(Samuel Hoffman/Associated Press)

Ever wonder how book stores figure out what kinds of things people want to read and decide what titles to carry? Although the next bestseller may be unpredictable, an evolving technology called Booknet is helping people in publishing make crucial business decisions in an industry that Roy MacSkimming once dubbed "The perilous trade."

"The industry is so inefficient — from pricing, to supply, to returns, to inventory management. Nothing could really make it much worse," explains Christopher Smith, manager of Collected Works, a bookstore located in Ottawa.

Booknet itself isn't new, but it has been evolving since its introduction in March 2003 and the system is becoming an important tool for forecasting demand and managing supply in the Canadian book market.

Among other things, Booknet began to track sales data from participating retailers in October 2005, giving subscribers access to a wealth of data that includes information on which titles Canadians are buying and what they're ignoring.

How it works

Booknet collects data from publishers who transmit electronic files from their point-of-sale and/or inventory control systems to a central server at the end of each week. The data is compiled and combined with bibliographic data (titles, authors, subjects, prices, and so on) before being released to publishers and retailers via the Booknet SalesData website.

Government funding from the Canadian Department of Heritage got the system off the ground, and Booknet CEO and president Michael Tamblyn describes it as "staunchly and enthusiastically not-for-profit." However, some users must pay to access the data to help defray the costs involved with operating the network.

The cost to subscribe to Booknet varies, depending on marketplace position. Retailers are allowed access to information at no cost, for example, since their data is what gives the system value in the first place.

"Publishers — because they can use this information to both sell more and to reduce costs — do pay a subscription, but the subscription is tied to the amount of their sales we’re allowed to track," says Tamblyn.

There's a caveat: Not all of the booksellers in Canada are participating, so Booknet can only report between 65 and 70 per cent of all sales to consumers in all retail channels.

Aside from a few independent bookstores and grocery/variety stores like Wal-Mart, the glaring absentees from the table are Indigo.ca and Amazon.ca, the two largest online retailers in Canada.

"The problem is, they are the two major players and I think both of them are reluctant to sign up," speculates Tom Best, vice-president of Marketing at HB Fenn, a distributor that represents more than 60 publishers. "I think Amazon is fearful that if they got onboard, Indigo could see their numbers; and it would be fairly easy to identify who was doing what between each other."

Although Indigo contributes data from the retail side of its operations, "Online information traditionally hasn’t been shared," explains Indigo spokeswoman Lisa Huie. She says there are no plans to allow Booknet access to Indigo.ca’s online sales data in the future, as it would allow competitors to garner an advantage from seeing Indigo.ca’s sales performance.

"We’re comfortable with our participation and we’re encouraged by the information that it has been able to provide to the industry," says Huie.

Booknet's payback

Like many independent retailers, bookstore owner Smith adopted Booknet because he "recognized the horrible inefficiencies [the industry] laboured under and perceived Booknet as the most efficacious route to help correct them."

In some circles, there were fears that the information would drive bookstores to adopt a model where they offered only a relatively small collection of big-selling titles.

Says Tamblyn, "There was certainly concern when we first started sharing this information; was it going to create a best-selling culture? Are people going to be chasing bestsellers at the expense of more literary works, or works that had more significant cultural value than commercial value?"

The actual changes within the area of trade publishing over the past couple of years that can be attributed to Booknet have put most of those fears to rest. Harper Collins Business Manager Adrienne Leahey points out that, "Editors would use [Booknet] when they make acquisitions," yet availability of the data to everyone at a publishing house is not the sole determinant in the material chosen for publication.

"The one constant in publishing is that readers surprise you," adds Tamblyn. "If there’s a second constant, it’s that authors can surprise you."

"I think that it’s been a bit of a wakeup call for both publishers and agents to really recognize there are really not that many books that sell extraordinary numbers of copies," says Best. "And therefore, it’s really your backlist and books that should have some longevity that you’re going to have to focus a bit more time and attention on."

Insiders agree that the system has helped improve day-to-day operations within the often-chaotic book business.

"It’s kind of like The Wizard of Oz — you finally get to see behind the curtain," says HB Fenn's Best in describing the kind of information Booknet offers. "And I think the benefit has been enormous from, in terms of sales and marketing, to be able to see what sort of effect you’re having in the marketplace. The primary benefit right off the bat is prints and reprints. In the past, a lot of anecdotal information was used, and I hate to say this but we were pretty much flying by the seat of our pants without this information."

Despite the reluctance of some parties to buy into the system, Smith says Booknet has proven itself an invaluable tool, and the service has allowed him to increase sales by 30 per cent since he started using it.

"There are two million books in print in English and 120,000 more published each year," Smith says. "Booknet helps me separate the wheat from the chaff. I can see what categories are performing well elsewhere and what titles within those categories are the hot items to have."

The book-buying public also gets ancillary benefits from Booknet, since it helps publishers weed out inefficiencies and keep prices down. Publishers who subscribe generally have more resources to promote new titles and retailers can offer an improved selection and faster delivery for out-of-stock items.

But industry watchers say consumers should still be cautioned against hoping for dramatically lower book prices as Booknet is improved, since the current pricing scheme reflects the fact that Canada has a smaller publishing industry that is forced to compete with the scale economies of the U.S. or U.K., where publishers can afford to take a smaller per-unit profit because they can make it up in volume.

"I think books are reasonably priced right now," explains Toronto bookseller Ben McNally. "I think [a book in Canada] is great value for the money."

The author is a Toronto-based freelance writer.

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