| Deeper into the Emergency |
| by Gordon Lockheed | |
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One of the questions I was asked after the first column on bookselling and book publishing was posted was this one: What’s so great about independent booksellers? Aren’t independent bookstores all grotty little dumps with inadequate stock, limited acquisitions abilities and too-opinionated owners who forget the title of the book you’ve asked for because they’re enumerating their own head-of-the-pin obsessions? I dropped that question in front of several booksellers and publishers, along with the text of that first column, and what follows is my interpretation of their composite answer. The place to begin, it turned out, was to consider why the stock in the independent bookstores still standing looks so sparse these days. In the Code of Conduct, "imposed" on Indigo/Chapters by the Competition Bureau as a condition of its approval of the hostile takeover of Chapters by Indigo, is a quasi-judicial demand that Indigo/Chapters pay their suppliers "in 110 days", no matter what the payment terms on their suppliers' invoices say. Normal practice, as in other retail/wholesale transactions, is that payment for goods supplied is due 30 days from invoice date, or the 30th of the month following. Since books are sold in the Canadian retail trade on a returnable basis (any and all booksellers can return, for full credit, anything they bought from any publisher, not before 90 days, and not after one year, from the invoicing date), a 110 day payment term accorded to Chapters/Indigo has implications very few people have thought through. That includes, methinks, the Association of Canadian Publishers, the Canadian Booksellers Association, and the Federal Competition Bureau. By conceding to Chapters/Indigo these terms, the Competition Bureau has legally mandated a structural change in the way Indigo/Chapters does business in Canada. It has changed from a business that obtains books for sale by the normal procedures outlined above, to one that is able to obtain the books it sells purely on a consignment basis. This is because Indigo/Chapters is now obligated to pay for books 110 days after invoice date: twenty days after the date on which they can return unsold books—i.e. 90 days after invoice date. Any book Indigo/Chapters doesn’t sell within 90 days can be theoretically returned to the publisher before it is obliged to pay for it. Because of the mass merchandising practices employed by the Superstore concept, this is often what happens. Now, cynical people will say that this is better than not paying bills at all, which was what Chapters was doing before the takeover. The theory behind the Chapters/Indigo deal, apologists will argue, was designed to save not only nearly-insolvent Chapters, but a sizable number of Canada’s publishers, to whom Chapters owed (and still does) an undisclosed but clearly enormous past-due figure. It’s a lot clearer to me that terms given Chapters/Indigo will stabilize Chapters and help Heather Reisman service the debt load created by the takeover of Chapters than whether it will help the on-the-ropes publishers, who will still face an 80 day gap between their payables and their receivables for 70 percent of their sales production. This new practice also puts the independent book-sellers in a double bind. First, they have to operate at a competitive disadvantage created by the larger publisher’s discounts given to Chapters/Indigo and by the terms-of-payment advantage conferred by the Competition Bureau. Second, their suppliers, the publishers and distributors (who are themselves under the same pay-in-30 constraints normal throughout the business world from Thus the Competition Bureau has actually made things worse for the few remaining Independent booksellers by forcing them to a 60-90 day risk capital outlay in order to obtain books while their major competitor doesn’t have to risk a cent. On top of that, if and when the independents do return books that aren't selling, they can’t get their money back. Under publisher’s terms, they can only get credit for more purchases. The Competition Bureau’s ruling not only leaves Indigo/Chapters free to keep its risk capital. It is also free to do whatever it wants with it. It isn’t even bound to continue its role as a bookseller, should its shareholders choose at any time to sell something else. This includes selling itself, in the form of shares, inside or outside the country. Whatever happened to the ‘level competitive playing field’ here? The created difference may seem subtle at the level of cost accounting, but most of its sociopolitical and implications are both profound, pervasive and likely to become still more pervasive. Talonbooks publisher Karl Siegler, when I asked him, a few days after the first column was posted, to give me his sense of what those implications are, provided the most far-reaching—and chilling—reading of the situation. Siegler left the Association of Canadian Publishers in 1998 over its original stance toward the emergence of Chapters, and has long been the Canadian publishing industry’s most articulate advocate of a strong and independent Canadian cultural sector, and its clearest and most courageous critic on the dangers of having a single bookseller controlling the publishing and selling of books in Canada. "Embedded in the structure of the Competition Bureau’s terms for the takeover of Chapters by Indigo," he told me, "is the new global ideology called monetarism, wherein cash has lost its metaphorical, representative or surrogate nature—has been de-virtualized—and has itself become the commodity on which the standard of all value is anchored, replacing all previous ‘standard’ commodities, like salt or gold—or books. This de-virtualization of money has in term, produced its opposite—the virtualization of the physical world and all of its commodities. It has also virtualized the value of physical commodities, which are now floating, mostly downwards, the way money once did. Among the new ‘currency commodities,’ the American dollar is the most valuable and stable, becoming the "standard" commodity against which all other currencies are ‘valued’. It is this complete virtualization of the physical conditions of our being in the world, and the accompanying removal of all standards of value derived from our specific relations to the particular physicalities we encounter in our world, that has caused the world-wide protests against what is misperceived as ‘increased globalization.’" But that's another article, and by another author. What I see occurring in the here-and-now between Chapters/Indigo and the independents has to do with our public perception of what idiosyncrasy and asymmetry mean. And given that the alternative to them seems to be supermarket aisle after supermarket aisle stocked with the intellectual equivalent of WonderBread, maybe we ought to be rejigging both our understanding of, and tolerance for, idiosyncrasy. The Chapters/Indigo superstores seem to be convenient and cheaper, and pretty much the same way that WonderBread once did. But a lot of people have come to understand that WonderBread isn’t really convenient or cheap in the long term. Oh, sure, you can get WonderBread everywhere, and it’s cheaper than other breads. But it tastes like chalk, makes your other food taste the same, and you can literally starve to death if you eat nothing else. Enough people seem to have learned this during the dictatorship of the Supermarkets in the decades after the Second World War that a vibrant and profitable counter system of public markets and specialty food retail has emerged since 1980 as an alternative to supermarkets. In a lot of other sectors of the economy (as we now parcel up human reality) similar recognitions have made us take a deeper measure of what things cost us. Yet with books, we’re still stampeding to Chapters/Indigo on the promise we’ll be given more choices at better prices. It is a useful exercise to examine some of the shortcomings of the merchandising behemoth that is replacing all those funky little independent bookstores. The first thing we need to recall is that both Chapters and now Chapters/Indigo, which already retails 70 percent of books in Canada are publicly traded companies, which means that they are and will, by definition, be profit driven at the level of every single book title stocked. What that means, once we cut out the rationalizations and sales pitches, is that publicly-traded corporations can’t afford even a modicum of civic responsibility in their stock ordering and holdings because their ultimate responsibility is to their shareholders. They will fill their stores with the imaginative and intellectual equivalent of WonderBread—or with Mein Kampf if that’s what will turn the greatest profit. If corporate-owned bookstores do make any editorial judgments in selecting books, they will naturally lean toward the culture they operate in: big and corporate is good: small and independent is irrelevant unless it dresses up in folk costumes. Even then, it gets stuck on the back or lower shelves out of the serious traffic along with the poor folks and the homos and everything else that doesn’t respond typically to the pasty white core of the lowest common denominator. At the beginning of the 19th Century Stendhal’s "Happy Few" were those dedicated readers of books free enough to be capable of disinterested intellectual judgment and the occasional well-spotted purposeful suspension of disbelief for the purpose of imagining a better world than the one they were in. But the "Happy Few" has morphed in the Chapters/Indigo universe into wealthy people who like to read long strings of black numbers in a corporate bottom line—and rarely bother to enter a bookstore, notwithstanding Chapters/Indigo’s CEO Heather Reisman’s much publicized reputation as a "lover of books". I don’t want to seem to be framing my argument for independent and small in moral terms, because I don’t see it as good-versus-evil. In a democracy self-interest is permissible behavior, and Chapters/Indigo has every right to pursue its interests. But that said, we need to distinguish that with no responsibility or inclination to inform, educate or enlighten the general public—and with an overwhelming need to bathe their shareholders in profits, a corporate-owned bookstore like Chapters/Indigo isn’t likely to give much consideration to non-corporate book publishers unless the little guys can offer even deeper discounts than the corporate-owned publishers do with their longer print runs and better economies of scale. It is the capacity to exercise civil responsibility in the choice of book titles offered that makes most privately-owned bookstores elements of a diverse cultural fabric that isn’t inevitably defined by near-term commercial considerations. They are, as such, much more likely to be responsive—and responsible—elements of the public education system as well as the economy than a Superstore book chain is capable of being. The same has been true for twenty-five years of Canada’s small regional publishers. During that quarter century they’ve served as the incubator for Canada’s writers, and the diversity and quality of the good ones is their accomplishment far more than it has been that of the major commercial publishers. In the last decade or so the regional and independent publishers have become more a farm system than they once were, but that doesn’t diminish their importance, or their actual impact. We’re all better off for having them, including in the economically quantifiable ways. Culture is a major component in a contemporary capitalist economy, and what we don’t produce ourselves we have to buy off other people. Print-based writers may be near the bottom of the income pyramid, but they’re cornerstones of the cultural economy because nearly all of it has to be written before it can be filmed, televised, or turned into merchandise widgets. Beyond that, the productivity of a country is tied to the precision of its understanding of itself and its productive contexts. American cultural products and values will teach our children to be in the world as second hand Americans, and they’ll convince us all—children or otherwise—that we’re second rate Americans. They’ll also, probably, make us poor Americans, too. Better, in even the most loony terms of business, to be on top of—and knowledgeable of—the games we’re best able to play on the basis of our own understanding and analyses, and using images that are precise and local. And that’s the element of public education a healthy indigenous cultural sector alone can provide. There’s something else. Monopolies (or more precisely, Monopsonies—organizations that exercise market dominance from the position of a buyer rather than as a seller)are bad in a democracy, and the 70 percent market share held in Canada by Chapters/Indigo constitutes a clear case of market dominance. Chapters, with its market share and its aggressive book buying approaches was already helping to reframe the cultural landscape of Canadian publishing and bookselling to the now-familiar values of globalization wherein the big and usually corporate players at the market centre in Toronto held a huge advantage that left the small or regional publishers with scraps and dregs. It is likely, for instance, that whatever aid package the Federal government works out for Reisman to clean up the mess created by Larry Stevenson’s deliberate competition-busting overexpansion of Chapters will go directly to Chapters/Indigo with a trickleback to the publishers coming in the form of having "paid" stamped on invoices six months to a year after they’re due. This will in turn might trickle back further to the regional and independent publishers who are distributed by companies like Stoddart and General. In some cases, it begins to look like the aid—which absurdly merely means returning to a poor approximation of normal and fair business practices every widget manufacturer in the country thinks is a God-given right—will be too little and way too late for a number of small publishers. Canada’s independent publishers, in other words, are being wacked by Chapters/Indigo the same way independent bookstores were a couple of years ago, and it will have even less to do with survival of the fittest and the biggest. There’s more to this, and I want to emphasize it in case it got buried in the detail of other arguments. Under the terms of the Competition Branch agreement worked out between the Federal Competition Bureau and Chapters/Indigo, Heather Reisman will be free to bring in foreign ownership simply by selling shares to her old buddies at Borders, or wherever, and there won't be a damn thing that the government of Canada can do about it. In the "new economy" that the Government of Canada has proven itself so eager to embrace, "publicly traded" means "globally traded" as a first condition. Will this happen? I think so. If there was any unanimity in opinion among the publishers and booksellers I’ve spoken to for these columns it is over the likelihood of Chapters/Indigo being able to solidify its shaky financial situation by downsizing to 60 superstores. Almost no one believes this is going to work. Some of my informants believe the Canadian book market can handle no more than 20 of them, while others thought the likely number of profitable outlets might be 30. No one thought the number could be much higher than that. What’s currently demoralizing to the independent publishers is that while Chapters/Indigo goes through the charade of offering a few of its least profitable locations for purchase prior to an inevitable downsizing—and the independents starve to death because their distributors can’t pay them and no bank will offer them interim financing—it took the Feds just a few weeks to cough up a $75 million loan guarantee plus a $3.5 million grant to keep Canada 3000 afloat in the aftermath of September 11th. "What," my original informant for this piece said to me last week, "does Canada 3000 do for Canada aside from providing Air Canada with a smokescreen for its de facto monopoly?" He’s right. But whether it’s more important to have an in-country alternative for flying vacationers to and from Caribbean holidays than to have an indigenous book publishing industry located in diverse centres across the country is no longer a rhetorical question. We have a Federal government that clearly doesn’t see it that way. It’s time those of us concerned with the cultural sector and the Arts stopped thinking the value of culture as we’ve known it is apparent to everyone—especially to our elected representatives—and started actively defending our interests with more energy and courage. 2745.w posted November 8, 2001 Only registered users can write comments. Powered by AkoComment Tweaked Special Edition v.1.4.6 |
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