2018 Book Manufacturing Outlook Includes Ranking of Top 5 Book Printers Based on Latest PI 400 List
The book manufacturing segment has come a long way since the doom and gloom days five years ago when many people questioned whether the printed book was in death mode due to the rise of ebooks. But, as we head into 2018, the demand for printed books is rising. And, with customer demands driving shorter runs and ultra-fast turnarounds, book printers are rising to the challenge of meeting those demands by continuing to invest in production inkjet and digital imaging technologies.
New Disrupter: Amazon’s Turnaround SLAs
“It’s an exciting time to be in the industry,” says John Conley, CEO of Borderland Advisors, and a 42-year book manufacturing industry veteran with stints at RR Donnelley and then Xerox. What he is referring to is a new disrupter in the industry: Amazon same-day delivery, which he points out, will totally change today’s book publishing, manufacturing and distribution markets. Although it is unclear at this point exactly what the Service Level Agreement (SLA) will be, Conley does note that the supply chain requirement will create new profit models and opportunities for both publishers and printers.
“There will be a lot of opportunities for those people willing to deliver on the SLA that Amazon is going to ask for. I think it’s going to be a pretty firm and non-negotiable agreement because Amazon is a company that expects to meet customer expectations 100% of the time. This is the customer experience it will expect of those who work with them in this same-day delivery model,” he explains.
According to Conley, with Amazon same-day delivery, production inkjet printing will also evolve to higher quality, lower cost and greater reliability, as the needs in the market dictate. “On the book side, the requirement for one-color [output] will drive the creation of a print engine we haven’t seen yet. In addition, bindery manufacturers will also need to come on board with new solutions.”
With the Amazon model, Conley points out that more titles will become available. “Specifically, this will be the reprint volume that’s in the market today. This will allow the printer to hold the economics it needs to be profitable while, at the same, dramatically reduce the company’s inventory position.”
According to Conley, the Amazon same-day delivery model is the most exciting thing to happen in book publishing since the early 1970s. “So, this new [business] model can make the entire system more profitable and efficient for everyone involved in it. That doesn’t happen very often.”
Demand Will Continue for Shorter Runs
In 2017, the book printing market continued to see the demand for shorter runs, which will continue in 2018. One printer that is moving in lockstep with that demand for shorter press runs is Walsworth in Marceline, Mo.
“We have been able to transform our platform to the production of smaller-run books. This has also necessitated adding digital binding to our platform,” says David Grisa, executive VP of commercial sales at Walsworth. “Digital printing has allowed us to economically produce smaller order quantities.”
Grisa adds that Walsworth plans to further accommodate these needs by improving workflow processes, providing ecommerce solutions, managing inventories better and providing fulfillment services.
With publisher demand driving shorter runs and faster turnarounds, John Edwards, president and CEO of Edwards Brothers Malloy in Ann Arbor, Mich., notes that his company is continuing to invest in both inkjet and digital imaging technology.
“Digital technology is helping our customers better manage cash, and we can help minimize inventory and react to demand much faster than we could just five years ago,” he explains. “In addition, producing one book not that long ago was not economically feasible. Today, it is for a large segment of the market. When we produce books digitally we do a lot of book of one, but the average is higher than that - more like ultra-short run down to one copy. We also see a lot of demand in single carton quantities.”
Edwards adds that being able to print a book of one helps its customers manage titles that can range from one book to those in the thousands. “That has kept titles alive, economically, and has allowed them to invest in other content, which is a good thing.”
For longer book printing runs, Edwards says that offset printing remains the more economical solution.
Worzalla, a book printer in Stevens Point, Wis., produces medium-run lengths of full-color books and can effectively compete on run lengths of several hundred with its offset equipment.
“We’ve made significant investments into our press and finishing areas during the past several years to enhance our ability to produce high-quality books much more quickly, and we’ll continue to do so,” conveys Jim Fetherston, president.
A Look Ahead to 2018
According to Conley, education continues to be a very murky segment as we move into 2018. “It’s been a lot more feast or famine in the K through 12 business, and we have seen a lot of reduction of capacity allocated to produce those books,” he explains. “For K through 12, everyone isn’t switching over to all e-platforms yet, because one of the things that educators are struggling with is the effectiveness of the e-platform - how good is it as a teaching tool, and what is the stickiness of learning on a computer versus learning from a textbook?”
According to Conley, the offset business will continue to consolidate, a trend that the book manufacturing industry will see for the next three years. “There will be more consolidation within the midsize printer market. There will also be a smaller group of core offset providers and then a much larger group of digital [print] providers, along with those offset printers that also have digital capabilities.”
Another area of focus in 2018, he says, will be trying to better understand who ebook users are and how they’re using the books. While ebook sales have declined, they are not going away anytime soon as they now have a foundation of users.
Looking ahead to 2018, Grisa notes that Walsworth is currently evaluating the needs of the professional and association markets to determine the best solutions and services. “As we move into 2018, we see reduced quantities and greater needs for reduced inventories, workflow simplification and fulfillment solutions,” he notes.
“We have also seen an increasing need to reduce the total cost of production, not just reduced unit costs. This is a trend that we expect to continue in 2018.”
Edwards says that he is seeing cautious optimism as the book publishing market has realized that the print product is still viable and in demand. At the same time, he points out, the paper market is changing dramatically, and that will impact total cost and could disrupt supply. Energy costs will also impact transportation, which is a big part of the total “landed cost” of a book.
Edwards saw a trend this year toward shorter runs, faster replenishment, and a focus on ultra-short, on-demand runs to minimize inventory, which, he believes, will continue in 2018. “We will also see continued consolidation in the book and paper manufacturing sectors in 2018, and the labor market will remain very tight.”
Fetherston anticipates a healthier and stronger book market in 2018, especially with people of all ages realizing that a book is the perfect antidote for too much screen time. In addition, he explains that in the age of news from dubious origins, a printed book is reemerging as a vehicle where readers can determine if the author is knowledgeable, credible and worth reading.
“The [printed] book market is very much alive and well,” he says. “With all of the academic and industry studies identifying the advantages of the physical book, books are cool again.”