With the battle for display space more furious than ever, Penguin is upping the stakes with a plan that rewards stores for making a significant commitment to its books. The program, which was quietly launched three years ago and is getting a new push now, ties discounts on frontlist titles to a store's pledge to carrying and marketing the publisher's books. If a store commits to stocking a "good amount" of Penguin titles and agrees to 10 displays per year "in prime selling space," it receives an extra 1% discount on all titles published within the last year. Stores need to make a three-year commitment and must agree to promote both adult and children's titles.

To some small publishers, the move by one of the country's largest publishers seems like yet another sales obstacle on a road already scattered with them. "The net effect is going to be less exposure for small houses," said Beau Friedlander, publisher of Context Books.

Other observers worry that a program like this does an end-run around laws requiring non-discriminatory pricing. "It kind of seems like another one of those loopholes. How many bookstores can really afford to do this?" said one industry insider.

But Penguin is in fact encouraging independent booksellers to join the program, said the company's head of sales, Dick Heffernan. As for concerns about small publishers, he said the idea is not to displace other books but to create a plan that will market titles in a different way than co-op. Unlike a traditional co-op plan, the goal here is to increase sales not just on the promoted titles but, because money will be given in the form of additional discounts, for other books, too. "There are a lot of great Penguin and DK books, and this is a supplemental program we think can help," Heffernan said, adding that stores "will have wide latitude" in determining which titles to showcase. The company emphasized it is not cutting back on co-op dollars.

The move comes as publishers worry that an increasing amount of valuable floor space at Barnes & Noble may be given to the company's own titles. Heffernan said this "is not being done in response [to B&N's moves]," though he added, "Of course we're not happy if anybody, including Barnes & Noble, gives more space to promoting their proprietary titles." B&N signed up for the plan when it launched three years ago. Penguin said it has not yet heard from the chain on whether it will renew its commitment.