How to survive the perilous publishing trade, where bookselling equals gambling

Ira Wells is an Associate Professor at Victoria College in the University of Toronto.

For centuries, cultural consumers have assumed that art is the product of cosmopolitan centres. Most urbanites don’t think of our culture as something imported from the hinterland, along with our grain and hogs. Or, in the case of Windsor, Ont., our cars.

So when Dan Wells founded book publisher Biblioasis in Windsor, many expressed skepticism. “Nothing of any importance in the history of publishing has ever come from a place like this,” was the typical refrain, he recalls now.

Indeed, Windsor, a city of about 230,000, is best known as a hub in the automotive industry, and not as an exporter of culture, in any form.

“You’d say you were from Windsor, and you could see the recoil,” Mr. Wells, a long-time Windsor resident, said. According to conventional prejudice, Biblioasis should not exist.

While location seemed to be one strike against Mr. Wells, Canadian publishing has always been risky, as historian Roy MacSkimming reveals in his book about the industry, The Perilous Trade.

By the time Biblioasis launched in 2004, the Canadian book industry was well into a period of market consolidation, in which six foreign-owned multinationals controlled a vast majority of the market. In 2011, one of those giants, Random House, acquired the storied Canadian press McClelland & Stewart; two years after that, Penguin merged with Random House, turning the “Big Six” into the “Big Five.”

And while Penguin Random House failed in its 2022 bid to acquire Simon & Schuster, the trend toward industry consolidation has continued, with the private equity firm KKR buying Simon & Schuster for US$1.62-billion in 2023. Today, Canadian-owned publishers represent 4.8 per cent of book sales in Canada.

Because our market is inundated with imported books, Canada is “one of the toughest markets to publish into in the English-speaking world,” according to David Davidar, former publisher of Penguin Canada. As the Canadian market has contracted over the past 25 years – annual operating revenue fell from $2.4-billion in 2001 to $1.6-billion in 2022 – the country’s independent publishers are forced to compete for market share with multinational corporate behemoths with deeper pockets.

For corporate giants and indies alike, publishing is akin to gambling, for the simple reason that even the most experienced publishers and editors can’t predict what will sell. For every brand-name author in the world of fiction trade publishing – Danielle Steel, Stephen King or Margaret Atwood – there are many more with maddeningly inconsistent sales. Conventional wisdom holds that just 25 per cent of books make back the authors’ advance against earnings.

Total revenue reported by English-language publishers of the Canada Book Fund (the government program that subsidizes Canadian-authored books) declined by almost $46-million, or 14 per cent, between 2009 and 2020, according to a 2021 report.

Meanwhile, profitability is razor thin. “Publishing and bookselling margins are among the tightest of any industry around: often 1.5 to 3.5 per cent, thereabouts,” said Mr. Wells. “Ours tend to be somewhat better, depending on the year.”

Despite all of the challenges roiling the industry, Biblioasis is celebrating its 20th anniversary this year. Its location – more affordable than any big city and a short drive from the U.S. border – along with its DIY spirit, has seen the company buck industry trends, offering insight into surviving, and by some measures thriving, in the perilous trade.

In the early days, Mr. Wells may have been hyper-attuned to preconceived notions about Biblioasis’s city of origin. But things have changed.

“Certainly, when I went around the book festival circuit in Canada last year, I would regularly hear Dan described as a genius,” said Stephen Marche, author of the Biblioasis title On Writing and Failure and many other books. “It’s my impression that most small- to medium-sized publishers in this country are trying to figure out how to imitate him. The smart ones, anyway.”

Financial information on the Canadian independent publishing industry is notoriously difficult to find, as private companies are not required to report their results. For their part, Biblioasis sales have been between $900,000 and $1.25-million per year since 2019-20, according to Mr. Wells. At the Biblioasis Bookshop, which Mr. Wells opened in 1999 in Windsor, sales are between $375,000 and $425,000 annually. Total corporate revenue (which includes grants and rental revenue) is regularly between $1.9-million and $2.2-million per year.

Biblioasis is far from the biggest independent publisher in Canada, a category that includes ECW and the House of Anansi, both based in Toronto. But not only have these big-city publishers been around much longer, both are affiliated with children’s publishers (Annick and Groundwood presses, respectively), which significantly bolster sales. Greystone, a Vancouver publisher that traces its history to 1971, probably the largest of the indies, also publishes children’s literature.

The young upstart Biblioasis, by contrast, publishes mostly adult literary fiction, a genre that accounts for just 2 per cent of the market. In this overall context, their success has been remarkable. “Biblioasis has achieved growth and scale in a way that few of their contemporaries have been able to match,” said Jack Illingworth, executive director of the Association of Canadian Publishers. That growth reflects both “publishing intuition and shrewd business decisions,” Mr. Illingworth said.

Of course, success in publishing is measured also in terms of cultural impact. Biblioasis has now published more than 400 books, including prestigious titles such as Alexander MacLeod’s Light Lifting (the press’s first Giller Prize shortlisting in 2010), Anakana Schofield’s Martin John (a Giller finalist in 2015), Britain’s Lucy Ellmann’s Ducks, Newburyport (shortlisted for the Booker Prize in 2019), and Mark Bourrie’s Bush Runner (winner of the $30,000 RBC Taylor Prize for literary non-fiction in 2020). In March, the press’s The Future, an alternative, dystopian history of Detroit by Catherine Leroux, was voted Canada’s must-read book for 2024 on CBC’s Canada Reads.

Readers may not care which award-winning book belongs to which publisher, but it matters tangibly, Mr. MacSkimming said. “Winning major awards can raise a publisher’s profile and stature in the industry,” he said. In ways that are hard to quantify, attention and prestige translate into sales. “The multinationals in Canada” especially Penguin Random House and HarperCollins, “scoop a lot of the awards and the profits thereof,” Mr. MacSkimming added.

While most books never make money, successful ones can generate much greater reward than other products with fixed consumer prices. Once the costs associated with writing, editing and designing a book have been covered, the per-unit revenue rises, which is why one successful book can subsidize four or five unprofitable ones.

The Big Five publishing companies, more invested in their quarterly earnings than in abstract notions of Canadian literature, focus their vast resources on a comparatively small number of blockbuster titles. Small and mid-sized publishers, by contrast, tend toward smaller print runs of a wider variety of writers. They also tend to sell directly to consumers via their websites (or, in Biblioasis’s case, their brick-and-mortar store), while the conglomerates do most of their business through Amazon.

It’s a tricky business, and there’s a certain irony in Biblioasis’s success at it. For years, Mr. Wells downplayed the fact that he was based in Windsor. Twenty years on, however, the company’s location seems more like a crucial launchpad for its success than an impediment to be overcome.

One factor was the price of real estate. Mr. Wells bought the Biblioasis Bookshop’s current Wyandotte Street location for $160,000. His 9,000 square-foot warehouse-office combination, in the central part of the city, cost $350,000. Comparable locations in Toronto might run him $2-million and $8-million today, respectively.

Biblioasis not only owns its buildings but generates revenue from real estate (by renting out part of its warehouse), in addition to its publishing activities. Manageable mortgages also meant that Biblioasis could invest in its product and take artistic risks. Ducks, Newburyport, for instance, is a challenging, 1,000-page novel unspooled in a single sentence. The book was far from a sure-fire win, but Biblioasis believed in it.

In the end, on the back of major prize nominations and rave reviews in The New York Times and elsewhere, Ducks, Newburyport has sold 50,000 copies (and counting) and became the press’s bestselling novel.

“If I was in Toronto, where my margins were even thinner, I probably couldn’t have justified the gamble,” Mr. Wells said, but operating out of Windsor, “the weight of failure isn’t as desperate. Because less of our money is going to overhead we can take risks on experimental or international work that publishers in the centre can’t.”

Lower real-estate costs also mean more money to pay staff, who, in turn, enjoy a lower cost of living than they would in Toronto. Biblioasis employs the equivalent of 13 full-time workers between the bookstore and press. (Canadian small- and mid-sized publishers had an average of 2.6 and 15.4 full-time staff, respectively, in 2021, according to BookNet Canada).

Windsor’s proximity to Detroit, meanwhile, brings major economic advantages, especially the U.S. Postal Service’s economy shipping for books. Mailing a book from Ontario to California costs as much as $25. The same book can be shipped to California from Detroit for around $5.

That’s even less than the cost to ship a book from Windsor to somewhere else within Canada., Mr. Wells said.

With the company’s ready access to the border, Biblioasis can blanket U.S. booksellers and media with Biblioasis titles. As a result, its books are often reviewed in The New York Times, The Wall Street Journal and other venues across the United States – bringing Canadian authors to the American books market, which is approximately 10 times the size of our own.

The financial impact of that cannot be overstated. In five of the last six years, Bibioasis’s American sales have been higher than its sales in Canada, “which is almost unheard of for a smaller literary press,” Mr. Wells said. “We are profitable because of our American sales.”

Those American sales form the bulk of Biblioasis’s international sales, which since 2017-18 have been between 40 and 60 per cent of revenue, according to Mr. Wells.

“This year it might be on the lower end of that,” he adds, “in part because it’s going to be our best year in terms of Canadian sales in our history – owing, in part, to the recent Canada Reads win.”

But even the lower end of that range of international sales is still considered high, for an industry in which 31 per cent of gross revenue came from international markets, according to a 2021 report from BookNet. Most domestic publishers simply don’t make much overseas.

Nor can Canadian publishers – 65 per cent of whom made less than $1-million in revenue in 2021 – compete with the multinationals in purely business terms. Since the CanLit boom of the 1960s, and despite the best intentions of various federal governments, Canada has failed to develop a stable domestic book publishing sector.

“The level of demoralization among Canadian publishing workers is extreme,” Kwame Scott Fraser, the outgoing publisher of Dundurn Press, recently observed. The overall industry has been tanking for a long time. More than 80 per cent of Canadian writers live below the poverty line, according to the Writers’ Union of Canada, which called the situation “a cultural emergency for Canada.” Writers and publishers understand that their economic precarity is an accurate benchmark of the degree to which Canadian society values literary work.

“Canadian capitalism tells us every pay day what Canadian culture is worth.”

In many ways, Canada’s publishing industry is still fighting to survive. Increasing paper costs have driven up the price of printing (and of books – the average hardcover costs $5 more now than it did in 2015). Indigo, Canada’s largest bookseller, is holding on after several disastrous years, but its fate remains uncertain.

In addition to their marginal profitability, most presses are undercapitalized, are at or near their borrowing capacity and can’t fund strategic investments, according to Heritage Canada.

Readers’ attention, meanwhile, is split between more books than ever. “Last year, 847,477 ISBNs were reported in Canada,” Kenneth Whyte recently noted in ShuSH, a newsletter covering the publishing industry. “In the course of seven years, Canadians were confronted with 27 per cent more choices and chose to buy 7.6 per cent fewer books.”

Amidst these dire financial circumstances, Biblioasis is swimming against the tide. For all the strength of its publishing list, it is not immune to the bleak industry trends that befall big and small publishers alike.

Nonetheless, over two decades, Mr. Wells has demonstrated how the future of Canadian publishing could find success in places such as Windsor – to the benefit of bibliophiles everywhere.