Mission: To increase digital book sales at D&M Publishers in part through the launch of his Bookriff online bookstore
Assets: A background in asset management and a passion for reading
Yield: E-book sales that have jumped fivefold so far this year
By Glen Korstrom
As an avid reader, Mark Scott relishes the challenge of transforming a traditional book publisher into a viable business in the digital age.
The 50-year-old has been at the helm of D&M Publishers Inc. since 2007 and has expanded the company both through acquisition and by keeping a focus on the burgeoning e-book arena, which is fast becoming the future of book sales.
When Scott spearheaded the June 2008 acquisition of Gabriola Island-based New Society Publishers (NSP) for an undisclosed sum, he was attracted by the 12-employee activist publishing house’s profitability, American distribution network and catalogue of titles that fit well into D&M’s portfolio.
D&M was much larger than NSP but only 10% of D&M’s sales were in the U.S. NSP, conversely, generated about 75% of its sales south of the border.
Failed bids to buy two more publishing houses have not curbed Scott’s quest for growth. He remains keen to buy companies for the right price.
Meanwhile, much of his excitement surrounds a side venture that has several of the same owners as D&M.
Bookriff is an online bookstore, in which Scott and his partners have invested hundreds of thousands of dollars and plan to launch this fall.
Scott’s involvement in D&M evolved from being in a book club with D&M co-founder Scott McIntyre. McIntyre planned to sell a majority stake in the company that he co-founded in 1970.
Scott bought a 50% stake in the venture, while Tricor Pacific Capital Inc. principals Rod Senft and David Rowntree bought small stakes. McIntyre kept some shares, as did Rob Sanders, who is the publisher of the company’s Greystone Books division.
Bookriff hopes to revolutionize the book trade in the same way that Apple Inc. revolutionized retail sales in the music business.
But instead of providing consumers with a legal way to buy individual music tracks rather than entire albums, Bookriff will allow them to buy single chapters instead of entire books. It will then split royalties with content creators.
Purchases could be e-books formatted for a wide range of electronic book readers or print-on-demand bound volumes.
Scott said that global book publishing behemoth Ingram has agreed to allow Bookriff to sell its content in this splice-and-dice format.
Among the keys that will determine Bookriff’s success:
- negotiating agreements with publishing houses to let the company sell content; and
- having user-friendly back-end website technology for content searches.
“It’s a huge opportunity,” said Scott, while peering out of his Quebec Street headquarters’ windows at lush cherry blossoms.
“Bookriff is part of D&M even though it’s owned separately. One of the reasons I bought into D&M was to take the experience and the relationships that have been built through the years and to translate that into a digital business. That’s the opportunity.”
Scott joked that Bookriff’s success could put CEO Rochelle Grayson on the cover of Time magazine as the next Mark Zuckerberg.
Grayson told Business in Vancouver that Bookriff needed to be a separate corporate entity from D&M because it will be trusted to manage and sell a wide range of publishers’ content. It therefore would not be appropriate for Bookriff to be a subsidiary of a client publishing company.
D&M produces about 120 new book titles each year and generates about 95% of its $10 million in annual revenue from bound volumes. Scott said digital downloads have ballooned to 5% of total sales in 2011’s first half after accounting for only 1% of sales in all of 2010.
E-book growth would have even been more staggering, but D&M produces a lot of hardcover art books and cookbooks that Scott believes will continue to be bought in paper form because consumers want to touch them and view their photos in hard copy.
Within five years, Scott projects that digital-book revenue may account for as much as 60% of his total sales. But the reality for now is that bound paper books remain the overwhelming choice of consumers.
U.K.-based Publishers Association (PA) released statistics May 3 revealing that Britons spent 20% more on e-books in 2010 ($282.6 million) than they did in 2009.
That’s strong growth, but nothing near the spike that would be required for digital-book revenue to outpace paper book sales industrywide in the next five years. About 94% of all the money that Britons spent on books in 2010 went toward paper books.
Scott has yet to buy a book reader. He said he’s waiting for the technology’s next generation.
Outside of work, he makes time for his 15-year-old daughter and 13-year-old son.
“My son is really into basketball, so I spend a good part of life in gyms and going around North America to games, which I love doing,” he said.
Before Scott entered the book business he was involved primarily in managing real estate assets.
Burnaby-born, Scott grew up in Kamloops, Calgary, Regina and, finally, Toronto, as his family followed the career turns of his father, who managed shopping centres.
Scott completed a degree in economics and management from Guelph University in 1983 and spent much of the rest of the 1980s working in property development, acquisitions, refinancings and property sales.
Scotia Capital transferred him to Hong Kong in 1993. A few years later he joined the Asian Capital Partners (ACP) investment bank, watched the former British colony transfer to Chinese rule and stayed with ACP until he became homesick in 1999. Scotia Capital re-hired him, this time to be the co-head of its Vancouver office alongside Dave Bustos.
Bustos said one of Scott’s greatest strengths as an investment banker was his ability to determine clients’ needs and interests. That aptitude, he said, will make Scott an effective corporate president.
In 2004, Scott joined Senft and Rowntree at Tricor and was at that company until the D&M opportunity arose.
Said Bustos: “Mark did a great job of getting to know people and really forging strong relationships with a lot of different types of people at various levels of organizations.”