Book Prices and the Canadian Publisher’s Dilemma

Posted 9 January, 2008 in Publishing |

Arguably the biggest homegrown publishing story in 2007 had to do with the pricing of books in the wake of the surging Canadian dollar against the American greenback.

When the Canadian dollar hit parity last September, consumer grumblings about the price differentials between Canadian- and American-produced books began to reach a fever pitch and publishers started scrambling to redress the issue. In late October, Penguin Group Canada announced a plan to sell U.S. books in Canada at prices as close to par as possible. HarperCollins Canada began restickering books to close the price gap, and Random House Canada announced a rebate to booksellers who discounted their cover prices in-store.

Meanwhile, on the retail side, independent booksellers like Ottawa’s Collected Works began offering books at American prices, despite the loss to their bottom line that this policy was expected to take. Indigo, Canada’s largest bookseller chain, offered free shipping on online orders greater than $39.00, and deep discounts in-store (blithely ignoring the fact that it was Indigo’s practice of deep discounting that helped put many Canadian publishers behind the fiscal eight ball in the first place, but that’s another story).

All of this may seem like good news for consumers, who will enjoy lower prices at the cash register into 2008. But it’s not good news for retailers, whose profit margins are often not significant enough to allow them to sell books at American prices, or for publishers, who still have to pay editors, book designers, typesetters, printers, sales staff, and so on.

The problem, which consumers don’t see, or don’t take into account, involves economies of scale. The Canadian market is one tenth the size of the American market. American publishers are able to set prices lower than their Canadian counterparts because what they lose in individual sales, they make up for in volume. David Davidar, the president of Penguin Group Canada, told the Bookseller that “[w]e have entered an era of significantly lower prices, with new US hard-covers priced around $27, fully $10 less than they were two years ago. However, we’ll hope to make up in volume what we have lost in terms of price.” But Canada only has a population of 33 million, so his prognostications about increased sales volume seem a tad on the overly optimistic side.

In his book, The Perilous Trade: Book Publishing in Canada, 1946-2006, Roy MacSkimming points to a 2004 survey conducted by the Canadian Publishers’ Council. “The CPC study divided respondents into ‘heavy,’ ‘moderate,’ ‘light,’ and ‘non’-buyers, finding that heavy buyers (eighty books per year) represented 23 percent of the survey population, and moderate buyers (thirty-five books per year) 24 percent. These two groupings totalled 47 percent and between them bought 71 percent of all books purchased.” What this sunny portrait elides, of course, is the salient fact that more than half the respondents claimed to buy few books each year, or none at all.

That survey is now four years gone. A more recent Ipsos Reid poll indicated that one in three Canadians didn’t read (let alone buy) a single book for pleasure in 2007. (On the upside, the survey did find that of those who did read (totalling 69 percent of the survey respondents), the average person read twenty books in the past twelve-month period.)

Still, those numbers aren’t sufficient to allow a publisher — especially a medium-sized or small Canadian-owned publisher — to price hardcover books at $25.00 (the average American hardcover price) and hope to survive. The disparity between what consumers expect and what publishers are reasonably able to weather is daunting.

It appears that, just over one week into the new year, this situation has claimed its first victim. On Monday, Raincoast announced that it was folding its publishing division. Although the cynical account has Raincoast “long barely masquerading as a Canadian publisher,” before it stopped publishing adult fiction in the fall of 2006, it was responsible for bringing us Colin McAdam’s Some Great Thing, Anosh Irani’s The Cripple and His Talismans, and Alison Pick’s The Sweet Edge, among others. It also maintained a vibrant and interesting children’s and YA program.* So its disappearance is not a moment to be trumpeted in Canadian publishing.**

It may, however, be the thin edge of the wedge for indigenous (read: not foreign-owned — this exempts you, M&S) publishers, particularly if, as is widely expected, the country slides into a recession and consumers’ discretionary income dries up. However you look at it, the best advice for Canadian publishers in 2008 seems to be a paraphrase of Margot Channing in All About Eve: fasten your seatbelts, it’s going to be a bumpy year.

*Full disclosure: as editor, I worked on a number of Raincoast books, including Adam Lewis Schroeder’s novel Empress of Asia, Nathan Sellyn’s short-story collection Indigenous Beasts, Patrick Conlon’s memoir No Need to Trouble the Heart, John Burns’s YA novel Runnerland, and John Lekich’s YA novel King of the Lost and Found, all of which I admire greatly.

**Raincoast is the Canadian publisher of the Harry Potter series, but the revenue from this endeavour was apparently kept distinct from its indigenous publishing program. Whether some of these funds should have been funnelled into the Canadian publishing program as a means of salvaging it is open to debate.

1 comment to “Book Prices and the Canadian Publisher’s Dilemma”

Panic, January 9th, 2008 at 5:24 pm:

• I can’t even comment on this stuff anymore; it’s all making me too batty. >:(

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