Canadian book industry is dying

Unless Canada's Greatest Government (TM: PM Harper) steps up to the plate with some ideas, the Canadian Book Industry is going to die a painful death.

Just today Raincoast Books announced that they will get out the book publishing business. The high dollar and disappearing margins can only be experienced for so long before you give up the ghost, I guess. They are not the first publisher to quit recently and they will not be the last.

The whole writing industry in the final throws due to government action and inaction.

When the dollar rose to parity and beyond, what did CGG Minister Flaherty do? Rather than finding out where the discrepancy in cross border pricing was, he demanded that Canadian retailers slash their prices, regardless of their cost! Silly Minister.

The problem with book pricing is at the publisher level of the chain.

I am a writer. I have a number of books in print. I do not control the selling price of the books, the publisher does that. I know that the retailer gets a 40% discount from the publisher and that I get about 10% for doing all the real work so that leaves 50% for the publisher. But here is where the problem arises.

The publisher sets the retail price at whatever he thinks the market will bear. He could sell my book to a retailer in New York for $10 but turn around and sell the same book in Ontario for $14. Doesn't sound like a problem until you factor in the margins for retailers. The US retailer can sell the book for $14 but the Canadian retailer must sell it for $18 just to make the same $4 as the US counterpart. If you demand, as did Flaherty that the Canadian retailer reduce his price to match the US retailer then the Canadian retailer just lost his margins and will probably go out of business or make up the lost margins selling X-rated videos (which I am led to understand have great margins and the government steers away from talking about them).

The dollar is a sh*tkicker for Canadian exporters but when you combine it with bonehead statements from Ottawa, it can hurt importers also, especially in an industry like publishing, where regulation is a joke.

But let's not stop there. Tomorrow we will take a look at how the media industry is killing the news.