A very grave prognosis

A very grave prognosis PAUL AUDLEY I wish I felt that I could say all the necessary things about the state of Canadian publishing clearly, in the best order, and in the next twenty minutes. But obviously I cannot and the people who planned the conference know I cannot. That is why we are here for two full days. What I want to do is to describe briefly what is happening in book and periodical publishing in Canada and to argue that, however complex the details of the industry may be, there are quite clear and simple underlying problems. Then I want to look in more detail at these problems in book publishing and at various policy alternatives for dealing with them. In both book and periodical publishing there has been a substantial decline in the share of the market taken by Canadian publications . Canadi,an magazine circulation has declined steadily from 28.8% of total magazine circulation in 1950 to 15.2% in 1974. Since 1966 Canadian books have gone from 38% of total sales to, in 1974, only 17%. Most of the decline in sales of Canadian books has, of course, occurred in the educational market. In periodical publishing the strength of Time and Reader's Digest has continued to increase. In 1959 they took 43 % of total advertising revenue received by major consumer magazines in Canada; in 1969 they took 56%. The annual circulation of Time and Reader's Digest now accounts for 22.8% of total magazine circulation in Canada up from 10.4% in 1950. Time and the Digest now outsell annually by a substantial margin all the Canadian magazines put together. Foreign-owned firms are also dominant in book publishing; 24 of the 32 companies with sales in excess of $1,000,000 are foreign-owned as are 13 of the 17 companies with sales of over $3,000,000. Of the eight Canadian firms with sales of over $1,000,000, one company, Harlequin, sells mainly books Journal of Canadian Studies by foreign authors with its larg·est market outside Canada, and a second company, the University of Toronto Press, is a non-commercial company. Of the remaining six companies , three depend for over 75% of their income on sales of imported books, two carry a heavy debt burden and operate on the basis of government-guaranteed loans. The remaining company is the once Britishowned Macmillan, now owned by MacleanHunter . An estimated 84% of the sales volume of book publishing firms in Canada is generated by foreign-owned subsidiaries. Let's turn to magazines for a moment. The basis of Time's and Reader's Digest's stren9th is that they get most of their content from the parent magazines. The O'Leary Commission estimated that the Canadian edition of Time paid less than 2 % of the actual preparation cost of the material the magazine gets from its parent company. In the case of the Reader's Digest less than 5% of the actual cost is paid. Eight years later the Davey Committee argued that "If Time and Reader's Digest are allowed to maintain their present competitive advantage, it will become increasingly difficult for existing magazines to survive, and for new ones to be launched." It must be noted that the competitive advantage Time and Reader's Digest possess would be just as great if they were Canadian-owned and had access on the same terms to the U.S. content they now contain. The same competitive advantage exists for foreign-published books. As the Royal Commission Report on Book Publishing observed, "the economies of scale possible for original Canadian publishing and original American (or British) publishing are weighted heavily in favour of the foreign product." The simple fact is that the book industry in Canada is organized around foreign publications and the vast majority enter Can,ada via foreign-owned subsidiaries. As noted earlier an estimated 83% of the books sold in Canada are foreign publications or adaptations of foreign publications. And, in 1973, 3 only about 10% of all these books entered Canada via Canadfan-owned f.irms. American-owned firms now constitute an estimated 77% of the publishing industry...