New Revenue Opportunities and Efficiencies for Publishers

We are in a time when book publishers are being squeezed from nearly every direction. The rising costs of paper, printing, shipping and warehousing are driving up manufacturing costs, which the already-compressed bottom line cannot absorb. Beyond this, an increasingly inefficient traditional supply chain that accounts for most of the industry's revenue is gradually becoming its Achilles' heel.

Given these circumstances, and without a best-selling title or two, a publisher's only real option for handling profit pressures is to wring out costs. Opportunities exist, but it is challenging to change the processes that are so entrenched in how the publishing business is run.

A Solution Just in Time

However, new approaches to publishing, driven by digital print technology, are giving publishing entrepreneurs a competitive edge and traditional publishers a means to combat the considerable pressure their businesses are experiencing.

The biggest benefit of digital book printing is its ability to produce books 'just in time,' reducing the dependence upon inexact customer demand forecasts and minimizing warehousing costs (about half of the books manufactured in the last decade are gathering dust in warehouses). Digital printing also helps control costs and deliver incremental revenue that offset printing cannot. It provides an economic advantage for print runs that range from one to several thousand.

Digital technology also offers advantages for nearly every printing requirement before and after the main edition run. Prior to the main run, digital is an economical choice for short runs of review copies, comps and preview copies for sales reps and promotions, or to produce short runs of limited-distribution copies to serve as a market test.

The latter stages of a title's life cycle are also a digital stronghold with profitable production in quantities as low as one and titles that never have to go out of print. Old titles can be stored in electronic archives for printing on demand, providing incremental revenue.

Putting Digital Publishing to Good Use

Edwards Brothers of Ann Arbor, Mich., a book printer that was featured in the July/August 2004 issue of BookTech Magazine, helps control the costs of fulfilling these smaller orders by running print-to-order production facilities in the warehouses of publishing customers, eliminating the cost of delivery from plant to warehouse.

Other innovative book manufacturers are carving out a role for digital publishing in first-edition printing. Some publishers print shorter first-edition runs to better control warehouse volume, knowing they can respond to demand quickly with digital technology.

Others use digital to fill manufacturing orders more precisely. For example, a manufacturer might print 52,000 copies to fill an order for 50,000, but actually deliver only 48,000 due to routine production errors. Some manufacturers now produce the remaining 2,000 copies digitally, and

bill for the full order.

Digital publishing also allows book publishers to economically produce low-demand, yet viable titles such as teachers' editions of textbooks or specialty books written for niche audiences. These typically have shorter run-length requirements that can't be fiscally justified for offset printing.

These are just some of the ways that digital book manufacturing is helping publishers remain profitable. It provides a bridge to a future in which the publishing industry will almost certainly be re-invented.

—Peter Perine

Peter Perine is vice president/general manager of the graphic communications publishing segment at Xerox Corp.