PublicAffairs, an imprint of The Perseus Books Group, recently found itself with an enviable problem—not enough books to fill orders for a runaway best-seller. The book was Scott McClellan’s White House memoir “What Happened: Inside the Bush White House and Washington’s Culture of Deception,” but luckily for Perseus, the appearance of McClellan’s face everywhere on TV this spring coincided with a propitious meeting at BookExpo America between John Ingram of Ingram Book Group, owner of digital printer Lightning Source, and Perseus Publisher Peter Osnos.
“Demand went vertical, and there was a period of time when orders were coming in and they [didn’t have] any copies … [available] anywhere,” says Lightning Source President David Taylor. “So John Ingram said to Peter Osnos, ‘Look, give us the file, and we’ll set it up as an on-demand model, and we’ll fulfill at least some of those orders.’ ”
The problem for Perseus became an opportunity for Ingram to show the world the value of on-demand digital printing.
“We got the file from them on the Monday morning after BookExpo America, and we were printing the first books that afternoon,” Taylor recounts. “We actually moved over our entire casebook production to just that book for a period of 48 hours. We printed several thousand copies, and those were orders that otherwise would have just [been lost] or would have not been fulfilled. When the offset order came back in, we switched it off.”
Printing What You Need When You Need It
Taylor hopes examples like this one demonstrate the versatility of digital printing, both in terms of logistics (speed of turnaround) and printing capabilities (“What Happened” is a hardback, jacketed book with photo plates in the middle). Driven by recent technological improvements, falling production costs and a changing book market, digital printers believe their services are on the cusp of playing a major role in all segments of book manufacturing.
“Digital is still very small today,” notes Gilles Biscos of market research and consulting firm Interquest. Between 2 percent and 3 percent of total book volume is produced digitally, Biscos says, though this is up from less than 2 percent two years ago. At current rates of growth, digital should be at 5 percent to 6 percent of the total market in three years, he predicts.
The most rapid growth in the on-demand market up to this point has come in nontraditional segments such as self-publishing. Lightning Source works with publishers such as Lulu.com to provide printing services in runs anywhere from one book to a few dozen; such business makes up about one-third of the company’s total volume, according to Biscos.
Taylor’s appointment at the helm of Lightning Source—he replaced longtime CEO Kirby Best in June as part of a major internal reorganization—reflects Ingram’s desire to move beyond positioning digital print services as a separate publishing niche and fully integrate print-on-demand (POD) with its other physical and digital services, according to the company.
With a 23-year background in bookselling, including five years as Lightning Source’s vice president for sales and marketing, Taylor’s perspective is, as he says, “very much driven by the point of view of the consumer”—whether book buyers, readers or publishers looking to produce titles more effectively.
The same ethos is at work in the approach now taken by Edwards Brothers, where, according to President and CEO John Edwards, there is an increased focus on offering digital in the context of a larger suite of options.
“I’m trying to not call it digital anymore,” he says. “It’s short-run. I don’t want to have to differentiate anymore [between digital and offset]. We’re focusing on making it seamless for the publishing community as far as how [a book is] made.”
According to Edwards, because technology has reached a point where customers cannot tell the difference between a digital and an offset product, the focus is on turnaround time and matching market demand. Files are portable; therefore, content can be moved seamlessly from one manufacturing format to another as sales patterns change throughout a book’s life cycle.
“We have actually trademarked the phrase ‘life of title,’ ” Edwards notes. “We want the publishing community to be able to print what they need when they need it.”
McClellan’s book highlights the advantages of well-timed integration of digital print options into the life cycle of even mass-market trade titles.
“If [Perseus] had set the book up as a print-on-demand book at the time they published it, we could have printed probably several thousand [more],” Taylor says. “There was a gap of three to four days when they were out of stock, and we didn’t have the file.”
Such a setup gives publishers the flexibility to print fewer books initially, reducing the risk of overstock and the associated cost of returns, shipping and warehousing. This hybrid POD-offset model is increasingly being adopted by traditional book publishers who still rely primarily on offset, Taylor says, citing such Lightning Source customers as Cambridge University Press, Oxford University Press, Random House and Elsevier, who are using POD to keep already-published books in print.
Reconsidering the Per-Unit Cost
“A lot of publishers are still very happy to have a business model based on the holding of inventory, but the general trend is that they’re looking to take that cost out of their business,” says Taylor.
John Paeglow III, president of digital book manufacturer IBT Global, says customers are increasingly focusing on the advantages of getting a book to market over the higher per-unit costs of digital.
“There’s an application in every discipline,” he says. “It’s not the most economic option, but in many cases, time sensitivity outweighs the price. …
“If you fixate on unit cost, digital will never look as attractive as offset,” Paeglow adds. “But if you look at total dollars spent, if that inventory is unsold or takes 24–30 months to sell, that’s cash you are tying up. As it becomes more cost-effective, you are seeing major players such as Oxford University Press using six-month inventory and writing off product at the six-month level. It’s a whole different philosophy to managing inventory.”
The trade market has been slower to adopt a hybrid or purely digital model than the textbook, elementary-high school and academic markets, where small print runs and higher price points have long been the norm. Being driven more by front-list titles and faced with smaller profit margins, digital can seem to some trade publishers like a risky proposition, and one of the main goals of marketing digital services is to make publishers aware of the versatility and usability of digital within a range of contexts.
“Large print runs are not going to disappear, with the obvious and perhaps somewhat extreme example being ‘Harry Potter,’ ” Taylor says. “Many books fall into that category where digital print is some way off from engaging …, but [as quality improves], the vast majority of books are going to fall within the circumference of digital printing and some sort of on-demand model that says you don’t need to ever run out.”
Educating customers on the cost-effectiveness of digital printing over the entire life cycle of a book is a key challenge right now, Edwards says.
“One of the problems we have is that the people we deal with have been evaluated and promoted based on price point to retail,” he notes. “The total cost should be lower [when everything is taken into consideration], but there’s not a system that rewards that behavior. This is the production manager’s dilemma—their whole reward system is based on bringing the [per-unit] price down.”
Printers hope some of these attitudes will change as technology continues to improve. According to Paeglow, IBT has seen its recent growth fueled by high-quality output in monochrome and four-color digital processes. The quality of four-color printing has increased greatly over the past year, and along with it, the percentage of color digital printing, to the extent that Paeglow predicts it will outpace monochrome in the not-too-distant future.
Big news at the Drupa show in Germany, which wrapped up June 11, was the introduction of several digital ink-jet systems, including Hewlett-Packard’s new Inkjet Web Press. Well before the show comes around again in 2012, industry watchers expect ink-jet to be making available longer print-run capabilities at a lower price than currently available.
“Because of the speed, because of the width of the system, because of cost per page, both in monochrome and color, it’s not going to happen tomorrow, but within the next 2 or 3 years, we are going to see a jump in the kind of things that can be produced digitally compared to what is done today,” says Biscos. “Ink-jet gets us closer to offset, while still keeping the benefits of digital in terms of print-on-demand—no waste, no warehousing and additional sales. So you have the benefits of digital while getting closer to offset in terms of pricing.”
Paeglow agrees that the impact of ink-jet capabilities, while still some 18 months away, could be very significant.
“That’s the next step, the next evolution,” he says. “With this, we might be competitive in the 2,000-3,000 copies area. That’s very significant because it wipes out all sheet-fed, offset printing.”