The book publishers’ crisis

By Gordon Lockheed | November 9, 2010

A few months back, Jean Baird, who is a regular contributor here, conducted e-mail interviews with several Canadian publishers as part of her Booker Prize Project, trying to get to the bottom of what’s going on with the book publishing industry in Canada, and why (or whether) the “prize culture” mania that currently dominates both the publishing industry and the bookselling trade is toxic to our national literature, and to publishing and bookselling.

She interviewed Patrick Crean,  the editor-in-chief at Thomas Allen & Sons, a wholly Canadian-owned publisher which is now, given that McClelland & Stewart is controlled by Random House, arguably the most important independent Canadian publisher; Karl Siegler of Vancouver’s Talonbooks, the most prominent literary publisher on the West Coast for a couple of decades; and Rolf Maurer, long-time CEO of New Star Books, a Vancouver based and nominally left-wing “regional” publisher, which has in recent years become more involved in literary publishing.

In his interview, Crean made the following points (I’m quoting Baird’s interpretation of his remarks).

  • There are too many books being published. He was recently on the CC jury for publisher book grants and suggests we could afford to lose half the existing book publishers without any huge loss to the industry. Karl Siegler at Talonbooks agrees.
  • There’s too much emphasis on growing talent and not enough effort made to connect books to readers. The monies poured into grants to emerging writers and publishers who publish them are creating mediocrity. We have more talent than we know what to do with and not many people wanting to read the books.
  • The sales and marketing departments in the big houses want to cherry pick potential prize-winners, which results in lists with no personality. Patrick says he has never seen a time in publishing with so much risk aversion. He believes the corporate nature that has taken over is destroying book publishing.

Maurer, who was asked to respond to Crean’s points, argued, somewhat quixotically, that there is nothing “wrong” with the Canadian publishing industry; that Canada is a relatively easy market in which to produce and sell books; that what the current market is demanding is more titles, not fewer. He also seemed to think that Crean and Siegler’s call for a reduction in the number of publishers was aimed at publishers like New Star.

I agree, in generality if not always in nuance, with the points Crean made about the state of Canadian publishing. I was asked by Baird to comment on both sets of comments, of which Maurer’s have since been slightly qualified. I have some disagreement with what he had to say, which at several points seems at odds with the specifics of bookselling in 2010, and at one or two other junctures, little more than wishful thinking.

In the real world, publishers are blinking out across the country, as the radical staff reductions and “consolidations” at Random House, McClelland & Stewart, along with the closure of Key Porter, indicate. A fairly large number of small regional publishers, who have long struggled with the bottom line, seem to be falling into a progressively deeper state of crisis, although most of the evidence for this is anecdotal.

For all three publishers, there’s an 800 pound gorilla in the room. It is Chapters/Indigo, which currently holds roughly 75 percent of the Canadian retail book trade. Its trade practices, which include charging publishers for prominent retail display; placing overly large initial book orders coupled with equally large and quick returns; capricious and often messy book return procedures, have bankrupted at least one major Canadian publisher, and have made life miserable for nearly all the others for almost a decade now. Chapters/Indigo’s sheer size and its fairly exact imitation of WalMart’s competitive practices has decimated the independent bookselling sector in Canada, and has changed the way that books are sold in this country, the kinds of books that get published, and even the way that books are valued by the reading public. No country in the world has this degree of market concentration in bookselling, and while it has made the proprietor of Chapters/Indigo, Heather Reisman, much more famous and slightly more wealthy than when she entered the industry, it’s hard to find any other positives.

But Canadian publishers, whether they’re large or small, simply can’t talk about the 800 pound gorilla without risking a blacklist by the notoriously vindictive Reisman and/or the risk-averse marketing graduates who carry out Reisman’s corporate merchandising strategy. These marketing graduates, who do the book buying at Chapters/Indigo, now control not just what books get presented to readers in Canada, but also what Canadian publishers bring into the book market: if a publisher can’t get Reisman’s buyers to carry their titles, their books just aren’t going to get to readers. This situation has given an ostensible advantage to the country’s larger publishers, simply because they can finance the large print runs an artificially-large single buyer demands, and they can finance the unconscionable fees Chapters/Indigo charges for prominently displaying a book.

The virtual monopoly that Chapters/Indigo enjoys  enabled it to secure a number of competitive advantages that regularly endanger the large publishers, and have created a bizarre kind of merchandising monoculture that has sharply curtailed their publishing options. Among the advantages Chapters/Indigo (along with CostCo and Amazon) enjoy is a discount level that exceeds the one given to independent booksellers, and that has reduced the profit margins of all publishers by about 20 percent. But a much more telling advantage for Chapters/Indigo was negotiated during the liquidity crisis that ensued during Indigo’s takeover of Chapters earlier in the decade. This allowed it 110 days to pay for books instead of the 30 days that is common to independent bookstores. Under the negotiated terms, therefore, Chapters/Indigo is permitted to return books before it is obliged to pay the publishers for them, resulting in a situation in which virtually all the books in Chapters/Indigo are there on consignment, and are paid for only after they’re sold. Chapters/Indigo has manipulated this advantage mercilessly, frequently returning books that haven’t sold within the first 60-90 days, and often more swiftly than that: why pay for your stock when you can get new stock for nothing?  If a book didn’t sell immediately, Chapters/Indigo’s trade deal encouraged them to return it to the publisher and order new ones they didn’t have to pay for. That particular trade advantage has lapsed, but despite some improvements in Chapters/Indigo’s relations with publishers,  the “gotcha” attitudes built into any monopoly remain.

I’m not quite sure what Maurer’s motives are for ignoring this in his rosy description of the Canadian book market. It may be the case that he’s never had the opportunity to front-list a title with Chapters/Indigo, and is thus actually more ignorant of the situation that larger publishers like Crean’s Thomas Allen & Sons face than Crean is of the conditions under which regional publishers like Maurer’s New Star Books work, which has trouble getting its titles through the Chapters/Indigo filters at all.

Then there are other elements of Maurer’s declaration of optimism that are equally shaky. To be sure, Canada is a lovely country, and we’re all happy to be citizens. But it is a country with an indigenous literary culture under permanent threat. Canada is, along with Australia, a small player in the world’s largest and most dominant language group, and we are working in an increasingly deregulated international market system that encourages the larger players to constantly and openly attempt to destroy the smaller players by dumping in their market below cost. Maurer would be better to see cultural publishing in Canada within the WalMart model, in which the U.S. is WalMart. This tilted playing field is why cultural subsidies were introduced in the 1960s, why a cultural exemption was negotiated in the Canada/U.S and North American Free Trade Agreements, and it is why various subsidies have continued for Canadian book publishers and writers for the last 50 years. If those subsidies weren’t in place, we would have no book publishing industry in Canada, and he knows this, or ought to. Without subsidies we would have, instead, a few book distributors wholesaling books written by American and British authors, no stories about Canadians for Canadians to read, and little close analysis of our cultural, economic and political conditions.

Similarly, I’m not sure why Maurer wants to minimize the reality of Canada’s geographical distances, and, more important, its culturally dispersed populations. He must be fully aware that the cost of shipping books has quadrupled in the last 20 years, and that a package of books sent from Vancouver costs notably more if is going to Newfoundland or Toronto from Vancouver than if it’s being shipped up to the Chapters Store in, say, Kamloops. I suppose it is possible he hasn’t had that experience recently, and has simply forgotten. The postal subsidy Canadian publishers once enjoyed has been radically reduced, and it now costs nearly the equivalent of the cost of the book to ship a single book from one end of the country to the other. This situation is particularly damaging to smaller publishers, since the per-unit cost of shipping small quantities is far more expensive than it is to ship 50 or 500. Or, 5000, which is the way Chapters/Indigo would prefer to get books—even when they return 3500 of them six weeks later to help the company’s cash flow balance.

Maurer’s argument that Canada is “not particularly awash in books” and that it is middle-of-the-pack in relative terms with respect to the number of book titles published per capita is similarly specious. That he counts, somewhat vaguely, Canada’s position as somewhere in the “low 20s” of 31 countries surveyed when it comes to books authored (or was it published? He doesn’t specify) by Canadian nationals ignores the statistical nuances that ought to be established before we start high-fiving one another. We don’t know what the per capita gap is between the top ten and the bottom ten we’re in, for one, and we have no idea what kinds of books we’re talking about (Harlequin Books is a Canadian publisher) or whether we’re talking about large percentages of our current sales having been written by Lucy Maud Montgomery or the semi-late generation of authors typified by Farley Mowat.

In the same way, his argument that we’ve overproduced for years and so what? is specious in a couple of ways. It ignores the fact that the Canadian book market had far more moving parts and players, and it was generally more profitable before Chapters/Indigo and its marketing graduates gained a near-monopoly and a built-in censoring apparatus. And if someone has been, say, shooting themselves in the foot monthly for 30 years, it doesn’t really follow that continuing to do it is a good idea, or that shooting themselves every two weeks is an even better idea just because the shooter has become desensitized to the pain.

When Maurer acknowledges that “average sales per title have been in steady decline for decades,” and explains that this is “why most publishers increase their title output every year: otherwise, their sales would go down” he’s offering an unintentional look at the dynamics at work in the Canada Council’s block grant system, which gives a substantial overhead advantage to publishers who produce low word-count/print run 48 page quasi-chapbooks that are often barely edited. He’s also contributing, indirectly to the emphemerality of current book publishing, a condition that is partly a result of tax law changes which sees publishers being taxed on their backlist. That, along with Chapters/Indigo’s merchandising strategy of holding progressively fewer titles in backlist has book publishers manufacturing books the same way Maple Leaf foods manufactures those stale-dating cello-packs of pressed ham: More books, smaller print runs, shorter in-print duration. The other contributor is the prize culture that has become the primary means of merchandising books today. Along with artificially concentrating the market, it has made publishing formally unorthodox books virtually suicidal, and so they go, as Crean hints, with formulaic novels-about-sensitive-people-who-read-novels that the book-buyers are comfortable merchandising.  The problem is that most of these novels are interchangeable and boring, and progressively fewer of them are selling: once you’ve seen or read one, you’ve read them all. It’s a suicidal marketing strategy in the long run.

If Maurer (or anyone else) can find a way to put a positive spin on any of this, good luck. His own plan of going with the flow and producing more titles in smaller volumes falls apart when it arrives at the buyers at Chapters Indigo. Since the chain has sharply reduced the number of titles they carry in the last decade, most small press titles these days are simply being turned away. Maybe these extra titles he’s talking about are going to be cunningly disguised as candles or CDs of children’s inspiration music, because that’ll be his best shot at getting product into Chapters/Indigo.

Finally, Maurer’s complaint that Thomas Allen & Sons, Crean and the other larger Canadian publishers are cherry picking their talent from small publishers like New Star is both an inevitability and not nearly as cut-and-dried as he makes it out to be. First of all, writers gravitate to larger publishers voluntarily because only the large publishers can offer them the advances by which they’re supposed to make their living. It doesn’t always work well for the writers nowadays because most of the books that make it through the Chapters/Indigo marketing filters have to follow a formula, and tend towards the er, extremely conventional. Most of the books that get through the filters are being produced by graduates of the country’s Creating Writing factories, which teach their students to follow the formulae created by Chapters/Indigo fairly competently. Such writers are then sent out to operate as the 21st century cultural equivalent of piece-workers.

And as it happens, Maurer is picking on the wrong guy. Crean and Thomas Allen in particular have an unusually good record of publishing writers off the street. When Maurer cites Brian Fawcett’s Virtual Clearcut as his example of how large publishers steal books from smaller ones, he’s putting his foot in one he created himself. Fawcett informs me that indeed the book started out as a project for Terry Glavin’s Transmontanus imprint, which New Star published, and was originally meant to be an environmental expose on the 53,000 hectare Bowron Clearcut in Northern B.C.. But when the book began to morph into something well beyond Transmontanus’s 100 or so page limit and its environmental and local focus, Maurer graciously conceded that he couldn’t handle it, and Fawcett took the book to Crean, who did have the resources to develop it fully—and then lost a pile of money on it because it was too unconventional. Fawcett seems to think that it was the marketing department at Thomas Allen that was the villain, attempting to brand the book inside the narrow genre categories the Chapters/Indigo buyers prefer, that caused the disaster by titling it to attract the seven or eight forest rangers still able to read, and the environmentalists, who, when they read it, couldn’t handle it’s non-ideological stance. Fawcett claims this happens regularly because a.) the marketing departments, trying to satisfy the demands of Chapters/Indigo, have overpowered the editorial departments at virtually every publisher in the country, and b.) the same marketing departments don’t bother to read the books they’re flogging. The editors are increasingly powerless.

It’s also worth noting that Fawcett has continued to publish with both New Star and Thomas Allen, and that he has done this for 20 years.  This sort of situation is far more common than Maurer cares to admit.

So what are the big questions and answers being skirted here, the ones beyond the immediate situation? Are we approaching some sort of cultural Armageddon that will wipe out our book publishing industry while transforming Chapters/Indigo into a purveyor of cultural bric-a-brac and scented candles in which a few novels aimed at the diminishing stock of novel-reading little old ladies occupy a small corner of the floor? I hope not, but personally, I can’t see any way past the Chapters/Indigo mess for either publishers or writers.

At the macroscale it is partly the result of the evolution of mercantile capitalism and partly the product of technological changes in media, which together have reduced both the number of readers and altered the attentional choices (and perhaps, capacity) of the average citizen by creating alternative, and largely emotion-based reception and transmission devices for information. Yet another cause is weakening government resolve. Governments across the West have decided their mandate is to act primarily as a component of the economic system and a cheerleader for the corporate sector, and now merely seeks to serve those purposes—whatever they happen to be aimed at at any given  moment. We can also lay some blame on the disintegration of our education systems, which has taught the young little more than how to have a nice day filled with consumer preferences and emotionally-authenticated opinions for several decades, and has transformed our higher education system into a job-training pipeline for the corporate sector, for which knowledge is simply another form of merchandise.

But behind that is the most difficult question of all, one that we have neither experience with, or any perceivable will to answer: what happens to a society that loses the technical ability to analyze and mediate its own activities?  Because that will be the consequence of the collapse of book reading, which is the primary platform for this depth of analysis in contemporary civilization, and the ground of the political and intellectual discourse required to keep the cognitive equipment operational.

McLuhan’s multi-disciplinary committees have failed woefully to do this work. The academic world has degenerated into ideological gang warfare, translating “multi-disciplinary” to “inter-disciplinary”, which is little more than shoals of ambitious professors vying for jargon supremacy.  Newspapers, trying to compete with the Internet and television, have imposed limits on most reportage to 800 words or less, thus obviating any serious analysis of issues. And television, likewise following McLuhan’s lead, has news anchors pestering flood victims and the like for some sort of expression of their feelings. And then there’s the Internet, where unargued opinion and unresearched blogging has supplanted research and analysis.

The trouble is real and profound, and it ain’t going away anytime soon.


3000 words, October 28, 2010


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