There's Growth in Them There Stacks
Book publishers are keeping their fingers crossed that 2005 will be the year the industry shakes off the period of stagnation that has coincided with the U.S. economic downturn. The domestic market continued to remain essentially flat in 2004, but industry insiders are hopeful that the market will soon show growth.
The shift toward more flexible production schedules, and resurgence in educational and reference titles will likely be the engines that drive any industry upswing. Another trend in 2005 will be publishers aiming to enhance profitability by leveraging the cost benefits of digital printing and international sourcing.
Setting the Stage for Growth
Through September 2004, domestic book sales were up just one-tenth of a percent over 2003, according to the Association of American Publishers. Despite "The Da Vinci Code" phenomenon, hardcovers suffered double-digit declines in sales in several categories, including mass market and young adult categories, but were largely offset by gains in paperbacks. The fastest growing categories included religious titles and the small, but emerging market for e-books.
In addition to the slow recovery from recession, book sales in 2004 continued to be hampered by readers spending more time engaged with other media. Television, the Internet and other more interactive diversions will continue to vie for the reader's time and money, according to Dave Mead, senior vice president, sales and marketing, of Banta Book Group. Unfortunately for publishers, the increased adoption of broadband Internet access will give people more reasons to surf rather than turn pages in 2005, so the need for developing compelling titles will be even greater.
Educational publishing will be one of the industry segments showing growth in 2005, predicts Mead. "Barring continued state-funding problems, there should be a growth in [educational publishing] over the next three to four years as an increase in school enrollments coincide with state adoptions of larger curriculums like mathematics, reading, social studies and English," he says.
Tomes used for browsing and settling arguments will also likely see resurgence in 2005, according to Alison Fargis, a partner at publisher Stonesong Press. For the past few years it has been almost taboo to utter the word "reference" in front of a book developer, but resistance to the category is beginning to change, Fargis says. "People who have been relying on the Internet for information are realizing that they can't always trust the source," she says. The Internet or television may spark an interest in a subject, which then generates interest in purchasing a more authoritative source such as encyclopedias, tabletop books or desk references.
Fargis says publishers will try to replicate the recent success of trivia book "Schott's Original Miscellany" by offering reference materials that can catch the reader's eye. "Readers accustomed to interactive content are no longer satisfied with looking at two columns of text," according to Fargis. Titles are being redesigned for 2005 with more conspicuous jackets and pages featuring more graphics surrounded by quick bites of information that satisfy readers with shorter attention spans.
Instead of trying to revive the market for books with accompanying CDs, Fargis says some titles will feature integration with familiar Web sites, such as DK Publishing's reference titles that are joint efforts with Google, or books that accompany TV series like the "Discovery Channel."
Digital Grows Up
Digital printing will likely have the most impact of any book technology in 2005 as publishers will more frequently complement offset printing with short runs. According to Jim Hamilton, director of the On Demand Printing and Publishing Consulting Service for analyst firm InfoTrends/Cap Ventures, the launch of a 'book factory' machine early in the year by Muller Martini and Delphax could make a significant impact on the industry.
The Muller Martini SigmaLine is a start-to-finish machine, providing printing through binding, and is rated to produce a 300-page book every five seconds. The emergence of this type of printer will enable publishers to cost-effectively turn to short runs for volumes up to 1,000 or more. As the technology continues to improve during the next few years, "digitally produced short runs could approach 5,000 units," Hamilton says. He believes another significant development is the availability of digital printers with 19-inch rolls, such as the IBM Infoprint 4100 and the Kodak Versamark, that accommodate the 6-inch by 9-inch format with full bleeds.
Digital printers will complement, not replace offset printers, according to Hamilton. While offset will remain the dominant print method, digital printing will grow in importance for "end-of-life titles, university press, and print-on-demand," Hamilton says.
Publishers will print on-demand with digital technology more frequently to reduce the risk and cost of large-volume printing for unproven authors and secondary runs. Sensitivity to the cost of returns and warehousing fees will prompt publishers to rely on short runs more than ever before in 2005.
Interest in print-on-demand could either surge or be potentially hindered, depending on the results of an ongoing legal dispute, says Hamilton. In March 2004, On Demand Machinery Corp. successfully sued Amazon.com and Ingram Industries' subsidiary Lightning Source for infringing on its patent for a system of manufacturing single books, essentially what is known as print-on-demand. Critics suggest that the patent should not have been granted in the first place, as it protects a broad print-on-demand concept, not an invention.
The two companies appealed the verdict, and should the patent be overturned, the print-on-demand market could greatly expand. Conversely, if the appeal is denied and On Demand Machinery Corp. establishes a sizable licensing fee for use of its patented on-demand system, interest in print-on-demand could take a big hit.
Author, Publish Thyself
Digital printing will drive interest in self-publishing in 2005 as production costs have dropped to as low as $3 to $5 for a short-run paperback. Companies including Lulu.com, iUniverse, Booksurge, and ColorCentric Corp. believe that enabling individuals to affordably publish up to a few hundred copies of their work could become a sizeable market in aggregate.
John Lacagnina, president and CEO of ColorCentric Corp., says that 450,000 manuscripts created each year go unpublished. "If we print 20 to 100 of each of these, that's a lot of books per year," he says.
Lacagnina says that automated workflow and new color printers such as the Xerox iGen3 Digital Production Press and Kodak NexPress 2100 are making self-publishing cost-effective. His company streamlines order-processing by taking orders over the Web and receiving content as XML files and Adobe PDF documents. "On 50 percent of our orders, we never talk on the phone to the author," Lacagnina says.
Self-publishing specialty companies are creating book templates so authors will only have to supply formatted text and images, according to Lacagnina. This makes digital printing more cost-competitive with offset since the setup costs are small, and the supply chain costs of order-processing and invoicing are almost eliminated.
In addition to enabling more authors to self-publish, Lacagnina says digital printers can open doors to foreign markets. Digital printers are cost-effective for creating 50 to 100 copies of a popular U.S. title for emerging regional markets such as South Africa, Singapore or the former Yugoslavia.
Software and Hard Copy
The axis upon which book production software rotates has begun to shift, and will continue its realignment in 2005.
Cary Drake, technology manager at printer Anthology, a Von Hoffmann Company, says that 60 percent of the publishers he works with have made the switch from the long relied-upon Quark to Adobe's InDesign and Creative Suite applications. Drake says the Creative Suite "allows publishers to retain control of the process," all the way up to getting ready for plate.
Publishers are increasingly using document-management systems that store files locally on their servers while allowing designers and editors to log in remotely, according to Drake. "This leads to a reduction in the iterations of page proofing and provides greater control," he says. Adobe's InCopy is replacing Microsoft Word as the de facto application for making revisions during editorial workflow, says Drake.
Drake says that integrated publishing systems, such as K4 from Managing Editor Inc., and Smart Connection from WoodWing Software, extend Adobe's Creative Suite to coordinate collaboration and the overall workflow. However, Drake says many companies are unwilling to fully commit to soft proofing. His company developed its own soft proofing application in 2000, but the production staff largely resisted the move, favoring hard copy for final proofs.
"Completely accurate soft proofing (requiring precision monitor color matching) is not ready for prime time," he says. Many companies upgrading to a comprehensive workflow system will pay a price in new hardware in 2005. Publishers with older Apple Power Mac G4 computers will likely invest in G5s juiced up with lots of RAM and storage to satisfy new publishing applications on the market.
Investment in digital printers that provide more flexible production volumes will rise in 2005. Companies mindful of the dangers of the potential for over capacity in purchasing big iron offset printers will instead put their dollars into less costly digital print systems such as the Muller Martini SigmaLine.
Although e-book sales grew by 62 percent through September 2004, according to the Association of American Publishers, they continue to be a fraction of a fraction of overall book sales. Although the sales of e-books will likely grow again in 2005, the market's best hope is for the arrival of a compelling iPod-like device that creates a buzz about reading digital content.
E-books have also been held back because electronic works are not portable across devices, but the industry is starting to address the issue, according to Rajan Samtani, director of sales and marketing at digital rights management company ContentGuard. He says that Palm, Adobe and Microsoft "have to go from proprietary to interoperable" so that people can purchase an e-book and read it on any of their computing devices.
Samtani's company developed the Extensible Rights Markup Language (XrML) to provide a consistent method for securely managing digital content, and has licensed the technology to a number of companies including Microsoft and Zinio Systems.
Though XrML is supported by the Open eBook Rights and Rules Working Group and the Organization for the Advancement of Structured Information Standards (OASIS), 2005 will see momentum growing only slowly. "We'll likely have a period of more chaos," until publishers realize that working together is needed to grow the e-book market, Samtani says.
Addition by Subtraction
The book publishing industry will continue to enhance profitability by reducing costs by taking advantage of advances in technology and the use of foreign workers. Digital workflow applications and advances in global communications will enable companies to narrow expenditures by accessing less-expensive labor in Asia, according to Banta's Mead. He says domestic printers will also slash costs through the "continued acceptance and expansion of foreign sourcing for non-time-sensitive print production and foreign manufactured paper."
The same applications that are now allowing editors and graphic artists to work from home will also be used to interact with workers many miles and time zones away. "The trend (toward foreign sourcing) has significantly impacted many print sectors in the U.S. that specialize in highly decorated or high-quality process-color product suited to sheetfed printing," according to Mead. He says, "Shorter runs that fit the color sheetfed sweet spot of many Asian printers are increasingly at risk, and [the risks are] being felt hard by U.S. printers."
Once these foreign-based facilities and workflow systems are more established, they will be well-suited to producing regional versions of books for the international market, which industry insiders suggest will likely see growth in 2005 as well.
While 2005 may or may not be a breakout year for book publishing, companies that embrace digital printing and automated workflow systems could be positioning themselves for prosperity for the remainder of the decade. Thinking small (as in shorter runs) could provide the best opportunities for versatile publishers.
John Gartner is a technology writer based in suburban Philadelphia.
- Association of American Publishers
- Banta Book Group
- Banta Corp.
- ColorCentric Corp.
- Eastman Kodak, Kodak Versamark
- IBM Corporation
- InfoTrends / CAP Ventures
- Lightning Source Inc.
- Managing Editor Inc.
- Microsoft Corp.
- Muller Martini
- On Demand Machinery LLC
- People Magazine
- Quark Inc.
- WoodWing Software
- Xerox Corp.