News / Insight

Douglas & McIntyre collapse new sign of publishing industry struggles

Vancouver firm Douglas & McIntyre’s filing for bankruptcy yet another sign Canadian publishing in dire state.

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At 8 p.m. on Mon., Oct. 22, Scott McIntyre received the inaugural Ivy Award for his more than 40 years of excellence in Canadian book publishing. The award was to be presented to McIntyre at the International Festival of Authors.

The stellar event that evening celebrated the finalists in the Governor General’s Literary Awards. As we were applauding some of the most talented writers in our country, it was a fitting time to announce an award for a guy who has published such fine writers as David Suzuki, Wayson Choy, Candace Savage, Carmen Aguirre, Paul Quarrington, Johanna Skibsrud, Charlotte Gill, Andrew Nikiforuk and Wade Davis.

Geoffrey Taylor, director of Authors at Harbourfront, made his way to the Fleck Theatre stage and announced that the Ivy winner had been chosen by a jury of his peers for his “substantial contribution to Canadian publishing.” There was some anticipatory clapping, but McIntyre did not bound up onto the stage in his usual style to accept the award.

Taylor went on to recite McIntyre’s acceptance speech: “I am deeply honoured to have been chosen to receive this inaugural award. Receiving it from a peer group jury as part of the International Visitor’s Programme is a double honour.”

By a sheer sense of irony, which has always played a bit part in the Canadian book business, Douglas & McIntyre was filing a Notice of Intention to make a proposal under the provision of the Bankruptcy and Insolvency Act at about the same moment. Its staff, except for five people who are being kept on while the “process” unfolds, had all been laid off. The letter to authors, and yes, I did receive one, was doleful, with just a little line of optimism at the end about hoping to carry on.

For now, what we have is the shock of losing one of the brightest and best publishers in the country and trying to examine how and why this happened. The loss of the largest Canadian publishing companies over the past decade — McClelland & Stewart (now merely an imprint of Random House), Stoddart Publishing and Key Porter Books — is a harbinger for what we might expect to see in the near future.

Book publishing is a tough business, particularly so in Canada, where our population is small. And the recent shift to digitally downloadable books (as well as the public expectation of free content) has played havoc with the bottom lines even of the large multinationals, such as Random House and Penguin, which as of Thursday were deep in merger discussions.

This rising digital demand together with a shrinking retail book market and the entry of mass marketers and online booksellers, such as Amazon — with its deep discounting and its stiff terms of purchase —means greater pressure on publishers to cut costs.

In Canada, indigenous English-language publishing has always been a “perilous trade,” as Roy MacSkimming put it in his eponymous book. According to Heritage Canada’s last published survey, from 2010, Canadian-owned publishers account for 56 per cent of the publishing sector’s revenues, employ two-thirds of its workers and publish over three-quarters of new Canadian-authored books.

But the competition for established authors, the ability to pay for shelf space, and the deeper pockets for advertising and promotion that U.S. and British companies bring to their subsidiaries here has given them an advantage impossible for indigenous houses to match. They are financed by their parent companies and the distribution of imported books.

That Canadian bankers have generally preferred almost any other business to book publishing has made it difficult to obtain the kind of financing the business needs to invest in bids for big-name authors, advertising and the production of books. Legendary publisher Jack McClelland once noted that our bankers suffer from a singular lack of imagination.

Private capital with a yen for books is difficult to find. Every time I see Scott Griffin, I want to hug him for having bought the House of Anansi Press and being delighted that he has done so. Avie Bennett tired of M & S, and whatever good Mark Scott may have done for Douglas & McIntyre is buried in the tough news we all heard last Monday.

The Canadian market is small, especially compared to that of the U.S. — there just aren’t enough of us up here, so there is never the happy chance of a multi-million-copy bestseller financing gambles on new and untried writers, those who may become tomorrow’s household names.

I remember a discussion with then-federal minister of foreign affairs Lloyd Axworthy some time ago when he suggested we could all sell more books into the U.S. A great idea, except that it is a hugely expensive book market to enter, and for some of what we publish there has never been much interest. We are not a huge world power and our politics, history and personalities simply do not interest our neighbour.

When I started in publishing there were three retail chains. Now we have one. This remaining chain, Chapters/Indigo, has been reducing the relative space for books to make room for, one assumes, more saleable product. There are now many fewer independent book stores, and there is not much room for the type of support they gave to quirky or up-and-coming books or authors at Costco and Walmart, which now account for about 10 per cent of Canadian print book sales.

None of these retailers of books has a viable ebook business, Indigo having sold off its digital subsidiary, Kobo, last year.

Yet, despite all these adverse factors, there are still more than a hundred independent Canadian publishers, testimony to their extraordinary tenacity, talent and business acumen — yes, business acumen. If you can succeed in the kind of environment I have described, you are truly a magnificent businessman.

I have been speaking about English-language publishing. French-language publishing in Quebec has enjoyed a number of government interventions that have guaranteed access to institutional markets such as libraries and universities, and local bookstores have a preferred status in the school market. For Quebec, building strong cultural industries has always been a priority, and it is a belief that has paid off. Perhaps we could learn something from them.

I am devastated about the fate of Douglas & McIntyre and hold on to the last line of their letter to authors offering a ray of hope for their future. “Over forty-one years of publishing, we have discovered and worked with Canada’s finest writers, and we are deeply honoured to have published each of you,” it says. “We look forward to continuing that tradition.”

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