, Professor of Linguistics, Massachusetts Institute of
Technology
Jeff Cohen, co-author, Wizards of Media Oz and Adventures in Medialand
Richard B. Du Boff, Samuel and Etta Wexler Professor of Economics
Emeritus, Bryn Mawr College
Paul Duguid, co-author, The Social Life of Information
Laura Flanders, author, Real Majority, Media Minority: The Costs of
Sidelining Women in Reporting
Edward S. Herman, Professor, Wharton School, University of Pennsylvania
Lewis Hyde, Thomas Professor of Creative Writing, Kenyon College
Sut Jhally, Founder and Executive Director, The Media Education
Foundation
Naomi Klein, author, No Logo
David Korten, author, When Corporations Rule the World
Saul Landau, Senior Fellow, Institute for Policy Studies; author, Red
Hot Radio
Mike Males, author, Smoked: Why Joe Camel is Still Smiling
Bob McCannon, Executive Director, New Mexico Media Literacy Project
Mark Crispin Miller, Professor of Media Ecology, New York University
Ralph Nader
Jonathan Rowe, Contributing Editor, Washington Monthly
Marcus Raskin, Co-founder, Institute for Policy Studies
Gary Ruskin, Executive Director, Commercial Alert
Marta Russell, author, Beyond Ramps: Disability at the End of the Social
Contract
Juliet Schor, Professor of Sociology, Boston College
Jonathan Tasini, President, National Writers Union (UAW Local 1981)
Robert Weissman, co-author, Corporate Predators; Co-director, Essential
Action
Mark Zepezauer, co-author, Take the Rich Off Welfare

<-----letter ends here--------->
A copy of the letter is available in .pdf format at
<http://www.commercialalert.org/PDFs/borders.pdf>

Following is an article in the May 20, 2002 Wall Street Journal about
Borders and its "category management" plan. 

Borders Sets Out to Make Book Business Businesslike
By Jeffrey A. Trachtenberg 

NEW YORK -- Is selling books like selling frozen food?

Borders Group Inc., the country's second-largest book retailer, has told
leading book publishers it intends to transform the cozy, age-old buying
relationship that has determined what books are placed on shelves and in
what quantities.

Eager to boost sales, Borders says it will emphasize market research, a
discipline largely shunned by an industry that prizes creativity as much
as profit. Book editors buy manuscripts largely on the basis of personal
taste; and unless an author has a track record, books are sold to the
chains largely on faith and buzz. Now Borders will begin aggressively
using such techniques as focus groups, exit interviews and polling --
and ask publishers to help pay the freight.

Borders's new tactic is known as category management, which started in
the grocery business in the late 1980s. The plan calls for Borders to
choose publishers to co-manage each of 250 categories, ranging from
thrillers to sports, based on their expertise. These "captains" will be
involved in determining which titles will be carried, the number of
titles, and how those books will be displayed. In return, they will help
pay for market research. Category captains are expected to influence
which books will be chosen in their discipline, but Borders itself has
the final say on which books will be purchased.

"This is an industry that can use some shaking up," says Gregory
Josefowicz, Borders's 49-year-old chairman and chief executive. As a
16-year-old, Mr. Josefowicz bagged groceries at what is now Albertson's
Inc.'s Jewel/Osco Division, a food and drug chain, and stayed for 22
years, learning about category management firsthand. He rose to
president before resigning in 1999 to join Borders as president and
chief executive.

Although book retailers closely monitor their sales and know exactly
which titles are selling, Borders believes more market research could
answer other questions: which books are bought on impulse; which
categories may sell better if jacket covers are facing outward; what
types of books should be grouped together.

Borders will also rethink where sections are located in its stores; how
much space should be allocated to each category; whether books should be
configured by author, by subject, by age; and what is stocked. Other
issues: Will stores be heavy on bestsellers, or do they need key books
in, say Native American herbal medicine? And how will the chain
emphasize variety instead of duplication? Pricing, too, is up for grabs.

One of the major determinants of what books a retailer will stock is the
huge promotional dollars publishers pay for window and other in-store
displays. But there could be trouble if market research suggests readers
aren't interested in those books.

"There's a conflict between making money buying books, and making money
selling books," says Donald Stuart, a partner in Cannondale Associates
Inc., a consulting firm in Wilton, Conn. "There are a lot of incentives
for buying in quantity and then promoting in the store. And those
short-term incentives can hurt what is best for the category." Borders
executives agree, saying they plan to focus more on reader needs.

Borders's major competitor will be watching. "Mr. Josefowicz is a
serious guy," says Leonard Riggio, chairman of Barnes & Noble Inc., the
country's largest book retailer. "He's bringing some of his experiences
in the supermarket business to bear, and maybe he's onto something."

Other booksellers are more skeptical. Richard Howorth, the owner of
Square Books in Oxford, Miss., says the book industry has rejected other
efforts to apply retail science. "A book is a unique product, and every
new title presents new challenges," he says. "This isn't the same as
selling prescription drugs or screwdrivers."

The plan promises to be expensive for publishers, who say that Borders
is charging about $5,000 per publishing employee to explain how the new
process works. Dozens of publishing employees have recently paid up and
flown to Borders headquarters in Ann Arbor, Mich., to learn about the
program. Borders declined to discuss the fees, saying the information is
proprietary. In addition, category managers are expected to pay about
$110,000 annually to help defray the initial costs of marketing research
associated with the program, publishers added.

What's in it for publishers? A seat at the table where the major
decisions are being made. While category managers can't pick all of
their titles, they will have the opportunity to shape a department that
resembles their lists. A spokesman for Borders says that all publishers
will share the benefits of the market research.

Still, some publishers view the strategy as simply a way for Borders to
get publishers' money. Others question the premise that category
managers can be neutral. Speaking to the latter, Larry Schulsinger, a
vice president of Management Ventures Inc., an advisory group in
Cambridge, Mass., says: "Most suppliers will say the reason that they've
been picked by Borders is because they dominate the category, so they'll
play by the rules. Otherwise the noncategory captains will mutiny."

So far, Borders has chosen category leaders in three publishing areas.
HarperCollins Publishers Inc., the book publishing arm of Rupert
Murdoch's News Corp., has been picked to head the cooking and romance
categories, while Random House, a unit of Germany's Bertelsmann AG, has
been selected to lead the early-readers category, ages four to seven
years old. A Random House spokesman declined to comment on the
publisher's relationship with Borders.

Josh Marwell, a senior vice president of sales at HarperCollins
Publishers, describes the new process as "intellectually interesting"
and says it should lead to identifying consumer trends. "Say a store has
a travel department in which 60% of the books are aimed at international
travel, and 40% domestic," he says. "If research shows more shoppers are
traveling domestically, then the mix is wrong. Hopefully, this will
work."

In the cooking category, Borders has already learned from exit
interviews and phone interviews that an estimated 25% of the books sold
are being given as gifts.

<------article ends here--------->

WHAT YOU CAN DO TO HELP:
1) Tell Borders that you strongly oppose their "category management"
plan, and that you want them to protect small publishers and access to a
broad range of ideas.  You can email to Borders CEO Greg Josefowicz via
his executive assistant, Kathy Brown, at
<mailto:kbrown@bordersgroupinc.com>.  The fax is 734.477.1901 and the
phone is 734.477.1100 (press 0 and ask for the office of Mr. Greg
Josefowicz.)

2) Avoid buying books at Borders or Waldenbooks until Borders rejects
its "category management" plans.


Commercial Alert's mission is to keep the commercial culture within its
proper sphere, and to prevent it from exploiting children and subverting
the higher values of family, community, environmental integrity and
democracy. For more information, see Commercial Alert's website at
<http://www.commercialalert.org>.

Commercial Alert's materials are distributed electronically via our
mailing list <commercial-alert@lists.essential.org>. To sign up for our
email list, go to
<http://lists.essential.org/mailman/listinfo/commercial-alert> 
or send a blank message to <mailto:subscribe@commercialalert.org>. 
Subscribers receive 1-2 emails per week.

This note is posted at:
<http://lists.essential.org/pipermail/commercial-alert/2002/000115.html>.

PLEASE DISTRIBUTE WIDELY
-- 
To sign up for Commercial Alert's email list, go to
<http://lists.essential.org/mailman/listinfo/commercial-alert> 
or send a blank message to
<mailto:subscribe@commercialalert.org>.  
Subscribers receive 1-2 emails per week.

Gary Ruskin | gary@commercialalert.org 
Commercial Alert | http://www.commercialalert.org/
Congressional Accountability Project |
http://www.congressproject.org/
phone: 503.235.8012 | fax: 503.235.5073