WH Smith, one of the most powerful and prevalent bookstore chains in the United Kingdom, has shocked the book world by signing a contract promising it will sell only travel guide books published by Penguin in its some 460 shops.
From now on, no other guide books will be sold at WH Smith, despite the fact that it's often the only bookstore permitted to operate at countless train stations and airports.
That means any company that publishes a guide book offering an alternative view will now be shut out. No more Lonely Planet, no more Time Out, no more Fodor's, no more Frommer's, Berlitz, Brandt, or Michelin.
As the Daily Telegraph points out, this new deal is bad for consumers, and it sets an alarming precedent. Rough Guides, a dying Penguin imprint, offers about 80 titles, while Lonely Planet, which is now banished, has about 500. Penguin's diminishing market share is a big reason it was desperate enough to cut this deal.
A bookstore is in the information business, which means it's in the business of sharing ideas. Anyone who values the exchange of ideas should be alarmed to see exclusivity contracts creep onto the shelves of a bookstore. There's a difference between corporate windfall and profit that's earned in the marketplace.
At WH Smith, the market will no longer be truly tested. The new market at WH Smith is where a book publisher can be the highest bidder at backroom meetings, not which books sell best on the shelves. WH Smith is a sellout.
Competitive edge can end up wounding customers. It can even be anti-competitive. It's not as if customers can simply go to the bookstore next door instead. The chain has also signed an exclusive agreement to be the sole bookstore operating at seven of Britain's biggest airports, including Heathrow and Gatwick.
These exclusivity deals should disturb anyone who sees a future in which the information of their choice can be available at their neighborhood store. They certainly disturb me; I write three guide books, which is probably the only way I even noticed this dismaying development, which will probably slip past many people. And bit by bit, piece by piece, consumers lose a little bit more freedom and a little bit more choice.
It's as if the grocery store in your town said it would only sell Pepsi, or if you had to go to Best Buy to purchase Disney products and order from Amazon if you wanted something from Warner Bros. Exclusivity and enforced fragmentation is a lousy precedent to set in a free market, and it's especially unsavory considering it's coming from the publishing industry.
Typically, WH Smith tried spinning the deal by saying it would make browsing "easier for the customer." I'll bet they tried that one in communist Soviet Union, too, where there was one type of bread.
Unsurprisingly, calls for boycotts are growing in the U.K., but given the fact that WH Smith has a lock on airport and train station business and can survive on magazine and snack sales, the effect may be minimal.
I propose a new law: Any store that has signed an exclusivity agreement to be the sole operator at a public resource such as an airport should not be permitted to deliberately freeze out any manufacturer in sub-exclusivity agreements. For the good of the customer, the market should decide.
What if your supermarket refused to sell Coke, or Best Buy only sold Disney DVDs?