I'd like to think that we're going to be your most vivacious panel of the day. That will help you out.
As mentioned, I am the proprietor, president, and publisher of Talonbooks, one of Canada's oldest independent literary presses. We celebrated our 50th anniversary in book publishing last year. We've always been independently owned. This is my 42nd year in the book trade. I spent 10 years as a retailer. I spent 21 years as the manager, executive, and partner of a distribution/publisher firm called Raincoast Books, which is one of Canada's largest distributors in town.
In 2007 my wife and I bought Talonbooks from the previous owners. For the last 11 years, I have been an independent literary publisher, publishing works of drama, poetry, books in translation from Quebec literature, indigenous studies, and social issues. I also served for a few years on the Access Copyright board. I've been on the Association of Book Publishers of British Columbia board for 12 years. So I have had a lot of opportunity to become familiar with the issues.
The issue from the point of view of independent Canadian publishers and from the point of view of Canadian authors is that our works are being systematically copied and used in educational settings, both at the K-to-12 and university levels, for commercial purposes. They are being used for course packs and for delivery of what would technically be textbook material. I know that people like to interpret the current Copyright Act and the fair use provision as meaning that they are free to copy our works and use them for course packs and in these large-use situations, but fair use implies that there's no commercial damage suffered and that there's no use in terms of commercial purposes. But that is exactly what's going on.
To our point of view, the people who least can afford it in the whole chain of endeavour are the ones who are being asked to sacrifice. They are basically being told that the university and teachers and everybody who works in the system, the infrastructure, the administration, should all be paid and should get benefits. The people who don't have benefits, and whose salaries are on average about $40,000 a year, are the ones who therefore should sacrifice their hard work. My contention is that in the long run, you're crushing the spirit of Canadian publishers and creators. We will gradually create a situation where we no longer have the extremely high level of authors and independent publishing that Canada enjoys today, whose works are known around the world and around the country for being among the very best.
The thing that's unique about Talonbooks, and that perhaps goes against some of the comments you've heard today, is that we're an independent literary press, where 65% to 70% of our sales are academic or school course adoptions. Our literature and our books bring to light Canadian stories by indigenous authors, by diverse authors, by authors from the margins of the community, and by some of Canada's most prestigious poets. They are used throughout academia. It's the same with our drama. All the great plays are used in academic settings. That's where most of our income comes from.
People ask, “What are the numbers?” Well, our average sales a year are about $400,000. Our income from Access Copyright prior to the change to the Copyright Act averaged $18,500 a year. Our income over the last two years has been $3,700 a year and it's dropping. It's obviously a significant decline. Now, $18,500 is about 4.6% of our sales, so it's a substantial number of sales, but licence sales are basically pure margin when they arrive. As $18,500 represents 9.25% of our gross margin, or about 10% of our gross margin, we would have to generate another $40,000 to $45,000 in sales to replace that.
Our sales have been relatively steady. We've maintained anywhere between $330,000 to $400,000 a year ever since, say, 2005, all through the difficult downturns, the advent of e-books, and all sorts of other stuff. Basically, trying to increase sales against the downward pressures of markets is extremely difficult. The overall book market in North America is not shrinking or gaining. It's the same. If anybody increases sales, you have to take market share from other people.
I think we've been somewhat successful taking market share from other people, but I can tell you here and now that there is absolutely no way to replace $20,000 a year, or 10% of our gross margin, on an ongoing basis, out on the open marketplace. That's not going to happen.
What does this mean from the point of view of the authors? For every cent we get, the author gets a cent. Our authors have also foregone the $20,000 a year in income from Access Copyright. For example, I was talking to a magazine writer today, and she said, “Be sure to tell them how important the cheque from Access Copyright has been to me every year as a magazine writer, being a crucial part of my magazine income and often enabling me to produce feature articles, where there is a long period of play before we are paid.”
First of all, I'd like to say that the collective licensing process, I think, is recognized as being the easiest one. I think the York case pointed out that the systematic copying of 600 million or 700 million copies a year is anything but fair use. In fact, probably the best way to deal with that is through a universal licence. I definitely support that point of view.
I go to academic conferences all the time, and the profs there all tell me that they use our stuff all the time. I know how much of our materials were being used before, and if anything, Talon is a stronger publisher today than it was over the last few years, with best sellers and a few indigenous books that have won numerous prizes. We have a Griffin Poetry Prize. We have a Governor General's Award winner in drama. We have another Griffin Poetry Prize winner, an indigenous author. We have Mercedes Eng, from a Chinese-Canadian background, who just won the Dorothy Livesay Poetry Prize. We have a book by another indigenous author, who won the Lambda award, and we have another indigenous author whose book was shortlisted for the B.C. Book Prize.
None of these books comes without the production of intellectual capital on the part of the author and the very long value-added chain publishers go through. I know that all our works are being well used in greater quantities than they were used before. I have not received a single request for permission for use from the University of British Columbia since the change to the Copyright Act. I have not received a single permission request from the University of Victoria, and I could go through a litany of just about every university in the country. The only requests I have received to use our materials are from the people who used to request them before: the University of Guelph and a couple of others, four of five of them. The ones we got before the act changed are the same ones we get now. I've had nothing, zero, from the rest of them.
What have I been told? I've been told by professors at the Canadian Association of Theatre Research conference that it's very common for them to sit down in a classroom and for the whole classroom to check out our e-book from the library, and everyone can use that for a course pack. The fact is, our licence to the library never included the right for them to be doing that. There is no enforcement; there is no prevention of that.
I asked to present a picture today that we were tweeted on social media, but was not given leave to, of a high school class reading one of our most successful indigenous authors, Drew Hayden Taylor. His works are used all the time. The classroom is proudly reading a play called Only Drunks and Children Tell the Truth, and you can see one person in the classroom holding a copy of the book that's been cut, and every single other person in that class is reading a photocopy.
They'll say that it's not up to them to enforce people copying whole works, but they are copying whole works in the library, so we need some kind of compensation to at least offset this wholesale adaptation of our materials and free use.
The royalty on one book to an author is $1.69. Basically, we have 20 or 30 books in that classroom, and the suggested royalty for K to 12 is $2.41 per student. Basically, they're suggesting that they pay, on an annual basis, the royalty for one and a half books to make up for the millions of copies they are copying. That may not be an adequate fee, but it's better than paying nothing and saying, “We should be able to copy all these materials for free. Why don't you creators and publishers donate your works to the system?”
I met last year with the Ministry of Education—