7.0 Conclusion
This study has described a system of book distribution in Canada's English-language market that, while it has been reasonably stable, has experienced a general tightening in recent years—particularly in the wake of the collapse of General Distribution Services in 2002 and the increasing concentration in Canada's book retail channels.
In a marketplace with relatively little overall sales growth, downward pressure on book prices, and rising costs, the emphasis has ever more been placed on controlling costs and on achieving the greatest possible efficiency and economies of scale throughout the book supply chain.
These factors have shaped a book distribution system in Canada's English-language market that has achieved some real performance and efficiency gains in recent years. At the same time, they have influenced a system that has been characterized by rising distribution costs for publishers and more rigorous inventory management, and where the majority of the country's distribution capacity is devoted to the relatively more profitable lines of the largest domestic and imported publishing lines.
For the moment, the end result is that the larger publishers in the marketplace—particularly those with annual sales above the $500,000 threshold—have relatively effective access to the mainstream channels for book sales in the country. These channels include bookstores, online booksellers, and a small number of established mass market accounts, such as Costco. Those below the half-million-dollar threshold have fewer distribution options, and may have limited access to this “book system”—that is, to the prominent sales channels through which the majority of books are currently sold in Canada.
Looking forward, we expect that the mainstream book market in Canada will continue to concentrate market share among the nation's largest retailers, both large chain bookstores, online booksellers, and mass market retail outside of the bookstore category. This concentration of consumer book sales among a relatively small field of major retail chains will in turn continue to reinforce the very important role that large-scale distributors play in the supply chain.
The country's largest publishers will continue to have a dominant position in these channels, and smaller firms will likely increasingly collaborate through distribution collectives in order to achieve an operating scale that allows effective access to nation-wide distribution.
We also expect, however, that the conventional understanding of Canada's mainstream book system will expand in the near future due to the following:
- Given the limited growth available in established sales channels, larger publishers and distributors will pursue sales growth through alternate channels, including a greater emphasis on non-traditional retail accounts, direct-to-consumer sales, and digital distribution.
- Due to the persistent challenge of accessing mainstream national sales channels, smaller publishers will be compelled to pursue sales growth in many of these same alternate outlets in order to better capitalize on some of their natural strategic advantages, such as a focus on a particular region of the country or editorial niche.
In this sense, the book market is likely to become increasingly diffused outside of the traditional retail channel as Canada's book supply chain expands to serve these new customer accounts. The additional diversity that this shift suggests will bring new challenges for publishers and distributors alike. It may also provide an opportunity for a greater selection of Canadian-authored titles to reach a wider audience, and, in so doing, may represent an important counterpoint to the structural advantages that books published by large, foreign-owned publishers currently enjoy in the Canadian marketplace.
Regardless of how the supply chain develops in the years ahead, it is clear that the establishment and management of effective, affordable sales and distribution systems will remain a critical aspect of publishing in Canada, and a key function in ensuring a diverse selection of books for readers throughout the country.