Life after (traditional) book publishing

BCBusiness | July 2015
Chris Labonte and Richard Nadeau (right) have published books for White Spot and BC Hydro. The key? A built-in audience

Two Vancouver publishers have risen from the ashes of Douglas & McIntyre—and each is thriving in different and surprising ways

It’s been a rocky ride for the world of publishing in recent years. The merger of Random House and Penguin created a behemoth that shrank options across the board—for authors and agents looking for deals, and for small publishers struggling to compete. The independent North American bookseller has all but disappeared. Newspapers, hit hard as well, have drastically cut back the space devoted to book reviews. As for the ebook, it’s still largely undecided as to whether it’s a publisher’s blessing or hindrance.

And then, in the fall of 2012, Douglas & McIntyre—Canada’s largest independent publisher at the time—announced that it had entered bankruptcy protection after 40 years in business. By year’s end, the company had busted apart, with Victoria-based Harbour Publishing buying and re-organizing D&M and Heritage House purchasing its Greystone imprint.

While the demise of D&M was a sad chapter in Canadian publishing, for a pair of small Vancouver companies that rose from its ashes, there’s life after death—and a profitable one at that. In the months that followed the bankruptcy, D&M’s former chief operating officer Jesse Finkelstein and publisher Trena White came up with an idea for Page Two Strategies, which combines a full-service literary agency with limited publishing services. Around the same time, D&M’s former custom publishing head, Chris Labonte, and sales director Richard Nadeau formed a company called Figure 1 Publishing: a full-service trade publisher devoted to custom projects such as business and art books.

Finkelstein tapped into the idea for Page Two after having lunch with marketing strategist and author Rikia Saddy. Saddy expressed a need for more comprehensive support that went beyond the usual agency representation. “It wasn’t obvious to her that she should just contact another marketing person or publicist,” says Finkelstein, 38, who had worked her way up to COO after running D&M’s digital assets and foreign rights. “She needed strategy more fundamental to the publishing experience. I came back from that lunch convinced that there was something in that.”

Finkelstein and White discussed the prospect of a literary agency with a non-traditional twist and were soon galvanized by the realization that there was a huge market void for such a hybrid. “I was really excited to start something that could change as publishing changes,” says White, 38, who, prior to D&M, spent six years as editor at Toronto’s McClelland & Stewart. “We really wanted to be flexible and not stuck in a model because things are changing so quickly.”

By contrast, the guys at Figure 1 didn’t have such an obvious aha moment. For them, it was a natural progression from what they’d already been doing. Labonte, 42, had headed up D&M’s emerging custom content imprint and knew he was onto something that could grow; Nadeau, 56, is a 13-year book industry veteran who had specialized in selling high-end art and architecture books. Once the two had been cut loose, it was a no-brainer to focus on both the art books and the corporate business books at Figure 1. Says Labonte: “We took that aspect of what really worked at D&M, which was mostly beautifully illustrated books and books on corporate history.”

Despite the rise of the ebook and Amazon, both Figure 1 and Page Two remain true to the printed book, which still holds significant cachet for anyone who has an idea or product to sell. Page Two has signed five book deals in its first year, including a deal involving a posthumous Carol Shields book with Random House; all books are both print and digital. Meanwhile, Figure 1 has signed 40 book deals in two years—both print and digital.

Trade publishing is key to Figure 1’s business model. “A book still has huge credibility,” says Chris Labonte, who held several positions at D&M, including associate publisher and acquiring fiction editor. “And it’s another way for a business to extend their brand.”

Trena White (left) and Jesse Finkelstein (right) offer services for both traditionally published and self-published authors (Adam Blasberg)

It’s been two years since Figure 1 launched and more than a year for Page Two. Although they are still defining themselves as they go, both companies started generating a profit early on. They’ve set up offices, with Figure 1 operating from a new 800-square-foot space at West 6th near Cambie and Page Two in a smaller space at West Broadway and Ontario. Labonte and Nadeau have hired three staff, including a marketing manager, managing editor and creative director. Page Two just hired a part-time project manager based in New York. Both companies are looking toward expansion this year, in the U.S. as well as Canada.

Adapting to a quickly transforming landscape and reducing risk have been key. Figure 1 operates as a traditional publisher, offering services such as editing, design, distribution and marketing for their high-quality art and architecture books, as well as the books geared toward a specific business, such as cookbooks and corporate history books. Their model does not involve paying risky advances against royalties. That’s because the majority of their clients operate service-based businesses and have a built-in market. “If you can partner with somebody who can sell directly to their patrons, you are getting more direct sales that way,” says Labonte. “It doesn’t depend on traditional trade sales.”

Here’s how it works. Most of Figure 1’s clients pay for their services in a series of instalments as the publishing process moves along. Once the book is complete, Figure 1 supplies the client with an agreed-upon number of books that the client can use for promotion or to sell directly to customers; the last payment is made once Figure 1 delivers the client with a bulk supply of finished books. The client can then generate revenue through two streams: by selling the bulk supply of books directly to customers or by making royalties off books sold through traditional bookstore retailers. Figure 1 assumes the cost of printing, marketing, sales and distribution required for the retail market.

When selling directly to its own customers, the client retains all sales proceeds; for bookstore sales, Figure 1 pays clients standard industry royalty fees. For example, the White Spot Cookbook, released by Figure 1 in 2013, is sold through the White Spot restaurant chain as well as in bookstores. Burgoo Bistro has a Figure 1 cookbook, as does chef David Robertson’s Dirty Apron Cooking School. Both books are being sold through the clients’ stores. BC Hydro’s recent Figure 1 book, called Power Smart: BC Hydro Power Pioneers, is being sold to Hydro employees and former employees. Those books are also available through bookshop retailers and online stores like Amazon.

Figure 1 is setting its sights on the national and global markets, too. In Canada, Raincoast Books distributes and markets Figure 1 books, while in the U.S. and internationally, the company has partnered with Publishers Group West in Berkeley, California.

The company hasn’t ruled fiction out entirely, but for now, they don’t see how they could compete with the multi-nationals. The partners’ aversion to risk is a necessary byproduct of their industry. Both Labonte and Nadeau started their careers in retail, at the legendary Duthie Books. They went through that store’s bankruptcy proceedings in 1999 and know the pitfalls of publishing.

“Having gone through that, and deciding to start a company of our own, we are very focused about the business we are running. We are not messing around,” says Labonte.

While it’s standard procedure for a literary agent to guide an author-client through a book deal—and the book’s promotion once it’s released—most agents don’t operate as consultants on digital-era survival techniques such as navigating the self-publishing process, establishing an online platform or transforming a blog or YouTube presence into a full-fledged book. But that, in a nutshell, is the Page Two model.

When Finkelstein and White launched Page Two in the summer of 2013, it was that very hybrid concept: a literary agency that could also offer consultancy in both traditional publishing and self-publishing. As agents, Page Two gets the standard 15 per cent commission for domestic sales (a little higher for international); as consultants to authors and organizations, they quote on projects; and for self-publishing authors, it’s a flat fee without royalties. Within two months of launching, Page Two was turning a profit.

“While it took some time to figure out how we wanted to go about it, that idea took root very early and it felt like a real possibility almost right away,” says Finkelstein. “It was just a matter of figuring out how to do it.”

“We hear from so many people who are trying to figure out how they should publish,” adds White. “They have a book in mind, and they’ve heard about self-publishing and maybe crowd funding, and they are just not sure if that’s the way they should go. There’s a real gap there, and we are able to fill it and help them navigate these options.”

It’s almost impossible to succeed in any marketing-driven industry without an understanding of user-generated content and social media. A book can be the publicity tool that drives traffic and raises one’s profile, and self-publishing has made it an inexpensive option. But when attempted by the inexperienced, the result can often be a couple of hundred ebooks sold to friends and family.

At Page Two, Finkelstein and White help broker deals between self-published authors and distributors as well as deals outside the usual trade-publishing realm; last year, for instance, they helped a client with a sports-themed book align with a major retailer for sponsorship and distribution. They’re also looking at helping businesses launch their own self-publishing programs and find niche audiences for specialty publications, such as training manuals.

“One of the top priorities for us is helping organizations develop their own publishing pipelines,” says White. “There are all kinds of organizations creating forms of content whose work might be compelling to all kinds of audiences but might not succeed in the bookstore environment.”

Adds Finkelstein: “We are interested in bringing the smartest publishing tools to them and helping them develop their own means of publishing successfully in their own context.”

She could be talking about Page Two and Figure 1, which are now finding success in their own context. Still operating in the big (and stubbornly troubled) world of publishing, the D&M survivors have carved out a slim groove of their own making. And against the odds, they’re thriving.