Thursday, January 10, 2008  
Raincoast Downsizing

:: Posted by Bryan @ 1/10/2008 01:40:00 AM
Raincoast Books, the Canadian publisher of Harry Potter and distributor for Fantagraphics and Drawn and Quarterly, has announced it is suspending its publishing activities and will be concentrating on its distribution business.

In a move that Bookninja editor George Murray calls a "huge 'fuck you' to Canada," Raincoast will close its Mississauga warehouse and fire 20 employees. It will follow through with plans to publish and promote 15 books in Spring 2008 and then close the publishing division. Raincoast blames the rising Canadian dollar for its decision, citing massive discounting of up to 20% over 2007 as a response to consumer demand for cheaper books, resulting in huge losses. Raincoast's actions were long predicted: many in the industry expected some sort of downsizing following the conclusion of the Harry Potter series --basically Raincoast's reason for existing as a publisher (Raincoast got in on the groundfloor of the Potter gravy train and kept putting out a few other books per year so it could call itself a Canadian publisher, goes the argument). Publishing accounts for approximately 5% of Raincoast's revenue.

Raincoast will continue as one of Canada's largest distributors, with a 50-publisher roster including D+Q, Fanta, and Chronicle Books. Raincoast heavily promotes these publishers to booksellers and online through their blog, and distributes approx. 10,000 different titles per year throughout Canada.

Raincoast's stated claim of following the dollar is an aspect of one of the biggest stories of 2007, dollar parity with the U.S. and the effect on book prices.

The Globe and Mail sums up the numbers game in Canada:
prices, particularly prices of Canadian titles, can only come down so far here, especially given the limited economies of scale available in a country of 33 million and the discounting practised by the country's dominant retailer, Indigo Books and Music. As Roy MacSkimming, author of The Perilous Trade: Book Publishing in Canada 1946-2006, observed yesterday: "If Canadian books had to be priced according to real costs in a totally sort of Adam Smith world, with no government support, they'd be way higher than they are already." Remarked Carolyn Quinn, executive director of the Association of Canadian Publishers: "You can't get blood out of a stone. Profit margins in this country are "very small ... and a book costs what it costs," even with subsidies from the federal government's Book Publishing Industry Development Program, among other publicly funded support networks.

At the same time, Quinn acknowledged that "the industry has evolved" in such a way that "people expect a book that you want to give someone for his or her birthday, whether it's a history of your 25,000-population town or it's The Da Vinci Code, is going to cost more or less about the same."

Martin acknowledged the Random Canada conglomerate, a wholly owned foreign subsidiary with imprints such as Knopf, Doubleday and Vintage, "is better able to withstand the coming storm" than, for example, a Canadian-owned independent like Toronto-based House of Anansi, which has to make most of its money from Canadian titles.


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more:
Toronto Star
cbc
Canadian Press

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