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Entering a chain bookstore in a Chicago suburb, the first thing a shopper sees is a display table stacked with classics: ”The Red Badge of Courage,”

”The Yearling,” ”Ivanhoe,” and a half-dozen others, all impressively packaged in leatherette. Across the street, another bookseller has a conspicuous rack devoted to such favorites as ”The Jungle Book” and

”Gulliver`s Travels.” These are not classic books, however, but classic movies, and, along with Julia Child, Jane Fonda and the Velveteen Rabbit, they signal the arrival of the video revolution in the nation`s bookstores.

Videocassettes started showing up on bookstore shelves a year ago, and, according to most sources, they have yet to have any measurable impact. In itself, though, the appearance of videotapes in bookstores is anachronistic enough: By almost any measure, economic or cultural, video would appear to be a mortal enemy of books and reading, to say nothing of literacy in general. Not only do videocassettes compete for a customer`s time and money, they commmand precious space in the stores, displacing books from crowded shelves. For the moment, though, none of the above seems to present any grave problem for booksellers. ”Hypothetically, it does make sense that $20 spent on a videotape is $20 that won`t be spent on a book,” acknowledges Bill Edwards, vice president of new business development for B. Dalton, which has aggressively plugged into the video market. ”Also, the two hours that it takes to watch a movie could be spent reading a book.”

However logical it may sound, that theory hasn`t worked out in practice, insists Edwards, who says that ”popularly priced prerecorded tapes are very compatible with our book business. In fact, we`re having a much better year in book sales than last.”

Even so, with videocassettes still such a novelty item in bookstores, it may be premature to draw any conclusions–a case of too little, too early. As yet, none of the major bookstore chains, whether B. Dalton, Crown Books, Waldenbooks or Kroch`s & Brentano`s, has turned over any significant space to video products, though they are usually positioned so that the customer can`t miss them. ”Any time you put merchandise in the store that`s not part of the main line,” says Edwards, ”you have to put it up front, to let the consumer know it`s there. You`ve got to make it clear that you`re in the business.”

At Kroch`s, which has entered the field much more circumspectly than many of its competitors, videocassettes have been assigned, on a test basis, to an ”electronic boutique” with audio products and computer software, says William McCarthy, executive vice president. ”Primarily, we feel our business is book retailing, and we`re looking on these as sidelines. We`re making room for them while trying not to take away from book space.”

If video follows the pattern of audio in Kroch stores, customer acceptance will come, but gradually. And not before the price of videotapes comes down to the level of hardcover books. At $400, the five videotapes that make up ”The Jewel in the Crown” hardly qualify as an ”impulse purchase”; nor can they compete with the one-volume edition of the books on which the Masterpiece Theater series was based, Paul Scott`s ”Raj Quartet,” priced at $25. And even the most luxurious gift books cost less than the double-cassette version of ”Gone with the Wind” ($90) or ”Ghostbusters” ($80).

Nonetheless, these are becoming exceptions that disprove the rule; from all the evidence, videocassettes are getting more competitive all the time. Where the fixed price of video movies was about $80 a few years ago, the going rate now is in the neighborhood of $30. The MGM classics, which include ”The Adventures of Huckleberry Finn” and ”Treasure Island,” are $25 each. And at $20, Crown Publishing`s ”Movie Classics”–among them, ”Meet John Doe,” ”Made for Each Other,” and ”His Girl Friday”–are only a little more

(and in the case of James Michener`s latest book, ”Texas,” a little less)

than an average hardcover. Discounted by Crown Books (no relation) to $15, they become highly competitive.

With a further decrease in the price of videocassettes (as well as an inevitable increase in the price of books), it`s seems safe to assume that all things will soon be equal. In which case, at least one crucial question remains: Will people be as willing to buy tapes from bookstores as they have to rent them from video shops? Booksellers should have a preliminary idea of whether there`s a buyer`s as well as a renter`s market by late this year, when the results begin to come in from Christmas receipts.

At that time, booksellers should also have an early indication of the impact, good or bad, videotapes have on book sales. Will they steal directly from book revenues? Or will they, as merchants pray, create more bookstore traffic and sell more books? For the present, booksellers can consider the deleterious effect video rentals may be having on paperback sales at the supermarkets, discount houses and drugstores serviced by the Charles Levy Circulating Co., the Midwest`s largest distributor of paperbacks, magazines and videotapes.

”We have to be careful in creating a cause-and-effect relationship,”

says Levy president David Moscow, ”but we do know, because we`re the only company in the area that distributes both products, that paperback sales are going down and video sales and rentals are going up. Since prerecorded movies provide an inexpensive alternative to reading at home, it may follow that the sales drop in paperbacks is attributable in part to their availability.

”There`s no consumer research to prove that this is in fact the case. But you figure it out,” Moscow says. ”About $3 billion will be spent this year on video software. That money doesn`t just get invented; it`s got to be coming from somewhere. I think some of it may be coming from the paperback market, though I don`t have evidence to support the case.”

Like booksellers, many major publishers are moving into video, though with extreme caution; this is based, at least in part, on their experience with the software book ”explosion,” which managed to burn many publishers before it fizzled out. Among the publishers getting into video, the more aggressive may be Simon & Schuster–possibly because it lost millions in royalties by failing to hang onto the videotape rights to the Jane Fonda workouts.

To head its audio/video division, S&S recruited Valeri Cade from Clairol, where she was director of marketing. ”I`ve spent the last year and a half studying what other people have done,” says Cade, ”and I haven`t seen much I thought was terrific, that used the medium in a way that would make the consumer want to buy the product.”

As the company`s first video original, Cade has produced ”The American Cancer Society`s `Freshstart:` 21 Days to Stop Smoking,” a step-by-step instructional tape, which Cade calls ”a product that is uniquely video publishing. It is not television. Most people are putting out videos that are more like television than anything else. You can get television for free, so why buy it?”

Nonetheless, S&S is not ignoring TV. The company has acquired video rights to ”The Jewel in the Crown” and assorted other British TV imports, such as ”Staying On,” also based on a Paul Scott novel; ”The Adventures of Sherlock Holmes”; and, most appropriately perhaps, ”The Road to 1984,” a dramatization of George Orwell`s life.

Because it`s such an ultra-commercial publisher, Simon & Schuster seems right at home in the video field. But more exclusively literary publishers are getting into the game as well: Random House with an animated version of ”The Velveteen Rabbit,” narrated by Meryl Streep; and its corporate cousin, the prestigious house of Knopf, with Julia Child`s ”The Way to Cook,” a six-hour home video course that is, according to vice president and associate publisher Jane B. Friedman, ”truly revolutionary.”

Like so many others in publishing and bookselling, Friedman doesn`t think video fallout will have any ill effects on the market for books, or on the nation`s reading habits. ”I think books will last,” she says. ”These other areas, video and audio, are supplements to book publishing, and they will all flourish.”

These are sentiments widely echoed both in bookstores and publishing houses. ”It`s not a burning issue in the book business,” says Harvey Plotnick, president of Contemporary Books, one of Chicago`s largest publishers and a distributor of videocassettes to sporting goods stores and specialty shops. ”I`ve never heard people talk of video being a threat. They talk more about the opportunities.”

For Plotnick, it is not just a question of peaceful coexistence; the relationship between books and videocassettes may be mutually beneficial. He cites trade studies that indicate ”active people, including people who watch TV more than average, tend to read more books. . . . Right now, if you spend four hours in front of your TV, statistically you`ll spend more time reading than the guy who watches for only two hours. You ask, `My God, when are these people sleeping?` People who are interested and enthusiastic about things find the time to do it. If you get interested in something, whether it`s through video or some other way, you tend to have a thirst to learn more, and so you`ll buy more books.”

Yet it`s difficult to regard the opinions of publishers and booksellers without some skepticism, since they–or the ones who have added video to their inventories–would seem to have the least to lose. What about those who have the most to lose? Besides hardcore readers, they would seem to be the authors of books; but if video has inspired any widespread fear and trembling among them, they have yet to be recorded.

Ray Bradbury, for one, whose visionary writings might make him more wary than most authors, thinks we have little cause for alarm. ”Every 15 or 20 years, there`s some kind of revolution and everybody panics, saying it`s the end of the book business. But that never turns out to be true. The doomsayers are always wrong. There`s plenty of room for everybody.”

One of the ”doomsayers”–or disbelievers–is Neil Postman, a New York University communications professor whose new book, ”Amusing Ourselves to Death,” considers the harmful effects of TV. He maintains that the video infiltration of bookstores represents ”a very substantial assault on literate culture. People who say it won`t have an effect on reading are wrong. But I don`t know that videocassettes are the point. Television is the point, and videocassettes merely make television more dominant than it otherwise might be. If new technologies extend that influence, it will continue to move typography to the edges of our culture, and keep visual images at the center.”

The case against videocassettes–as well as television in general–is even more strenuously argued by Jonathan Kozol, author of ”Illiterate America,” who says: ”I`m convinced that they will lower the incentive of people to do the difficult work of reading, and it will also deny them the far greater pleasure you get from books. With 50 million people in the United States already unable to read a book, and millions more unwilling, this looks like the last nail in the coffin of American literacy.

”Good authors ask us to join them in a dialogue that transcends our mortality,” Kozol says. ”With VCRs, we cease to be an active intelligence in such a dialogue. Instead, we become passive receptacles of an adulterated version of the real thing.”

But perhaps the last–and the most foreboding–words on the subject of video versus books should go to Stuart Karl, of Karl-Lorimar Home Video. In trying to ease their apprehensions, Karl told a gathering of booksellers:

”You shouldn`t look at video as replacement of a book. It`s more like a little brother–or a big brother.” Which seems to suggest that Big Brother won`t be watching us, after all. We`ll be watching him.

WHAT TWO PROMINENT AUTHORS THINK OF VIDEO

PRO: Ray Bradbury, novelist and screenwriter, whose books include

”Something Wicked This Way Comes.”

I own a VCR, and I love watching old movies. But it hasn`t cut into my reading time. I allocate it the way I want to. I read and write all day, so at night I want to shift gears and watch a movie. It`s a real pleasure to put on ”Lawrence of Arabia.” I think a good film, whether in the theaters or on television, will encourage book buying. When the Winston Churchill series was shown on PBS, the sale of books on Church went up phenomenally. There`s no competition where excellence is involved.

VCRs are going to be wonderful, if used wisely. Portable VCRs should be of help to educators; you can carry one in one hand and a book in the other. They will provoke curiosity. And anything that is fascinating provokes you to be curious in many directions. Every 15 or 20 years, there`s some kind of revolution and everybody panics, saying it`s the end of the book business. But that never turns out to be true. Book buying goes on. There are already 40,000 copies of my new book in print. A million copies of James Michener`s

”Texas.” The doomsayers are always wrong. You`ve got to be optimistic.

CON: Jonathan Kozol, teacher and author of ”Death at an Early Age” and

”Illiterate America.”

Reading is work, and videocassettes will lower the incentive of people to do the difficult work of reading. They will also deny them the far greater pleasure you get from books. People who do not care for poetry or fiction, nonetheless do read out of necessity, to find out how to manage certain daily operations–cooking, home repair, self-help of any sort. How-to videocassettes bypass the need for reading altogether. They present a quick fix.

In serious literature, reading compels us to engage the author one to one, as if he`s an intimate companion; the intimacy evaporates when it is mediated by technology. The video version of a serious novel is, above all, a condensation. It gives us the illusion that we have encountered William Styron or Jack London, when in fact, we haven`t the least idea of what the author meant to say. Millions of Americans are going to grow up with the incorrect impression that they know Dickens or Twain, Hemingway or Faulkner. They won`t. They won`t have the slightest notion of what they intended.