Book Manufacturers & the Staying Power of Print

Book publishers are not alone in their attempts to adapt and thrive in a new digital era. Since the introduction of the ebook, printers have faced a radically different industry, one in which print demand has slowed and publishers seek the efficiencies of digital production and distribution. Printers have been forced, much like publishers, to reassess their value in the industry, be more nimble, and find new ways to cut costs and improve efficiencies.

John Edwards, president of Edwards Brothers Malloy, summarizes the shift well, saying, "When people ask me, 'What do you do?' I no longer say, 'I'm a printer.' I say, 'I'm a supply chain partner.'" By that Edwards intimates his job description has expanded beyond book production and more into consultation. Printers must now demonstrate to publishers new ways to reduce inventory and distribution costs by leveraging the latest printing technology and adopting more efficient workflows.

Book Business has requested a bit of consultation as well. To accompany the Book Business Top 20 Book Manufacturers, which ranks the largest manufacturers in the U.S. and Canada, we asked five book manufacturing executives to share insight on how publishers should be managing their printing needs. Leaders from Courier, McNaughton & Gunn, Worzalla, Edwards Brothers Malloy, and Quad/Graphics share tips for capitalizing on digital printing, integrating publisher and printer systems, and minimizing total supply chain costs.

Jim Fetherston
President & CEO
Worzalla
What trends have you seen emerge in book printing over the past year?
Two trends really stand out. The most favorable is the steady and significant increase in demand we've experienced throughout 2014. We are back to pre-economic downturn production levels. The other is the sustained push for a reduction in cycle time. This is being driven by increased demand and the need to keep product in the supply chain while keeping a lid on inventory costs.

Have you been impressed by any specific strategies your customers have employed to grow print revenues?
We've seen a shift toward valuing total book cost (printing, distribution, inventory, etc.) over simple unit cost. Buying decisions are being based on this criterion as it can raise the publisher's revenue and at the same time reduce overall costs. It has resulted in bringing titles back for domestic production that previously would have been printed in Asia.

Printers are masters of controlling multiple inputs on the fly to coordinate a smooth production flow. The earlier our customer brings us into the planning stage, the more creative and efficient we can be. It also allows us to handle inevitable schedule changes that are always a part of the process. Smart publishers take advantage of this.

What should publishers look for in a printing partner of the future?
The most important issue for publishers should be whether their printer has the skill to quickly satisfy the need for titles regardless of format or quantity resulting in no stock-outs in either retail or internet channels. Are they replacing unproductive, old equipment? Are they utilizing technology that actually works and allows them to be more efficient? And critically, is your printer retraining their workforce for the rigors of today's market?

Julie A. McFarland
President
McNaughton & Gunn
What are some of the changes or trends you've seen emerge in the book printing market over the past year?
We have seen customers investing more in the printed product-creating showpieces. Some customers are adding more color into their projects and investing more in design. One of the most common things people cite about the printed book is how they enjoy the feel of holding it. Customers are playing that up by investing in tactile cover treatments and materials that further enhance the reader experience.

How do the services you offer to publishers differ from what you were doing five years ago?
As the barriers for self-publishing have diminished, we have become more of a consultant, sharing our knowledge and expertise in book manufacturing. We are providing assistance with design, typesetting, file setup, material selection, specifications, and packing and shipping.

Have you been impressed by specific strategies your customers have employed to grow print revenues?
We have customers that have found success by focusing on their connection to their readers, researching and then directing their message to the places where readers visit both online and in real life. Publishers recognize that readers have to be aware of their titles first and then they are providing added value through the opportunities to interact with authors or to access content that builds on the book.

What would book publishers find most surprising about where digital book printing is today versus five years ago?
When digital printing first started it was about producing lower quantities economically and shorter turn-around times. Most initial offerings were standard trim sizes and material options were limited. Today, along with lower quantities and greater speed, improved quality and color enhancements are apparent. In addition, more paper options, cover treatments, and finishing options are being developed and introduced. This allows publishers to produce unique and cost-effective books.

John Edwards
CEO
Edwards Brothers Malloy
What important printing trends do you see on the horizon?
From the printer's side, the industry has changed dramatically. We're consolidating our warehouses now and being tighter on inventory and trying to be more responsive to demands as they come in. We have to be willing to change content quickly. It's a much more nimble, flexible environment.

The trend that I'm seeing is that larger publishers are consolidating their vendors. As publishers consolidate, electronic integration becomes a more viable opportunity. That means a printer's system is integrated with the publishers so that orders become automated processes. No one needs to touch the order once it comes in. There is a ton of money there for both sides. It's an automatic replenishment model. A few publishers are doing this now but not very many.

How will digital book printing continue to affect the industry?
We've been in digital printing since the mid-90s. Initially there were legitimate quality concerns but today it is hard to distinguish between offset, inkjet, and digital. There are subtle differences in the colors. Really it's about the cost savings You don't get savings initially, but you save on the backend. Say you have a title that is three or four years old and you use digital printing, you'll make up the money you spend with cut inventory costs and quicker turnarounds.

The publishing community lives and dies by the last reprint decision they make, and they're always wrong. They either print too many or not enough. I think you're going to see more hybrid models. You can start off with offset, and as sales level off you can switch to digital to meet the demand as it comes in. You minimize the damage of being wrong. It's a very different model because publishers are fixated on price point rather than the whole supply chain cost, and it's when you look at the whole supply chain costs that digital starts making sense.

Michael Shea
Vice President
Courier Corporation
What trends have you seen emerge in book printing over the past few years?
There has been so much talk about everything going digital, particularly in the textbook market, which is an area of focus for us. Despite the talk, we've printed more books last year than we ever have. Print still remains very strong.
Having said that, I understand that there will be a move to digital. What we're seeing, and what we think will be a very successful model, is more of a hybrid approach. Content that belongs in digital formats-video, animation, assessment-should be in digital, but there are a lot of core material that students can better digest in print. There are many studies being published now indicating that print is a great medium for a lot of educational material.

How are you working with publishers differently than in the past?
A big change is this new inkjet book manufacturing process, which has opened up a huge opportunity for us and for publishers. Historically the quality and cost of toner-based digital reproduction was too expensive. It would be cheaper for publishers to overprint offset books and throw away what they didn't need. With inkjet, we're able to do up to 1,200 copies with four-color and several hundred copies with one-color. The quality is commercially acceptable and the price point is significantly less than offset.

There is also an opportunity to increase revenues by bringing titles back into print. Previously publishers may have taken a title that only sold 100 or 200 copies a year out of print, rather than trying to manage that title. Now they can affordably publish that title through automated workflows and inkjet. It's now profitable.

What should publishers be thinking about regarding their printing in 2015?
Another important trend is the growth of custom publishing. We have a large custom publishing platform that allows our customers to leverage a lot of their existing content. Instead of going out and creating new titles by hand and repurposing in a manual way, we have some tools that allow customers to create custom material via a web interface and repurpose their existing content.

Ray Minturn
General Manager of Special Interest Publications and Books
Quad/Graphics
What are some changes you've seen emerge in the book printing market over the past year?
Digital printing is transforming the printing of books almost as dramatically as ebooks are changing the industry. The trend is clear: Improving digital print capabilities are interdependent on ordering, workflow, finishing, and fulfillment solutions in order to move publishers to a more demand-driven, zero-inventory model.

What else do you see on the horizon?
Another trend is that publishers increasingly see their core competency as content-not necessarily production and distribution. They are focused on content flowing across multiple channels-from an ebook to other forms still evolving-all the while continuing to see the printed book as part of this integrated media solution. As their publishing enterprise evolves around content curating and aggregation, the more publishers are interested in a printer that will deliver more than a printed product. They want a printer with the ability to minimize fixed costs and transform the supply chain such that the publisher may redeploy capital in the most effective way.

Have you been particularly impressed by specific strategies your customers have employed to grow their print revenues?
There is no question that print volume in the more traditional book sense has been displaced in part by ebooks. And for a while, that trend created enough doom-and-gloom within the book printing community to put more than a few book printers out of business. But what many didn't foresee was the explosion of printed books in a non-conventional sense.

First, totally out-of-print books were rescued from oblivion by the ability to print-on-demand in small quantities. Further, it is clear that custom publishing in the education market is continuing to help drive print growth and to offer a competitive option to the end-user. But more dramatic was the rapid growth of small-publishers, self-publishers, and memory books spawned by a convergence of front-end, print, bind and fulfillment systems and solutions. While some traditional book publishers and printers are scratching their collective heads over this phenomenon, others are figuring out how to adapt and apply organizational core competencies in a way that adds value to this growing market.

More traditionally, we've seen the biggest success among established book publishers who have embraced the opportunity of digital book printing and invested in the essential front-end ordering and fulfillment systems necessary to handle small quantities with minimal handling.

We also have to point out that great printed books with great content still sell and drive revenues and profits. People still love printed books. Publishers who are dedicated to excellence and burnish their brand excellence for content curation are able to produce and sell books in this hyper-competitive content marketplace. There is always a market for excellence, and there will always be demand for superb books in print.