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Analysis
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Industry concentrated in Ontario and Quebec
The Canadian book publishing industry is dominated by firms in Ontario and Quebec. Collectively, they accounted for 91% of industry operating revenues in 2006: Ontario's share was 63% and Quebec's 28%. These two provinces also accounted for 95% of industry operating profits. British Columbia was the third largest contributor, generating 6% of industry revenues, followed by Alberta at 2%.
Ontario and Quebec were also home to all of Canada's foreign-controlled book publishers. Although small in number, their share of industry operating revenues rose to 41.7% in 2006 from 40.4% in 2004.
These foreign-controlled firms were also more profitable, despite being ineligible for the subsidies and tax credits available to Canadian-owned firms. In 2006, the operating profit margin for foreign-controlled firms was 13.3% compared with 8.1% among Canadian-owned firms. In all regions outside Ontario and Quebec, industry operating profits were less than the dollar value of grants, subsidies and tax credits.
The 10 largest book publishers earned 62% of industry operating revenues in 2006, up marginally from 61% in 2005.
Results in the remainder of this release are based on establishments whose combined revenues accounted for about 95% of the industry's total revenues in 2006 and 91% in 2004, the last year for which industry-specific characteristic information was collected by the survey.
Varying dependence on own title and agency title sales
The Canadian book publishing industry earned three-quarters of its operating revenue from domestic sales of the publishers' own titles and their exclusive agency titles (titles published by another firm for which the agent has purchased exclusive distribution rights).
Exports of books and other foreign book sales contributed an additional 12% in 2006. Other sources of revenue for book publishers include grants, sales of rights, book wholesaling, and marketing and fulfillment services.
Sales of publishers' own titles in Canada generated $943 million in 2006, with textbooks accounting for 48% of the total, up from 46% in 2004. Trade books (adult fiction and non-fiction) made up 44% of domestic own title sales with children's books accounting for the remaining 8%.
Exclusive agency book sales by publishers in Canada were also a significant source of revenue, generating $559 million in 2006. Of this total, trade books represented 40%, textbooks 38% and children's books 22%.
Children's books were the only category in 2006 in which publishers earned more from sales of exclusive agency titles ($122 million) than from own title sales ($75 million).
In comparison with foreign-controlled publishers, Canadian-controlled publishers earned greater shares of title sales in Canada from sales of their own titles, and less from exclusive agency titles. For foreign-controlled book publishers, own title sales represented 47% of their title sales in Canada in 2006, while the share for Canadian-controlled publishers was 78%.
Note to readers
Data for the Survey of Book Publishers are collected using a sample and represent approximately 95% of total revenues earned by the book publishing industry. Administrative data are used to account for the smallest firms.
The survey collects financial data on an annual basis and industry-specific characteristic information in alternating years, including 2006.
Data for 2004 and 2005 were revised.
The survey frame is based on a central Statistics Canada database of businesses that have been classified through the use of the North American Industry Classification System (NAICS). Self publishers, vanity publishers and print-on-demand publishers were not previously considered as book publishers, but have been included in the survey according to NAICS since 2004.
In addition, exclusive agents are included in the survey only if their revenue from book publishing exceeds 10% of their total revenues, while pure exclusive agents are excluded. Comparisons should not be made between results of this survey and the former Survey of Book Publishers and Exclusive Agents (conducted prior to 2004) due to differences in survey frames.
Book publishers are establishments primarily engaged in carrying out various design, editing and marketing activities necessary for producing and distributing books of all kinds, such as text books; technical, scientific and professional books; and mass market paperback books. These books may be published in print, audio or electronic form. Some publishers also act as exclusive agents.
Exclusive agents distribute and sell works (agency titles) published by another firm, by acting as its sole representative.
Canadians still buying books
While factors such as the availability of free information on the Internet may have affected Canadians' willingness to pay for content, evidence from the Survey of Household Spending suggests book publishers may be faring better than other corners of the publishing industry.
In contrast to steady declines in household spending on newspapers, magazines and periodicals, average household spending on books rose from $86 in 1998 to $111 in 2005. In 2006, it had eased to $108.
Residents of Alberta, British Columbia and Ontario were the most avid book buyers, as spending on books exceeded the national average in all three provinces.
