In Latest Moves, Barnes & Noble is Betting it Can Compete With Amazon

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Barnes & Noble’s most recent gambit, a refusal to sell books published by its rival Amazon, shows that the country’s largest bookstore isn’t backing down from the e-tail giant. But will it pay off?

Last week, B&N announced that it wouldn’t stock Amazon-published titles in its 700-odd stores. The massive Seattle-based  e-tailer has been expanding its publishing arm and has accelerated efforts in the past several months. By publishing books in both print and e-book versions, Amazon is attempting to bypass traditional publishers, not just traditional booksellers.

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But on Tuesday, B&N hit back. “Our decision [not to stock Amazon published titles] is based on Amazon’s continued push for exclusivity with publishers, agents and the authors they represent. These exclusives have prohibited us from offering certain e-books to our customers. Their actions have undermined the industry as a whole and have prevented millions of customers from having access to content.”

Michael Souers, an analyst at S&P’s Capital IQ, says he views the move as a way for B&N to firmly side with traditional publishers. “It’s kind of a symbolic gesture, one meant to ingratiate themselves with publishers,” Souers says. “And publishers are upset with Amazon for trying to cut them out of the process.”

So far Amazon’s Publishing branch is still in its infancy, having produced only about 120 titles last fall. But it’s growing. In addition to acquiring best-selling self-help author Timothy Ferriss, it also announced a distribution deal with Houghton Mifflin Harcourt, which will publish “all of Amazon Publishing’s New York-based imprint’s adult titles in print and distribute them in North America and outside of the Amazon.com platform.”

Amazon and B&N have been squabbling for months now over Amazon’s exclusive deals with some of its authors. B&N initially said it would not sell print versions of Amazon titles in its stores if it couldn’t also sell the e-book version.

Even without B&N, Amazon-published books could be sold by other book retailers . “If there’s enough demand for these titles, I don’t see it as a real threat,” says Souers, citing independent bookstores as one alternative retail outlet. “I don’t think it’s going to hurt Amazon at all.”

Then again, the New York Times recently wrote about an independent bookstore owner who flatly refused to carry Amazon titles. “There are no circumstances under which we would do that, none,” Vivien Jennings, owner of Rainy Day Books in Fairway, Kan., told The Times. “If Amazon wants to publish books, let Amazon sell them.” And Books-A-Million, the country’s second largest bookstore chain, followed B&N’s lead last week when it announced it would also refuse to sell Amazon-published books.

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B&N will still sell Amazon-published books on its website, bn.com, just not the physical copies in its stores. That in itself might be the wrong strategy for the struggling bookstore. Doesn’t Barnes & Noble want to keep as many people in its physical bookstores as possible, rather than driving more of them to its site?

The move by B&N will force some authors to choose between Amazon and the opportunity to have their books sold in the country’s largest bookstores. In that sense, B&N wields significant leverage against the online giant.

“Amazon can operate under cheaper prices, especially for hard-cover books,” says Souers. “But from a physical store standpoint, Barnes & Noble is still the only player in the game.”

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