Amazon and HarperCollins strike deal to avoid “doomsday scenario”

April 15, 2015 by · Leave a Comment 

Amazon_logoAmazon, the world’s largest online book retailer, and HarperCollins, the second-largest of the so-called “big five” publishers in the U.S., have entered into a multiyear contract, avoiding a protracted battle over discounts and pricing. Bloomberg Business quotes Erin Crum, a spokesperson for HarperCollins, as saying, “HarperCollins has reached an agreement with Amazon and our books will continue to be available on the Amazon print and digital platforms.”

According to Engadget, the deal with HarperCollins is similar to deals struck last year with Simon & Schuster, Macmillan, and Hachette, in that it allows HarperCollins to set prices on e-books – long rumoured to be a point of contention with Amazon, which likes to keep prices artificially low. This is ironic, since it basically represents a capitulation to the agency pricing model that the retailer rejected several years ago, leading to a publisher revolt and accusations of collusion from the U.S. Department of Justice.

Earlier this year, Business Insider indicated that Amazon had reached an impasse in contract negotiations with HarperCollins, potentially paving the way for a protracted battle resembling the one the retailer engaged in with Hachette last year. That contretemps saw Amazon delay shipments of Hachette titles and remove buy buttons from the publisher’s books (something Amazon had previously done to Macmillan). The battle turned exceedingly ugly, with more than 900 authors eventually signing an open letter criticizing Amazon for its bullying tactics.

Following the Business Insider piece, a blog on the Melville House website asked whether Amazon might be preparing to engage in a “doomsday scenario” with HarperCollins, something the blog post suggested would be tantamount to an “apocalyptic development.”

HarperCollins_logoOverheated rhetoric aside, this never seemed like a very plausible scenario. HarperCollins is not Hachette: it has much more leverage over Amazon when negotiating terms. Its stable of authors – including Neil Gaiman, Dennis Lehane, and J.R.R. Tolkien – features big names that Amazon would not want to risk losing access to. Among the big names in HarperCollins’s stable, one looms larger than all the others this season. Harper Lee’s much ballyhooed second novel, Go Set a Watchman, is being published on July 14; there is no way Amazon would risk being the only online retailer in the U.S. not to feature that title.

But more that that, HarperCollins has been aggressively pursuing alternate avenues for distributing its wares online. It signed with the subscription services Oyster and Scribd, and last year revamped its website to include the ability to sell direct to consumers.

When Macmillan signed its contract with Amazon last year, CEO John Sargent stated that the retailer accounts for as much as sixty-four percent of the publisher’s revenue from e-books. HarperCollins has obviously taken measures to mitigate this market dominance, and – combined with its size and market clout – these seem to be working. Though with agreements already in place with three other big five publishers (Penguin Random House is now the lone holdout), Amazon had no real incentive not to agree to similar terms with HarperCollins.

Which in a way is disappointing. It would probably have been ugly, but a knock-down, drag-out, no-holds-barred battle between Jeff Bezos and Rupert Murdoch would surely have been entertaining.

Inaugural edition of the Inspire! book fair was both “positive” and “deflating”

November 20, 2014 by · 2 Comments 

Inspire!_Toronto_International_Book_FairExpectations were high heading into the inaugural iteration of Inspire! Toronto International Book Fair, as were anxieties.

Initially intended as a combination trade fair and consumer event, the fair morphed into a consumer showcase, attracting more than 200 exhibitors and featuring over 300 hours of programming. Big-name authors graced the various stages arrayed throughout the Metro Toronto Convention Centre’s north hall, including Anne Rice, Sylvia Day, Dav Pilkey, Jeff Kinney, and Margaret Atwood, in her first public Canadian appearance to promote her recent story collection, Stone Mattress.

The fair, which ran from Nov. 13–16, was the brainchild of co-executive directors John Calabro, former president of Quattro Books, and Rita Davies, formerly with the Toronto Arts Council and the former head of culture for the city of Toronto. Along with co-executive director Steven Levy, whose credits include the One of a Kind craft shows, the Interior Design Show, and the Festival of Canadian Fashion, Calabro and Davies conceived of an event intended to allow publishers to interact directly with consumers, and to spotlight some of their marquee titles heading into the all-important Christmas buying season.

From the start, there were worries about how the fair would transpire. Indigo Books & Music was brought on as official bookseller for the main stage (where all the brand-name authors would appear), provoking consternation among independent booksellers and publishers (as did the notion of a book fair luring buyers away from bookstores during the most lucrative season of the year). The Convention Centre was seen as an uninviting location for a consumer-oriented event, and publishers questioned whether the potential sales would be sufficient to recoup booth-rental costs, which ran anywhere from $500 to $8,800.

Though it is too early to determine publishers’ ROI – most are still crunching the numbers – anecdotal evidence suggests that things at the fair were a bit more sluggish than anticipated. A generally sunny article in Publishers Weekly quotes Davies as saying that attendance for the weekend was in the “ballpark of between 20,000 and 25,000,” well below the promised 50,000 attendees.

“I hate that 50,000 attendees figure,” Davies told Quill & Quire. “All year we used 30,000, and I don’t know how that got into a late media release.” This is disingenuous, to say the least. An Inspire! press release dated December 20, 2013, announcing the addition of Nicola Dufficy as programming director for the fair, includes the headline “Four-Day Fair to Captivate 50,000 Readers with Programs Dedicated to All Things Books.” Davies’ name and contact information appear at the bottom, so it’s hard to understand how she was unaware of where the 50,000 figure came from.

Regardless, 25,000 attendees – which Davies suggests are accounted for by advance ticket sales, scanned tickets at the door, and a manual tally of children (who were given free admission to the fair) – falls well below expectations. Wandering the fair floor on Sunday morning was particularly disheartening, in large part, one suspects, because many potential fairgoers chose to attend the Santa Claus Parade instead.

St. John’s poet and children’s author George Murray, who was programmed on the kids’ stage on Sunday morning, found the experience “a little deflating.” Though grateful for the opportunity to present his recent children’s book, Wow Wow and Haw Haw, to a Toronto audience, external competition provided stumbling blocks. “The downtown was a traffic mess and virtually all the kids were lining the streets outside,” Murray says. “So I read to about three children and a smattering of adults.”

Low attendance levels were not the only hiccup in the fair’s first outing. The convention centre did indeed prove a tricky venue, though not entirely for the reasons anticipated. The north hall essentially amounts to one cavernous room, which meant that the various programmed stages were constantly competing to be heard over the general din, and over one another. Authors presenting their books on the Spark Stage, located at the west end of the pavilion, had to contend with noise from kids’ programming on the TD Children’s Stage, which was virtually contiguous. Introducing her memoir The Temporary Bride on the Discovery Stage on Saturday afternoon, author Jennifer Klinec was completely drowned out – to the mortification of everyone in attendance – by a booming voice resounding through the entire hall, enticing people to come to the Main Stage for Sylvia Day’s appearance. (Full disclosure: I was onstage to moderate the panel that was interrupted when Klinec was speaking.)

The nature of the room, and the set-up of the various exhibitor booths, made navigation difficult; large publishers with central booths – like Simon & Schuster Canada, Penguin Random House, and Scholastic – were easy to find, but Coach House Books, in the Discovery Pavilion, was tucked behind a pillar that virtually obscured the press from sight, and I never was able to locate the Humber School for Writers. Nor were the various stages clearly adorned with schedules delineating author appearances and times.

“I wasn’t sure going in if the convention centre was really the best venue to draw in readers, and particularly our readers,” says Coach House publisher Alana Wilcox, “and in the end I don’t think it was. … I had hoped, too, that it would draw an entirely different demographic for us, one that wouldn’t have bought those same books at local booksellers, but I’m not sure that’s true.”

Despite the hurdles, some people were optimistic about the weekend. Clare Hitchens, who does marketing and publicity for Wilfrid Laurier Press, says that the fair was a “positive” experience overall, providing the out-of-town academic press with the opportunity of “putting our titles in front of a broader set of readers.”

“Contributors to our Indigenous Studies series [including Neal McLeod, Lee Maracle, Joanne Arnott, Armand Garnet Ruffo, and Daniel David Moses] were well represented in the First Nations, Métis, and Inuit Literary Circle,” Hitchens says, “and those conversations were invigorating.”

The First Nations programming was, by all accounts, one of the highlights of the fair: the stage was well attended overall, and the anecdotal response coming away from this aspect of the event is almost entirely enthusiastic.

A number of publishers I spoke to pointed out the benefit of having a chance to network with contacts from the Ontario Arts Council, the Ontario Media Development Corporation, and other professional associations, leaving the impression that the trade aspect of the fair was underutilized and could afford to be given greater attention should the event recur in future years. “I was under the impression it was to be more like a rights fair, like Frankfurt or London,” Murray says, “but I didn’t see any evidence of that.”

A few “tweaks” aside, Davies seems convinced that the inaugural edition of Inspire! will not be the last. “We’ll look at some of the floor plan, where we might send our marketing,” she tells Quill & Quire, but she doesn’t anticipate “any major changes.” Whether that will be enough to entice publishers – including HarperCollins Canada and House of Anansi Press – who stayed away this year, or whether there is a chance of achieving that magic number of 50,000 through the gate, remains something of an open question.

Tilling a disappearing field

April 1, 2014 by · 3 Comments 

When I was young, I spent untold hours poking around the bookstores in the heart of downtown Toronto. Many people who are now the age I was then – mid to late teens – will find it hard to believe, but there was a time when city bookstores were almost as ubiquitous as Starbucks coffee shops are today. In a two-block radius, a dedicated book lover could browse two Coles outlets near the intersection of Yonge and Dundas, Lichtman’s News and Books in the Atrium on Bay, and of course, the World’s Biggest Bookstore on Edward Street. If you were also into music, you were in luck, because right around the corner on Yonge were A&A’s and Sam the Record Man, doing a roaring trade on a block that also featured the Zanzibar strip club and a series of dodgy basement porn emporiums. (They helped keep the rent down in the area.)

Today, only the Zanzibar remains in business.

The World’s Biggest Bookstore, one of the icons of downtown Toronto retail, closed its doors on Sunday, after more than thirty years. On the same day, the Book City mini-chain shuttered its flagship location in the Annex; that store had operated for close to four decades.

Walking between the rows of empty shelves at the World’s Biggest Bookstore this past weekend – shelves that once held such promise of discovery for a young man who was just beginning to discover himself – was a melancholy experience. There was, first, a sense of grandeur: the store’s origin as a bowling alley was apparent in the sheer size of the space. But more, there was a pervading emptiness, not just physically but emotionally as well. It’s never easy to realize that the dreams and hopes and memories you’ve invested in a place are not shared by the rest of the world.

Skyrocketing rents put the World’s Biggest Bookstore out of business, along with a shift in buying habits from brick-and-mortar bookstores to online retail. “There was not the need for a 65,000-square-foot physical bookstore in the downtown core,” Indigo Books and Music CEO Heather Reisman told the National Post in advance of the store’s closing. Indigo took up ownership of the store in 2001, following a merger with Chapters, which had run it since 1994. The Post quotes Larry Stevenson, former Chapters CEO, as saying of the World’s Biggest Bookstore, “It was a very successful store when we bought it. Basically, our strategy was pretty simple: Don’t touch it, it’s not broken.”

Rachel Burden, an employee at the time responds, “One of the first things Chapters did was fire all our buyers.”

That seems to have as much to do with the disappearance of Toronto’s downtown bookstores as anything else: the will to continue is just not there. “There is 33,000 square feet of books in the Eaton Centre,” Reisman told the Post, referring to the mall’s Indigo store. “And there is another 36,000 square feet of books at Bay and Bloor.” This, of course is disingenuous: Reisman is counting the entire footprint of her Eaton Centre and Manulife Centre stores, much of which is dedicated not to books, but to Pilates balls and scented candles and stuffed toys.

Today, word came down that another Chapters location, this one in Festival Hall at the corner of John and Richmond Streets, would be closing its doors at the end of May. National Post books editor Mark Medley tweeted an official comment from Indigo about its strategy for the future:

 

The passing reference to downtown notwithstanding, the closure of the World’s Biggest Bookstore and the impending demise of the Festival Hall location would seem to indicate that Indigo has more or less abandoned the field, leaving only the Eaton Centre store to compete with Ben McNally Books, the sole independent outlier in the heart of the financial district.

Much the same thing is happening in Manhattan, according to The New York Times. Exorbitant rents are forcing booksellers to close stores in the downtown, and some are setting their sights on suburbs such as Brooklyn or Queens as more affordable alternatives. The NYT quotes author Robert Caro as saying, “Sometimes I feel as if I’m working in a field that’s disappearing right under my feet.”

It certainly feels that way to a man edging into his mid-forties, who can only look back on his younger days and recall hours spent bouncing from store to store in search of the next unexpected treasure.

Book city? Toronto loses another independent bookstore

January 17, 2014 by · 1 Comment 

Book_City_AnnexThis post has been updated.

“We agonized over the decision.”

That was how Ian Donker, general manager of Toronto’s Book City mini-chain, put it to Quill & Quire, referring to the indie bookseller’s announcement yesterday that it will shutter its iconic Annex flagship location in the spring. The store, with its easily recognizable yellow and black awning, has been a fixture in the Bloor and Bathurst neighbourhood for close to four decades. CanLit royalty – Atwood, Ondaatje, Gibson – number among its patrons. Poet Paul Vermeersch and novelists Derek McCormack and Suzanne Sutherland have worked the till. Perusing the shelves on any given weekend, one could expect to run into writers Cary Fagan, Susan Swan, Russell Smith, or Stacey May Fowles, filmmaker Deepa Mehta, journalists Ian Brown or Emily M. Keeler, publisher Alana Wilcox. Like the erstwhile Pages Books and Magazines on Queen Street, Book City in the Annex was more than a store, it was a meeting place, a cultural salon, and a nexus of discovery.

How easy it is to slip into the past tense when referring to the store (which, it should be pointed out, remains open at the time of this writing). How easy to add its name to the list of Toronto independents that have closed their doors: Pages, of course, along with the Albert Britnell Bookstore (now a Starbucks), Writers & Company, The Book Cellar, This Ain’t the Rosedale Library, The Toronto Women’s Bookstore, Lichtman’s News and Books, Nicholas Hoare, and, in a few weeks, The World’s Biggest Bookstore. Torontonians of a certain age won’t remember, but there was a time when book lovers had a banquet of options to choose from, any one of which could be counted on to serve up something idiosyncratic, unexpected, or delightful. A few holdouts notwithstanding (the mini-chain Type Books, Ben McNally Books, Another Story Book Shop on Roncesvalles, along with the three remaining Book City locations and a handful of specialty shops such as Sleuth of Baker Street and Mabel’s Fables), Toronto no longer feels like a book city.

This sensation must be even more acute for the fourteen employees of the Annex store who stand to lose their jobs. These include John Snyder, the affable and knowledgeable store manager, who was one of Book City’s first hires thirty-eight years ago.

What has brought us to this state of affairs? Speaking to Quill, Donker cites a number of factors that led to the decision to close. “You name it and it has chipped away at the Annex location. It’s an evolving, changing neighbourhood like every other neighbourhood in Toronto. Rent goes up every single year. Sales have slipped for a number of years, through no fault of the staff or our efforts.”

Skyrocketing rents are no doubt a challenge for booksellers, but higher sales would go some way to mitigating this challenge. By all accounts, the 2013 Christmas season was one of the most prosperous in recent memory for bricks-and-mortar bookstores, bolstered by popular blockbusters such as superstar astronaut Chris Hadfield’s memoir, but also by strong selling literary fare such as The Orenda by Joseph Boyden and Eleanor Catton’s multiple award winner, The Luminaries. Yet it was still not sufficient to save Book City in the Annex.

The general public has been educated by the steep discounts offered by online retailers and big-box sellers like Indigo, Walmart, and Costco; they no longer feel that they should have to pay full price for a book. Selling books at more than forty percent off their cover price may work for a company like Amazon, which sees them as a loss leader, but these numbers are unfeasible for a small independent. Quoted in the Toronto Star, Frans Donker, the owner of the Book City chain (and father of Ian), says of the Annex neighbourhood, “Now it’s all fast food joints. The area has changed rapidly in the last seven to eight years. And that is affecting our business.” What he doesn’t mention is that the evolution of the area included the 2006 opening of a massive BMV Books location mere steps away from Book City. BMV is Toronto’s largest used book chain; their Bloor Street location offered students and bargain hunters a cut-rate alternative to the more expensive fare on offer a few doors west.

Bookselling, like writing and publishing, is not something one does to get rich. It’s something one does out of love, and because of a deep seated belief that books, and the culture they espouse, matter. But booksellers have to be able to subsist. And subsistence isn’t possible in the face of consumer demand that sellers offer their wares at unsustainable prices.

When the news about Book City’s Annex store closing broke on Twitter yesterday afternoon, the reaction was swift and predictable: much weeping and gnashing of teeth and bemoaning the loss of yet another indie bookseller in a city that likes to pride itself (rightly or wrongly) on its cultural diversity and sophistication. But the reality remains: if more people were willing to pay market value for a product they claim to love, fewer of these closures would occur. Chris Hadfield notwithstanding, this isn’t rocket science.

Update: While I stand by the idea that the glut of big box and online retailers offering cut-rate product as loss leaders is taking a significant toll on the book industry (not just booksellers, mind you, but writers and publishers as well), the poet Jacob McArthur Mooney made a good point over on Facebook. With his permission, I’m reprinting his comment here.

I’m not sold on the “If more people bought books it’d be there still” argument. Was Book City profitable? The chain isn’t closing, so it’s not like they went bankrupt. The owner puts “changing neighbourhood” and “raising rents” ahead of sales as the reason behind it. Both Worlds Biggest and Pages closed because the real estate market wanted them to. I don’t think that guilting book lovers with admonishments that if they had just bought more copies of more books none of this would have happened gets the whole story. Important people make decisions that set the tone for what kind of neighbourhoods we’re going to have, and the little folks like you and me can only pull with or against the tide. Rent increases are a means of dictating the nature of the neighbourhood you own a part of. At some point you raise it too high for even a stable, consistent business to pay if that business is a bookstore (or coffeeshop, or vid place, or other similarly quaint-minded a moneymaker).

World’s Biggest bookstore, downtown Toronto “icon,” set to close in February

November 21, 2013 by · 1 Comment 

World's_Biggest_BookstoreWhen I was a kid in Toronto, my father used to take me on weekends to look at the model trains at the flagship Simpsons department store at the corner of Queen and Yonge Streets. When I got a little older, on one of our weekend sojourns my father walked me a few blocks north and introduced me to something I came to consider even more magical and fascinating than the elaborate toy railway constructions that were such a huge part of my childhood.

The World’s Biggest Bookstore, a sprawling, 64,000 square-foot building located on a side street off of what was at the time a seedy stretch of Yonge north of Dundas, was a marvellous refuge for an already bookish kid: row upon row of books stretched over two levels, covering every subject imaginable, and then some. As a child, I mostly confined myself to the sci-fi and horror sections of the store; in my later teens I branched out into mystery, then started looking further afield, scouring the shelves marked “Fiction,” “History,” “Political Science,” “Film,” “Music,” and even, eventually, “Poetry.”

My literary sensibility has obviously evolved since I first walked through the glass doors of that enormous red building on Edward Street, but one thing has not changed in all those years: I’ve never stopped dropping by the store to poke around and see what I could find.

It now appears that the iconic downtown Toronto location, opened by bookseller Jack Cole in 1980, will disappear in the new year. An article in the Toronto Star indicates that the store is in the process of being sold to a developer, and will close to the public in February 2014.

The store had been leased by Indigo Books and Music for $1.5 million a year. The lease is up at the end of December, and according to the Star, Indigo cannot afford the new rent:

[Dan McGowen, vice-president of real estate and development for Indigo] said the company is rebalancing its real estate portfolio.

“You have to look at your portfolio on an ongoing basis, and we have a very large store at the Eaton Centre,” he said.

“This isn’t us in a mode of shutting down stores. We will be going back out in the market and looking for some net new stores,” said McGowen.

McGowen’s comments stand in contrast to those quoted in The Globe and Mail in June 2012. Word had spread that the landlord for the Edward Street property was scouting new tenants for the location once the lease came up, but McGowen insisted at the time that the World’s Biggest Bookstore was a “one-off” and the company would fight to keep it open. “I realize it isn’t literally the world’s biggest, but you know what, it’s the biggest for us. It is an absolute icon.”

Icon or not, it appears the store is set to go the way of another downtown Toronto landmark, Sam the Record Man, which was located right around the corner on Yonge until it was torn down in 2009 (the spot is now being developed as part of Ryerson University).

Perusing the shelves at the World’s Biggest Bookstore in recent years has been bittersweet. An air of mustiness pervades, and the stock on display has depleted noticeably. The volume of books on the shelves has been becoming increasingly sparse, with huge swathes of space given over to a handful of bestselling authors (the ubiquitous James Patterson, for example, or E.L. James and J.K. Rowling). What stock remains is somewhat tattered from being thumbed, and many of the books are noticeably yellowing as a result of exposure to the store’s harsh florescent lighting. Precious few customers can be seen browsing the aisles, and the generally decrepit state of the merchandise testifies to books that have been sitting unsold for some time, victims of a buying public that makes more and more of its purchases online rather than in-store.

However, for a kid who spent hours roaming the shelves, and an adult who kept returning to poke around on the odd weekend, there is a palpable air of nostalgia attached to the news of the store’s closing. It is not just another spot from my childhood that is set to disappear; the World’s Biggest Bookstore played a fundamental role in nurturing my love for literature and writing, and I, for one, will miss it when it’s gone.

The summer is ended and we are not yet saved

September 10, 2013 by · Leave a Comment 

That seems like a fairly accurate summary of where things stand in the realm of books and publishing as we move into the second week of September 2013. Joey Comeau’s short novel is also one of the books That Shakespearean Rag missed out on covering during its summer hiatus (or, in the spirit of our federal and Ontario provincial governments, its period of prorogue).

During the summer months, Indigo, Canada’s largest book retailer, released its first-quarter report, which did not paint a particularly rosy picture for the bricks-and-mortar book retailing sector. Sales of physical books were down year-over-year, as – somewhat surprisingly – were sales of e-readers. According to the report, online sales “have seen less erosion as more customers move to purchase books online instead of in-store.” This represents a significant shift in consumer buying patterns, although the fact that sales of e-readers are down indicates the move to digital may not be the panacea everyone hoped for. (This trend could be accounted for by consumers abandoning dedicated e-readers in favour of tablets capable of multitasking and performing other functions besides reading.)

Also this summer, the world’s richest author, J.K. Rowling, won a “substantial” settlement against a law firm that breached confidentiality by leaking her name as the author of a pseudonymously published mystery novel, The Cuckoo’s Calling. According to The Independent, “Ms Rowling’s solicitor Jenny Afia told the court her client, who was not present during proceedings, ‘has been left dismayed and distressed by such a fundamental betrayal of her trust.'” A breach of trust, it must be noted, that resulted in exponentially increased sales of the novel once the author’s true identity had been revealed. To Rowling’s credit, the damages from the settlement were donated to a charity that supports members of the U.K. military and their families.

Bad news comes in threes, or so it is said, and this summer readers lost a trio of beloved writers: Iain Banks, Elmore Leonard, and Seamus Heaney.

Simon & Schuster Canada, which had been cleared by Heritage Canada in May to inaugurate a domestic publishing program, announced its senior staff. The new roster of executives includes former HarperCollins editor Phyllis Bruce, who will run an eponymous imprint. Bruce, who will work with S&S Canada publisher Kevin Hanson and associate publisher Alison Clarke, told Quill & Quire that she wanted her first acquisition “to be a new writer and a new theme, to signal that I’ll be doing what I did at my previous imprint, and that’s to go out and search for new writers.” Bruce’s first acquisition is a novel by Ann Choi, a recent student at the University of Toronto’s creative writing program, about a family of Korean immigrants who run a convenience store in Toronto. Readers who feel a slight sense of déjà vu may be forgiven, though it appears the author had not seen Ins Choi’s award-winning play before writing her novel.

Details about another significant title for S&S Canada came clearer over the past few months. The long-awaited book by Canada’s sitting prime minister, Stephen Harper (who appears as “Stephen J. Harper” on the book’s cover), was given a pub date and a title. A Great Game: The Forgotten Leafs and the Rise of Professional Hockey will appear in bookstores on November 5.

Harper’s is not the only big book to appear this fall, as a quick glance at Quill & Quire’s previews for fall fiction, non-fiction, and international releases will attest. Indeed, the final four months of 2013 comprise the most jam-packed season in recent memory. Major new novels are on the way (or have already started appearing in bookstores) from Margaret Atwood, Joseph Boyden, Michael Winter, Wayne Johnston, Douglas Coupland, Mary Swan, David Gilmour, Craig Davidson, Eleanor Catton, and Catherine Bush. And that’s just the Canucks. International releases include Stephen King’s highly anticipated sequel to The Shining, along with new novels from 2013 Scotiabank Giller Prize juror Jonathan Lethem, Thomas Pynchon, Amy Tan, Chuck Palahniuk, and the much-touted sophomore novel by Marisha Pessl.

There is also a mammoth oral biography of the late J.D. Salinger making its way to bookstores as of this writing. Written by David Shields and Shane Salerno, the volume accompanies Salerno’s new documentary film, which has so far been garnering less-than-positive reviews. Regardless of the book’s critical reception, it is sure to be of interest to readers who maintain a fascination with its eccentric subject, and has already offered one bombshell revelation: five unpublished Salinger manuscripts exist and will begin appearing in 2015.

Scott Turow, Amazon, and the publishing wars

March 12, 2012 by · Leave a Comment 

Last week, the U.S. Department of Justice indicated that it was looking into the possibility of filing suit against Apple and five of the country’s largest publishers – Macmillan, Simon & Schuster, Penguin Group, HarperCollins, and the Hachette Book Group. The DoJ is alleging collusion and price fixing in the area of e-book sales. At issue is the publishers’ agreement with Apple to adhere to an agency model for e-books, which allows the publishers to set prices and prohibits Apple (and other sellers) from discounting them.

The agency model is opposed to the wholesale model, which allows sellers to set prices, and has resulted in steep discounts from Amazon, an online retailer that has parlayed losses on lower e-book prices into a virtual monopoly in the area of e-book sales.

The conflict between the two business models, and the possibility of action on the part of the DoJ, prompted Scott Turow, best-selling author and president of the U.S. Author’s Guild, to issue an open letter decrying the potential legal action. By selling e-books at a loss, Turow contends, Amazon is actually engaging in a practice of predatory pricing meant to drive competitors – including bricks-and-mortar bookstores – out of business. The agency model, Turow argues, promotes competition, which is essential to a vibrant literary culture:

Two years after the agency model came to bookselling, Amazon is losing its chokehold on the e-book market: its share has fallen from about 90% to roughly 60%. Customers are benefiting from the surprisingly innovative e-readers Barnes & Noble’s investments have delivered, including a tablet device that beat Amazon to the market by fully twelve months. Brick-and-mortar bookstores are starting to compete through their partnership with Google, so loyal customers can buy e-books from them at the same price as they would from Amazon. Direct-selling authors have also benefited, as Amazon more than doubled its royalty rates in the face of competition.

Let’s hope the reports are wrong, or that the Justice Department reconsiders. The irony bites hard: our government may be on the verge of killing real competition in order to save the appearance of competition.

The vitriolic responses from proponents of cheap books and digital publishing were as swift as they were predictable. Writing on Joe Konrath’s blog, author Barry Eisler takes Turow to task for foolishly suggesting that Amazon is killing bookselling by selling a metric shit-tonne of books:

Watch the linguistic dodge: Scott is implicitly arguing that the only model that counts as “bookselling” is the current model, built and maintained by legacy publishers and brick-and-mortar stores. That is, “bookselling = physical bookstores. Online bookselling doesn’t count as bookselling.” He’s arguing as though physical booksellers are the only legitimate organisms in the forest, while Amazon is some sort of exotic interloping alien species rampaging through a healthy native ecosystem. This is the only way to make sense of an argument that states, “Amazon is destroying bookselling by selling so many books.”

Well, actually, that’s not what Turow is implying, although that is clearly what Eisler is inferring. What Turow is actually arguing has less to do with the volume of Amazon’s sales and more to do with the reason behind them. It’s the artificially depressed prices Amazon offers that are the problem, at least in Turow’s conception, and it is this point that often gets lost in these arguments.

One side-effect of the steep discounts Amazon offers – discounts that, at the risk of being repetitive, mean Amazon takes a loss on sales because they sell their e-books at a price point lower than their own cost – is that they condition consumers to expect books to be so cheap. The consumer advocate will argue that he or she should not pay more than what the market will bear, but this conceals a basic fallacy. Amazon’s prices do not reflect what the market will bear, and they sure as hell don’t reflect fair market value. Professionally produced books – whether they be digital or otherwise – require editing, type design, marketing, and sales support. None of this comes for free. (In point of fact, most people performing these tasks in any publishing house in North America are likely being paid much less than their skills are worth.) Other booksellers don’t artificially mark their prices up; Amazon artificially marks its prices down. This is what has convinced consumers that $30 is too pricey for a hardback novel, and it is also what has contributed to Amazon’s monopoly over the e-book marketplace.

The problem, as The Washington Post‘s Steven Pearlstein points out, is that breaking this monopoly will result in higher prices for consumers.

So which is better: a market in which Amazon uses low prices to maintain its e-book monopoly and drive brick-and-mortar bookstores out of business, or one in which the major book publishers, in tacit collusion with Apple, break Amazon’s monopoly and raise prices?

Pearlstein’s own answer is, at least provisionally, the latter:

[T]he danger of regulators and judges focusing solely on short-term price effects is that it can mean turning a blind eye to business practices that temporarily lower prices even as they drive competitors out of business, lock in customers or limit entry into the market by new firms with better products.

Or to put it another way, it’s great to be able to buy e-books for $9.99, but maybe not if the alternative is accepting an Amazon monopoly that drives Barnes & Noble and your local bookstore out of business.

The only really safe mechanism for setting price is open competition, says Andy Gavil, an antitrust expert at Howard University, and anything that prevents that ought to be viewed with suspicion.

Meanwhile, Konrath reprints a letter author Suzanne White sent to the Author’s Guild in response to Turow’s own missive, in which she criticizes the guild for not working on behalf of authors, but rather trying “to protect what is obsolete”:

Where in the traditional publishing industry can an author command 70%? Where can an author have utter dominion over cover art? Formatting? Content? Illustrations? Impact? Marketing? The answer is Amazon. And a little bit Pubit and sometimes Smashwords or Apple as well. Where in the standard publishing industry can an author revive a book that he or she wrote in 1982, sold to a publisher who printed it, didn’t sell very many and took it right off the market? Amazon, that’s where. Author gets rights back, re-formats the book, slams it up for sale on Kindle and in six months is making money with that book.

Where? Tell me. Where can an author do better?

Why does a Guild for Authors rail on about monopolies and decry the demise of old-fashioned publishing as we knew it? Dinosaurs still prowling the streets of Manhattan want their good old boy industry back. Give it up already.

Any publisher worth her salt knows that in many cases, giving authors “utter dominion” over things such as cover art, formatting, and marketing is a recipe for disaster. By the same token, no publisher worth her salt is currently resting on her laurels, hoping to exploit authors and consumers by raising prices above all reason, or acting like a “dinosaur” prowling the streets of Manahttan or Toronto. Indeed, most of Konrath, Eisler, and White’s despised “legacy publishers” are bending over backwards in an attempt to innovate. ECW Press now offers free digital copies of their frontlist books when customers purchase a hard copy. Coach House Books has done the same. Penguin Canada has recently experimented with modestly priced e-book “singles” publishing. None of these is the action of so-called “dinosaurs.”

Perhaps the time has come for both sides in this debate to tone down their rhetoric, to shelve the righteous indignation on the one side and the frequently paranoid defensiveness on the other and try to find some common ground. Of course, in order for this to happen, each side will have to admit that the other has some valid arguments. In my experience, the “legacy publishers” have historically been much better at this than the upstart digital evangelists.

Closing the book on one vision of Indigo Books & Music

November 10, 2011 by · 1 Comment 

It is becoming more apparent with each successive move that Indigo Books & Music, along with its CEO, Heather Reisman, sees no future in bookselling.

At the beginning of this year, the company implemented a 4% co-op fee on all books sold through at its stores, replacing the previous model, in which publishers paid for co-op individually. This made a number of industry watchers nervous because, it was assumed, if Indigo were to dictate placement rather than publishers buying space for individual titles that might not otherwise be afforded prominence, the chain would give preference to surefire bestsellers purchased in large numbers. These concerns were not ill-founded. If you want to see the effects of the new co-op regime in action, take a jog over to the Indigo-owned World’s Biggest Bookstore in downtown Toronto, where one single title, Walter Isaacson’s biography of the late Steve Jobs – a recent “Heather’s Pick,” and one of two books that appear to be driving Reisman’s retail philosophy at the moment* – has placement in practically every prominent space at the front of the store (on the walls, table displays, free-standing shelves, and at the front cash), as well as appearing in significant numbers on tables and stand-up displays in both the business and biography sections.

Then in March, the company announced it was replacing president Joel Silver with Tedford G. Marlow, a former executive at such bookish companies as Urban Outfitters, Neiman Marcus, and Saks Fifth Avenue. Soon after Marlow’s appointment, Indigo announced it was planning to make significant changes to the product mix in its stores, decreasing the amount of floor space devoted to books in favour of space for more lifestyle-oriented products (read: candles, desk lamps, and tchotchkes). These, it should be noted, would be designed for Indigo out of a studio in New York.

At around the same time, Indigo changed its returns policy, saying that it would re-evaluate the industry norm of ninety days before stock could be returned, with underperforming titles facing potential return in as few as forty-five days. Such “underperforming” books would not, of course, be ones like Isaacson’s Steve Jobs, but rather titles from smaller Canadian houses that were ordered in lower quantities and then placed spine out on the shelves. (If you think this constitutes the dictionary definition of a “self-fulfilling prophecy,” you’re probably not far off.)

At the time, Reisman told Publishers Weekly that the changes were necessary to compete with the drop in book sales resulting from customers’ migration to e-books: “In order to continue to be in the physical book business, we must add other product which feels like it fits with our journey because if you don’t and you lose 20%, 30% of your business to digital, you can’t stay in business.” Indigo’s “new mission,” Reisman told PW, would be “to enrich the lives of our customers. We are transitioning from being a bookstore to being a store that enriches the customers’ lives.” However, when all is said and done, Reisman, who styles herself as the company’s “chief booklover,” insisted, “Books and reading are at the heart and soul of Indigo and always will be.” (My emphasis.)

That was back in April. Cut to late afternoon this past Tuesday, when much of the publishing industry in Toronto was focused on that night’s ceremony to award the 2011 Scotiabank Giller Prize. A press release was sent out announcing that Kobo, the e-reading company in which Indigo holds a majority stake, is being sold to the Japanese e-commerce outfit Rakuten for the astounding sum of $315 million (U.S.).

The deal, from which Indigo stands to receive between $140 and $150 million, initially seemed like a tech story and little more. But that was before an article in the business section of today’s Globe and Mail suggested that Reisman does not intend to use the new money to bolster the bookselling side of her business, but rather to funnel it into the development of lifestyle products. In the Globe article, Marina Strauss writes that as a result of the Rakuten deal, “Ms. Reisman is in a stronger position to make acquisitions and expand non-book ventures, to offset Indigo’s shrinking book business. She will invest heavily to shore up her new product design and development studio in New York City, which is focused on home decor and gift items.” The article states that Indigo forecasts book sales to account for only 50% of its revenue in “a couple of years,” down from 75% now.

What is remarkable about the Globe article is the way brand strategist Anthony Campbell analyzes Indigo’s divestiture of Kobo. Campbell points to the incipient appearance in Canada of U.S. discount chain Target, and suggests that Indigo’s new direction will help them maintain “focus” to be competitive in the coming retail landscape: “It is a big challenge – there are a lot of retailers in this [lifestyle gift and home decor] space and it is where the world is going for a lot of other brands … Target’s been doing it for a long time, and they’re going to be in Canada in a short while. Heather & Co. is seeing that future … She’s getting ahead of some of her competition in this move.” Note what the presumed competition is: Target and other lifestyle retailers. The space in which Indigo operates, according to Campbell, involves interior design and decor. Nowhere do books even enter the equation.

Of course, Reisman may indeed be ahead of the game in her move to reinvent the Indigo brand. A report commissioned by the Australian government’s Book Industry Strategy Group pointed to Indigo as a potential model for Australian bookstores to follow if they wish to remain profitable while confronting the “paradigmatic change” thrown up by the advent of digital reading. An article in the October 4 edition of the Sydney Morning Herald states:

While there was no ”silver bullet” for booksellers, the report singles out Indigo, Canada’s largest bookseller, which promotes books as a ”lifestyle,” not a product. It sells giftware, children’s toys, video games, music, gourmet food, and even flowers and is an example of an independent bookseller leveraging people’s affection for books.

But it seems ever more apparent that Reisman is unconvinced of “people’s affection for books.” Her assertion that Indigo is “transitioning from being a bookstore to being a store that enriches the customers’ lives” leaves aside the notion that books themselves are capable of enriching people’s lives. But given the precipitous drop in the number of books people are actually buying over the counter at bricks-and-mortar bookstores, both large and small, the move to diversify her stores’ product mix may prove to be a wise business decision in the long run. The big-box bookstore model was likely unsustainable anyway, something Gordon Lockheed foresaw in a 2001 article for Dooney’s Café, right around the time that Indigo merged with its then-competitor, Chapters:

What nobody has considered, in the general rush to declare Heather Reisman a culture hero and save Chapters/Indigo, is the possibility that as a machine for selling books and making money, Chapters and its successor doesn’t seem to work. It is becoming painfully obvious that the only real economy of scale Chapters/Indigo enjoys is the muscle it wields in dictating terms to suppliers. From the beginning, Chapters bled red, and there isn’t much evidence to suggest that Chapters/Indigo can make money today …

What was true a decade ago is even more true in the digitally obsessed present. Perhaps a sharp right turn into lifestyle products will alleviate some of the burden from the company’s bottom line. However, it appears less and less likely that books will remain “the heart and soul of Indigo” in the new order of things.

*The other is Starbucks’ CEO Howard Schultz’s Onward, also a Heather’s Pick.

Indigo’s four per-cent solution

December 17, 2010 by · 4 Comments 

Indigo Books and Music, the country’s largest bookstore chain, is planning to revamp their co-op program in the new year, in a way that is sure to ruffle some feathers in the publishing industry. Previously, publishers paid co-op money to the chain in exchange for premium placement on tables or endcaps. Under the new rules, which come into effect on January 1, all publishers will be charged a 4% fee on all titles that sell through at the chain. Unlike the old model, however, publishers won’t necessarily have the ability to dictate where the co-op money gets allocated, which gives Indigo more flexibility to promote titles it wants to sell.

Bahram Olfati, vice president of adult trade at Indigo, recently sent an e-mail to publishers and distributors informing them of the impending changes. Here is the relevant paragraph from the Quill & Quire story:

The question now is: will publishers continue to have a say in store placement? Or will placement be determined entirely by Indigo staffers? In his e-mail to vendors, Olfati stated only that “we will continue to work closely with the publishers to make sure that all new authors and titles needing special attention/promotions receive front of store placement,” and that “all titles of more than 800 units will receive table placement.”

Of course, this puts smaller publishers and mid-list or debut authors at a disadvantage, since Indigo rarely orders titles from these groups in volume numbers. Small publishers are much more likely to see Indigo stores stock one or two copies of their titles, spine out on the shelves.

Publishers in Canada have been understandably reluctant to go on the record about the revamped co-op program, not wanting to adversely affect their relationship with the largest bookseller in the country. However, it is easy to see how many publishers might be uncomfortable with the new scheme, which amounts to a tariff levied on all books sold. Once again, it will be the smaller and regional publisher that will bear the brunt of any pain that the new rules cause: it’s hard to imagine brand name authors from Random House or HarperCollins getting short shrift in terms of placement at Indigo, while it is very easy to imagine this happening to books from Breakwater or Turnstone.

If there is a silver lining to all this, it is that Indigo likely already accounts for fewer sales of small press titles than do independents and regional outlets that will hand sell them in a dedicated way. Still, the change could result in a decrease in the breadth of titles that receive exposure at Indigo locations, which is not heartening in today’s difficult bookselling environment.

Who knows what (and how and where) you’re reading?

December 16, 2010 by · Leave a Comment 

Back in July 2009, readers found that digital editions of two books they’d purchased from Amazon – George Orwell’s Nineteen Eighty-Four and Animal Farmhad mysteriously vanished from their Kindle e-readers. Although it turned out that Amazon removed the books (and credited the affected accounts) because the editions were unauthorized, this episode stands as a cautionary tale about the power e-book retailers have over e-book readers.

That power could be about to expand exponentially. Today, NPR published an article outlining the data that various manufacturers of e-reading devices collect about their users. If the irony of having Orwell’s books erased from Kindle readers is thick, imagine what the author would think of the following:

  • According to Cindy Cohn of the Electronic Frontier Foundation, Amazon can track how fast a person reads by the number of page clicks, and can tell where the reader stopped reading.
  • Bestselling author and president of the Authors Guild Scott Turow says of Amazon’s Kindle: “They could tell you with precision the age, the zip codes, gender, and other interests of the people who bought my books.”
  • Google stores pages from books a reader purchases through its eBooks store to keep track of where the buyer finished reading, but also for “security monitoring” and to police “abusive sharing” of titles.
  • Apple’s iBookstore sends “functional data” back to the company so that Apple can better “understand customers and customer behavior.”
  • Kindles and iPads are equipped with GPS software that allows their manufacturers to track not just what you’re reading, but where you’re reading it.

If all of this Big Brotherish activity strikes a cold note of fear in your heart, you’re not alone. Author Stephen King, who knows something about fear, told NPR, “Ultimately, this sort of thing scares the hell out of me.” And it should. The more society hands over its privacy and information to the digital machine – which increasingly means big corporations trying to sell people stuff – the closer we edge toward a precipice beyond which everything we do is monitored, crosschecked, analyzed, and monetized. Orwell feared that Big Brother would take the form of a totalitarian government; the truth is it may take the form of rapacious corporations collecting minute amounts of data on us to better understand how to enrich themselves at our expense.

Of course, it’s foolish to blame corporations and product manufacturers alone for the current state of affairs. The public at large seems all too eager to allow anyone and everyone access to every corner of their lives. Social media like Facebook and Twitter, and geolocation sites like Foursquare, provide constant updates about a person’s whereabouts, activities, and interests.

This has not gone unnoticed by the folks at Kobo, who are in the process of rolling out a Facebook-linked app called Reading Life, which will allow users to post reading lists to their Facebook pages, along with favourite passages, comments, and reading histories. What caught my eye, though, was a paragraph in Quill & Quire‘s report on the Kobo initiative:

The app isn’t just about cultural sharing, however – it also provides Kobo and other companies with new marketing opportunities. [Michael Serbinis, CEO of Kobo] gave this example: Kobo will be able, via the app, to detect if a particular user reads frequently at Starbucks. If that reader logs a certain number of reading hours at Starbucks, they could be offered a coupon on their next latte. If Kobo users don’t want Facebook to know what they’re reading or where they’re reading it, the app can be temporarily deactivated.

Kobo is quick to point out that Reading Life is an opt-in service – in other words, users have to consciously turn it on for it to work. This would likely be small comfort to the author of Nineteen Eighty-Four, or to the novelist Auldous Huxley, who, in Brave New World, predicted that humans would be all too willing to assist the forces desiring to subjugate them. The uncritical enthusiasm with which users have embraced Facebook, Foursquare, and other social media indicates that Huxley was right. Who can blame Kobo, Apple, and Amazon for wanting to profit off such consumer indifference? The problem is that by the time we realize we’ve relinquished our lives to the machine, it will be too late.

Consider this: in the movie Seven, detectives Somerset and Mills track down the serial killer John Doe by accessing his library records. In that movie, what the detectives do is clearly meant to appear unethical and underhanded. In today’s wireless world, it’s just business as usual.

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