In L.A. they have road rage. In Toronto, it's book rage. That's the term the Globe and Mail gave to book customers in Canada, many of whom have, as the paper noted in a November 10 story, gone so far as to “turn books into projectiles.”
With the U.S. dollar steadily dropping in value after more than four decades of stability, the longstanding pricing structure American publishers have used—placing a lower U.S. retail price alongside a higher Canadian one on their books—has suddenly become a point of contention. Now American publishers are scrambling to find ways to appease both booksellers and customers up north.
The situation came to a head earlier this fall when the Canadian dollar and the U.S. dollar hit parity. “It's been years since anyone in Canada thought our dollar would be on par [with the American dollar],” said Yvonne Hunter, director of publicity and marketing at Penguin Canada. “This has made people here think in an entirely different way.”
Facing dramatic swings in the exchange rate, American houses have come up with a variety of solutions to the pricing issue. The most dramatic one some publishers have adopted is to drop the Canadian price from some books altogether.
While HarperCollins and Hachette were unwilling to discuss their Canadian pricing structure, both Penguin and Simon & Schuster are testing out single-price models. S & S, which ships directly to Canada, is putting a single Canadian price on selected titles on its spring 2008 list. According to Kevin Hanson, president of Simon & Schuster Canada—who called the move “eliminating the optics of the problem”—about 150 of the house's lead titles in mass market, hardcover and trade paperback will receive Canadian ISBNs and a single price “that is slightly higher than the U.S. price.” (He identified “lead titles” as those with bestseller-quantity print runs.)
Penguin is putting a single North American price on all of its spring 2008 frontlist titles, which means customers in the U.S. and Canada will see the same dollar figure on those titles. (At press time Hunter could not confirm how many titles the frontlist includes, or which formats.)
Some smaller publishers are also adopting the single pricing model. Rudy Shur, who runs the Garden City, N.Y.—based Square One Publishers, is going the Penguin route, adopting a single North American price. The move, he said, will allow his Canadian distributor to make the call on the price. “They can choose to either sticker the books with their pricing or go with the U.S. price. If we have to absorb the cost of stickering, so be it.”
That's not an acceptable option for bigger houses, though. Brad Martin, president of Random House Canada, said stickering is difficult and costly, especially for a publisher the size of Random House, which (unlike some large houses), doesn't have a separate Canadian distributor. “We ship out of the U.S. and we're not set up to put pricing stickers on books. If we tried to have the wholesaler or retailer do it, the cost would come back to us—we ship 19 million books a year, that's a big number.”
Random is therefore relying on other fixes. It has, along with other publishers, been issuing exchange rate rebates to Canadian booksellers who then discount the titles for consumers. Martin also noted that some Canadian retailers are taking it upon themselves to address the price issue, with box-stores like Wal-Mart selling books at the U.S. retail price.
When asked if he thought a single price model was an option, Martin said Random House is watching and waiting. “I don't think the dollar will ever be stable enough to say we'll have a single North American price. If it goes up, then you make money on the exchange. If it goes down, you lose money. What you're trying to do, unfortunately, is guess.”
Given the volatility of the exchange rate, even the houses that have adopted the single price don't know how long it will be in effect. Both Hanson and Hunter said their respective houses do not see the single price as a long-term solution. They do, however, have different takes on the situation. Hanson was buoyant about the fact that Canadian book prices will hit an all-time low this coming holiday season, which he sees as a good sign in a market where customers have already reacted to falling prices by buying more books. Hunter, however, sees a grimmer big picture: “I think it's fair to say that by the end of 2007 we, along with all the publishers, are going to absorb losses in the millions of dollars because of this.”
