Publisher’s Rant

By Gregg Shilliday (originally published April 28, 2011)

For Issue 3 – Whither The Book? – editor Maurice Mierau has kindly allowed me to sit briefly in his prized Rant Chair. Knowing the importance of this topic to me and other book publishers, Maurice suggested I offer my neurotic ramblings to help set the stage for the much more articulate contributors he has assembled for this month-long discussion on the future of the book.

Anyone listening to the kvetching of book professionals knows the industry is, once again, in trouble. This might seem surprising to the public, considering the large amount of retail space devoted to the selling of books and the sudden explosion in ebook sales, along with the great success of Canadian authors worldwide. But the sad fact is — the industry is in trouble.

Image by Dale Cummings

Publishing books in Canada is not easy. Paper books are expensive to print and distribute. Ebooks are not, but the emerging price paradigm of online retailers ($9 to $12) leaves little behind for the publisher and author (unless you sell in giant Grisham-like numbers).

If you are a small regional/literary press, the picture is even gloomier. Looking at the bottom-line numbers, no real business person would even consider entering the publishing field. Selling pet rocks would be easier and more profitable. Former publisher Anna Porter recently suggested in the Globe and Mail that publishers are terrific business people. I find that a bizarre comment. Take away grant support and, for bigger presses, lucrative agency rights to sell international bestsellers in Canada, and most publishers would fail overnight. Publishers and others in the trade are terrific people – they work long hours for low pay, they love books and they think literature is important to our culture – but very few of them have a sound business background.

So why do a masochistic few firms embrace this challenging enterprise? Before I attempt to answer the question, it might be best to outline a few of the more obvious difficulties facing book publishers today. First and foremost, books are a luxury. They are not food or shelter. You can’t breathe them or make love to them. Also, books cost a lot. The reason for high prices can be explained simply — high costs. Brick and mortar retailers and wholesalers demand between 40 to 55% of the list price of a book, sales reps collect 10%, distributors require at least 15%, and the poor author gets a relatively paltry 10%.  After printers, designers, editors and marketers are paid, one can see there isn’t much of a profit margin left for the publisher.

Even less sustainable is the nascent economy of ebook sales. While input costs are less, the profit margin for publishers remains tiny. One publisher of my acquaintance decided to digitize his backlist. He sent all his older books to a firm in India where they were scanned and returned as ebook ready. Unfortunately the OCR (optical character recognition) technology that was used rendered many tricky words (homonyms such as there and their) interchangeable. So he had to hire a proofreader to check every word in every book and make corrections. When he then approached the online retailer Amazon, he was told that he had to abide by their pricing of $.99 to $9.99 or have his share of revenue cut in half.  He had recently agreed to an author’s demand for 25% royalty on ebook gross revenue (not net). After crunching the numbers, he realized that attempting to adjust his backlist to the new digital book delivery system would put his ebook budget into the hole.

Publishing, of course, is not just about economics. There is also the important role we play as cultural curators or, less charitably, gatekeepers. (Anyone familiar with the unedited self-published books and spam books that are clogging up the Internet knows what I mean.) Publishers look for authors with real talent. Small presses especially feel a responsibility to develop new writers. Most name authors in Canada, from Miriam Toews to Margaret Atwood, got their start with a small press. Admittedly, with many books we release, we aren’t fulfilling an obvious market need. The public isn’t clamouring for a free verse first novel by a recently paroled jailbird but – because we determine the manuscript has literary value – we publish it, then go out and attempt to convince booksellers and the public that they should have it. However, because of high costs and large retailer discounts, little money is left over for marketing.  Consequently, many books are sent out into the marketplace on a wing and a prayer – and not much else. It used to be that newspapers and magazines had significant review space to ensure that worthy books received some attention. Sadly that space has been cut back as the mass media look for new ways to connect with readers.

Another problem, both offline and online, is the relationship between publishers and booksellers. Generally, we don’t like each other. It’s a symbiotic relationship, like that between the rhinoceros and the myna bird. We grudgingly acknowledge that one can’t operate without the other, but we both feel – with paranoiac certainty – that the other party is mercenary and/or incompetent.

There are exceptions, of course.  Smaller, independent bookstores tend to operate from an economic and cultural position similar to that of small presses. Unfortunately, small booksellers have been pushed to the edge of bankruptcy by the advent of big-box stores.  These behemoths, led by the giant Indigo/Chapters chain, have re-defined the book retail market. Covering as much ground as a hockey rink, these huge stores stock thousands of titles. The selection is impressive, but it is also overwhelming. Consumers must think to themselves: why are so many books published each year? And how can I browse when most of the titles are displayed spine-out with nothing to recommend them other than a title and author’s name? The bottom line is that the majority of Canadian publishers have little in common with giant retail enterprises that treat books simply as commodities.

Now we hear that these big retailers are suffering from the rise of the ebook. Borders in the US has filed for bankruptcy protection. Indigo/Chapters has announced they will transition into a gift store with some books. McNally Robinson has added a bakery and baby supplies to their book selection.

For a publisher like us, who is experimenting with ebooks but remains committed to paper books, especially well-made and well-designed collectibles, we need these brick and mortar retailers to survive. If that means they need to sell baby powder and croissants in order to keep books on the shelves, more power to them.

So, to review, paper books are expensive to produce and sell. Ebooks are still in flux. Some retailers are going broke. Self-published authors are clogging up the interweb. Throw in grant funding that encourages quantity over quality, and one can see that book publishers face some interesting challenges.

So why do we do it? Why do we continue to publish books in the face of all of these difficulties? The simple answer is: because we love books, and we believe in the many talented authors we have writing here in Canada.  They have an important story to tell and they need sympathetic publishers willing to help them tell it. Most days, that is reason enough.