From The Canadian Press
VANCOUVER - Book publishing is a tough business at the best of times, but as the loonie remains about par with the U.S. dollar, Canadian publishers need to find new ways to reach their market, says Carolyn Wood, executive director of the Association of Canadian Publishers.
Wood estimated the industry has historically operated on a three to four per cent profit margin.
"It's not really what you'd call a licence to print money. People by and large are in the business for reasons other than material gain," Wood said Wednesday in an interview.
"They like to make a profit, they pay their bills like everyone else, but like people in all cultural industries and arts sectors its generally not mostly about the money."
However as the Canadian dollar has risen over the past year, publishers have been squeezed.
"Canadian book publishers, more and more in the last 10 years have become exporters and like all exporters they suffer when the U.S. dollar drops," Wood said.
One of Canada's best known publishers, Raincoast Book's, the Canadian distributor and co-publisher of the Harry Potter franchise announced this week it would be shutting down its publishing arm.
The Vancouver-based company cited the rise of the Canadian dollar compared with the U.S. dollar as a key factor in its decision to make this spring's publication of 15 books its last.
However, Raincoast will maintain its core business as a book distributor. Helped by the windfall from Harry Potter, Raincoast was able to build a world-class logistics system.
Key to Raincoast's success has been its ability to partner with travel guide giant Lonely Planet, U.S. publisher Chronicle Books and Bloomsbury PLC.
"What's happened at Raincoast is one outcome of many factors that affect all Canadian publishers and each publisher responds differently because they have different business objectives," Wood said.
Canadian book publishers and sellers have faced sharp criticism in recent months as the Canadian dollar has traded near par with the U.S. currency, while the Canadian price printed on many books remained higher than the U.S. price.
Wood said a direct comparison isn't fair.
"People think because the dollars are equal and because they're called a dollar, prices should be the same in Canada and the U.S., but they are different markets in all respects."
She pointed to the higher cost of operating in Canada as one of the reasons.
"Our population is so spread out, so it costs more to service the market, it costs more to ship and you're shipping books to fewer people across by and large longer distances.
However Wood wasn't ringing any alarm bells for the Canadian book publishing industry.
"I challenge anyone to find businesses that do more with less," she said.