Special Report: Printers' Outlook: Not Your Father's (or Mother's) Book Manufacturers

Beisser: What are some of the trends you're seeing among your publishing customers?

Twomey: Trade sales are most affected by digital readers. While the overall digital share of trade sales is now around 20 percent, some best-sellers will have 50 percent of sales in electronic formats. Education is much less affected, as there is institutional resistance to change, and as e‑books are generally a value-added offering and not a replacement [for print]. Reference and b-to-b sales were affected by electronic substitution several years ago, and changes in these segments are modest. E‑books do reduce total print sales, but they also make demand-planning more difficult. As a result, reprint lead times are dropping. The fall trade cycle has seen a higher peak relative to the summer than in prior years.

Beisser: You mentioned you offer e‑book conversion services.

Twomey: We do … and will continue to invest in helping publishers of all kinds easily deliver content through multiple channels. We believe that is an essential service model … and are investing in digital, mobile app and related technologies to ensure our book customers have the greatest range of services and maximum flexibility and efficiency in deploying their book content.

Beisser: What is your five- to 10-year outlook given the growth in e‑book sales and publishers' focus on inventory management and short-run printing?

Twomey: Quad/Graphics conducted an in-depth survey of 5,000 consumers to determine what happens as consumers purchase tablets or e-readers. The good news: We found that most consumers continue to buy print editions, even after acquiring a reader. We also found that preference for e‑book titles is highly dependent on e‑book pricing. As e‑book price points move from $10 to $15, consumers switch their preferences and prefer a print product by a margin of 1.8 to 1. We anticipate that e‑book demand will continue to grow as device prices drop. Astute publishers have been bundling print and e‑book editions to drive sales by satisfying consumers who want both formats. This trend will grow, and Quad/Graphics will be redefining and innovating its business solutions for customers to help them adapt to these trends.