4-Year Effort To Collect Data On Book Sales Is a Step Closer

By DAVID D. KIRKPATRICK

Published: June 18, 2001

Book sales figures -- the crucial element in best-seller lists and in the reputations of authors and publishers -- have always been an extremely hard-to-determine, closely guarded secret. 

Which is exactly how some people in the book industry like it, especially publishers that have overpaid for books that bomb and authors and agents seeking new contracts after a history of lackluster sales. 

But in the next few months, that veil may be lifted.  Bookscan, a unit of the company that tracks the music industry's retail sales, appears at a turning point in its four-year effort to build a system for disseminating sales information collected at the cash registers of bookstores nationwide. 

In addition to ending the custom of publishers and authors dissembling about less-than-stellar sales, Bookscan could challenge established best-seller lists, which are based on statistical samples rather than a numerical count.  Its system would help publishers sharpen marketing tactics and sales forecasts, just as its cousin Soundscan did in the music industry.  In turn, that could help reduce the number of unsold books returned from stores. 

Bookscan, which is part of the media company VNU of the Netherlands, was expected to announce today that it has reached an agreement to pay the Borders Group for sales data from its Borders and Waldenbooks stores, collected through the book company's computerized inventory system and entered into Bookscan's database each week.  Bookscan quietly started a similar arrangement last year with the other major chain, Barnes & Noble and its Web sibling, Barnesandnoble.com.  As a result, publishers will now pay Bookscan to obtain information about the sales of their books at the two giant chains, information they previously obtained free, albeit in a less convenient form.  Bookscan delivers Barnes & Noble sales figures through a subscription-only Web site. 

More important, Bookscan now has the sales figures of both major chains in its database.  The company has already pieced together deals to track book sales at the Costco Wholesale Corporation, Target and several smaller chains and independent stores.  In all, Bookscan executives say, the company will record more than half the book sales in the United States. 

Bookscan pays the retailers for their data on a sliding scale according to sales volume.  Almost every bookstore uses some form of inventory management software that tracks sales, and Bookscan transfers weekly electronic sales reports from those systems to its own.  Bookscan then bundles the information in its combined database, which will be accessible over the Internet for an annual fee. 

In the next few weeks, Bookscan's executives will meet with the major publishers to pitch a new version of its service.  Subscribers will be able to analyze sales of any book from any publisher by title, genre, location of sales and type of store.  Bookscan will also report each major publisher's share of the market. 

Bookscan plans to charge the largest publishers hundreds of thousands of dollars a year, with lower fees for smaller houses.  Each of the major publishers now pays about $75,000 a year for access to the specialized, smaller version of Bookscan's Web site that provides information about each house's titles only at Barnes & Noble's stores, which make up about 20 percent of the market. 

Eventually, if Bookscan succeeds in signing up enough bookstores, the company hopes to make additional revenue by licensing best-seller lists to newspapers and magazines, as Soundscan licenses charts to Billboard magazine. 

The price of access to the proposed industrywide system has not been set, and negotiations with publishers are expected to be tough.  Some publishers said they feared that Book scan could develop a monopoly on essential information about the book market and then raise its prices. 

In response, Michael Shalett, Bookscan's co-founder, said the company would offer long-term contracts as a safeguard.  He said that Bookscan planned to spend more than 30 percent of its revenue to buy data from bookstores. 

Though wary of the possible costs, several publishers said signing both Barnes & Noble and Borders made Bookscan's plan hard to turn down. 

Richard Heffernan, president for hardcover and children's sales at the Penguin Putnam division of Pearson P.L.C. of Britain, said the chains' refusal to participate was the main stumbling block when Mr. Shalett first approached publishers four years ago. 

''We were duly impressed by the whole thing, we were very big on it,'' Mr. Heffernan said, ''but Barnes & Noble and Borders shut them down.'' 

Bookscan is also in talks with the American Booksellers Association to obtain its help in collecting sales figures from its 3,000 independent members.  Oren Teicher, the organization's chief operating officer, said the group was eager to participate, in part for the money, but also to bolster the organization's own best-seller list. 

Mr. Teicher said the remaining obstacle was the technical issue of translating data from the roughly half-dozen computer systems that independent stores use.  But Mr. Shalett of Bookscan dismissed the problem, noting the company overcame similar obstacles at music retailers.