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Canada's book market 'stagnant', warns government

19.02.08 Canada: Monica Dobie

Canadian book buying culture has changed dramatically over the past 15 years resulting in a discount obsessed, bestseller driven market that has gone flat despite a record number of books being released by Canadian publishers according to the analysis of a report conducted for Heritage Canada, a Federal government agency.

The report follows a difficult period for the Canadian book market with publishers and booksellers hit by the rise in price of the Canadian dollar and the subsequent falling price of American books: earlier this year The Book Room, the oldest bookstore in Canada, said it  was closing after 169 years in the business; while Raincoast Books, the Canadian publisher of J K Rowling's Harry Potter series, closed its publishing programme.

The Book Retail Sector in Canada study confirmed that the creation of Chapters in 1995 and its subsequent takeover by Toronto-based Indigo Books Music and More in 2001 had decisively shifted book retailing in Canada towards a market with one dominant player.

Indigo takes 44% of domestic sales when including online sales and university bookshops, though this rises to 67% if online and mail-order sales and sales at university and college bookstores are excluded. Independent booksellers account for just 20% of traditional book sales.

The report said this large concentration of books with few retailers has changed the consumer to one more concerned about price than artistic value. "Consumers quickly become value consumers . . . then develop expectations for what bestsellers and new releases should cost, expectations that are difficult for independent retailers to match," said the report.

The study said that the new consumer behaviour caused by a small concentration of sellers may have long term ramifications for the supply and demand of books in Canada. It added: "This concern describes a process where consumer purchases are more informed by price and less by  . . . [a book's] literary or artistic merit. As consumer behaviour becomes more weighted by price, so does the supply chain and in particular the selection of books that are featured, or even available, within a given sales channel."

The study cited sales tracker BookNet Canada that reported 373,402 titles sold at least one copy in Canada in 2006 but it was the top 10,000 titles that accounted for 64% of unit sales.

This discount culture has been encouraging to non-traditional retailers such as Costco, and WalMart, which have benefited from this new thrift book buying culture in the past few years, pushing their share of the market up to 20% of sales.

Nevertheless, new title output by Canadian publishers grew by a whopping 40% from 1998 to 2004. But the growth, according to the study, has not proven to benefit book retailers. "The net effect is that a growing number of books are contending for the attention of roughly the same number of book buyers, a situation that is amplified by the growth of used and online book sales . . . both the average sales per title in Canada and the average print runs in many title categories have been falling in recent years," said the report.

Despite the overall gloomy view for independent bookretailers, the study said some have managed to pull up their bootstraps in the past two years to open up successful niche market shops in neighbourhoods underserved by the large chains.

International Canada Canada: Monica Dobie

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