For children’s book publisher Orca Books it’s 25%. For non-fiction publisher Greystone Books it’s between 8% and 10%, and for Figure 1 Publishing, a cookbook and design publisher, digital represents just 3% of sales.
Voracious readers might assume that, by now, ebooks clogging up iPad storage space have replaced overflowing bookshelves. But after a tumultuous decade in publishing, print is still king for many Canadian publishers. Similar to the struggles of retailers, disruptions in traditional sales channels and marketing methods represent some of the biggest challenges for publishers.
“In Vancouver and Toronto, commercial real estate is so expensive and book margins are so thin that it’s tough to get new independent book shops – and we really need those independent shops,” said Chris Labonte, publisher and president at Vancouver-based Figure 1. “They know how to curate, and they know how to build a relationship with book lovers.”
Canada’s shrinking media industry also represents a challenge in getting the word out to readers, Labonte said, with less space in magazines and newspapers devoted to book reviews.
Jennifer Gauthier, director of sales and marketing at Greystone, another Vancouver publisher, agreed that retail shelf space has been shrinking in Canada and the United States, not just at book stores but at retailers like Costco (Nasdaq:COST).
“On top of that [print] book prices have come down, so the revenue you get from books has either stayed the same or not grown while the cost of everything has gone up,” Gauthier said.
Many of the books Greystone and Figure 1 publish are “beautiful” and feature high-quality writing and photography that make them attractive to own or give as gifts. To extend its retail reach, Greystone focuses on publishing books that will appeal to readers not just in Canada but also in other English-speaking countries.
Figure 1 often partners with authors, such as a well-known chef, to produce books that the authors buy and sell through their business, like a gallery, design store or restaurant.
Examples of other non-traditional retail spaces for book sales range from clothing retailer Anthropologie to hipster consignment stores on Vancouver’s Main Street, Labonte said.
The children’s book market has the advantage of being able to tap into schools and libraries, and digital sales have given many of the books Victoria-based Orca Books publishes a longer life – and more royalties for their creators, said Orcapublisher Andrew Wooldridge. Orca sells ebooks through Apple (Nasdaq:AAPL) and Amazon (Nasdaq:AMZN), but the company generates a better return through school and library-focused platforms like TumbleBooks.
While ebook behemoth Amazon had used its market share to drive down the price of ebooks, Wooldridge said prices have been rising in recent years.
“One of the big issues with ebooks is how devalued they started out because there’s no print aspect. ... I think we’re starting to see prices creep up again to a reasonable level.”
Peter Hudson, the Vancouver-based founder of a startup called Shelfie, has been trying to bring the world of print and digital together. He’s spent years pitching North America’s biggest publisher to participate in the Shelfie app, which allows users to submit a picture of their bookshelves and get free or heavily discounted ebooks of titles they already own.
More than 1,000 publishers now participate, including many of the largest houses, but some of his earliest takers were B.C. publishers.
Shelfie takes a 15% cut of ebook sales, but the main revenue generator for the business is analytics.
“[Author] Joe Hill is about to launch a new book in May. I’m sure it’s going to be amazing. But [his publisher] HarperCollins doesn’t have a database of the millions of people who bought his first four books,” Hudson said. “You think about that from a business and marketing health perspective: what are publishers doing if they don’t know who bought their books?”
Putting more accurate analytics in the hands of publishers could help push up the value of ebooks, Hudson said, pointing out that Amazon controls 70% of ebook sales in the United States, while Kobo accounts for 50% of sales in Canada.
“When you get those kinds of quasi-monopolies, then those retailers who own the consumer have a lot of power over both the producers and the consumers,” Hudson said, comparing the dynamic to the way Walmart (NYSE:WMT) pushes suppliers to reduce prices.
“More information is always better,” Wooldridge said. “The problem with books is not so much the analytics, but the quality of the data and being able to communicate that to other people. The big deal with books is the discoverability.”
@jenstden
