The State of the Industry
For some, 2004 wasn't exactly easy on the blood pressure.
For others, some gains planted seeds of optimism for 2005. Meanwhile, new business models are emerging incorporating print-on-demand. New technologies are being sought out to streamline workflow and cut costs. Cross-media publishing is starting to feel somewhat like the Gold Rush. Paper prices are rising, and demand in some grades could get tight this year. And that's just the beginning.
The industry is also amidst a historic transition to a 13-digit ISBN number. E-books and handheld mobile devices are crossing the schoolyard and taking a seat in the classroom. Radio technology is paving a course to every book having a radio-transmitted identification tag. Products are for sale in international markets that provide consumers access to online books for a specified period of time. Production managers teeter between production and IT, and are even meandering into the marketing department.
This is all before you start to really examine the changes and challenges unique to each industry segment.
Medical publishers battle the Open Access proposal from the federal government and distribution challenges to boot. Educational publishers face significant changes (and opportunity) in the student population. University publishers have had to increasingly balance their nonprofit academic missions with the bottom line. Manufacturers continue to face price-gouging by a book publishing arena populated by a handful of mega-publishers that provide the bulk of the work for the manufacturing industry.
That's a lot to address, but to avoid painting a gloomy picture (no one likes change, right?), there are a lot of significant benefits coming out of this change-fest, and 2005 promises growth for many in the industry. To more accurately explain the details of the industry's current posture, BookTech Magazine decided to call on the experts—the leaders of well-respected institutions who not only witness the challenges and transitions in the industry, but actively work to prepare the industry's constituents for success.
These experts are truly at the forefront of the issues staring the book publishing industry square in the face, and they also can pinpoint the many pockets of opportunity for growth. BookTech Magazine asked each to address questions specific to his or her area of expertise to provide you with the most in-depth look at the state of the book publishing industry and the major occurrences taking place, of which every publishing executive should be aware.
Anthony Crouch, production manager, University of California Press
Charlene Gaynor, executive director, Association of Educational Publishers
Robin Bartlett, president, American Medical Publishers Association
Bruce W. Smith, executive vice president, Book Manufacturers' Institute Inc.
Jeff Abraham, executive director, Book Industry Study Group
Anthony Crouch on university publishing and production issues
Anthony Crouch is the production manager at University of California Press, one of the most highly regarded and cutting-edge university presses in the industry. The University of California Press has won numerous awards for its scholarly and bookmaking standards including awards from the American Institute of Graphic Arts, the Association of American University Presses; and the Bookbuilders West.
What is the biggest challenge facing production managers at university publishers right now?
The biggest challenge … is basically no different than it has always been: Keep the titles on schedule, bring them in on budget and don't sacrifice quality.
That said, the current big challenge is coping with the transition to the digital era and all that entails at every step of the way—in the design, especially the pre-press/proofing stages, and then the production and manufacturing process. …
Finally, the issue of digital art plagues most production managers. Digital art comes in a huge variety of forms. Authors submit what they believe to be perfectly acceptable digital art, often in formats that cannot be used or require expensive work to convert. We have prepared guidelines for submitting digital art, and it is slowly helping, but is still a big problem.
… We often run an art evaluation before proceeding into production, and for high-end color titles, we will run a press test to ensure the settings and color-management system is in place.
What is the overall market like right now for university publishers?
… From the perspective of the University of California Press, I can tell you we have been through significant changes over the past five years, some very difficult times adjusting to our authors' needs … combined with effectively addressing the shifts in the marketplace.
University presses have as their core mission the responsibility to publish and disseminate the results of scholarly research and writing. Theirs is a symbiotic relationship between the academy and the world of university presses. Trade and other categories of book publishers would not be interested in many of the titles that we publish.
Our financial mission is to function as a nonprofit, which establishes a different modus operandi from a for-profit trade publisher. To help offset the inevitable losses of a scholarly publishing program, we also publish serious general-interest titles, a series of natural history guides, and even a cookbook, to help 'balance the books,' so to speak.
We are now doing much better in many respects.
How is the University of California Press incorporating electronic publications into its business?
Our journals division is more active in this realm than our book division. … In the book division, we archive most titles and make portions available in a variety of ways. For example, we participate in BiblioVault, in the California Digital Library, several other digital libraries or activities, plus our own Web site.
Part of the electronic activity is to make information available in such a manner that disseminating it in electronic form is convenient to our customers, and as an aid to scholars, researchers and students. Part of it is to participate in a new method for marketing our titles.
Regarding technology applications such as electronic publications, has your role as a production manager changed?
My role … has changed in regard to professional development, in being open and receptive to new ways for designing, producing and manufacturing our books. We have and are experimenting with soft proofing, in trying alternative ways of digital proofing, transmission of files via FTP or allowing various suppliers, such as typesetters and book printers, to submit files back and forth on our behalf.
A reality today for a production manager … is to address the fact that print has company. Today's marketplace demands electronic methods of availability and distribution. … This often means sharing some of the production activity with IT, archiving and marketing colleagues in a manner of daily functioning that even a few years ago did not exist.
Are you currently exploring or implementing any new methods of production for improving workflow or book quality?
We are now working on methods of improving the workflow by using vendors' Web sites to create initial orders. Many of them have customized a portion of their Web sites to facilitate quick and complete initial ordering.
We have joined the GPI (Green Press Initiative) and participate in the recently formed [Association of American University Presses] Eco Task Force, which is focused on presses using more environmentally responsible and more recycled text papers and jacket/paperback cover materials. Our next step is to work with both domestic and offshore suppliers on an environmental audit of the supplier's plant, materials and methods for dealing with by-products.
Our current exploration is to try and locate one or more suppliers who can deliver acceptable-quality, high-end, four-color short-run reprints with 175-line screen images. Thus far, the print runs have been too high to achieve an acceptable short-run reprint for this category of book.
One-color black is not a problem today.
Another area we have worked hard on concerns halftone quality. By connecting our typesetters with our book manufacturers, by advising everyone early on as to which paper will be used and knowing the footprint of the press the title will be printed on, we have been able to improve the average quality of the halftone reproduction.
Has print-on-demand impacted the University of California Press?
We are equipped in principle to handle print-on-demand, but in reality we have not arrived there in any significant way other than utilizing the Lightning Source arrangement for a segment of suitable titles.
We are currently at the ultrashort-run stage with small reprint orders down as low as 25 copies, working with vendors who use different equipment from mainstream book manufacturers. We try to group these orders for cost-effective shipping to the warehouse.
The process fits very well into the publishing program of a university press. Many of our titles sell small quantities throughout the year, but we continue to sell them on a regular basis. If one can keep the inventory down, yet keep the book in print, everyone is a winner.
Charlene Gaynor on educational publishing
Charlene Gaynor is the executive director of the Association of Educational Publishers (AEP), a national, nonprofit professional organization for educational publishers. AEP's members comprise nearly 400 print and digital publishers of all sizes and in all media.
To what degree do you see a trend toward state-specific educational materials happening and over what time frame?
I think the implications of the No Child Left Behind Act are significant for publishers … especially the whole definition of 'scientifically based research' and how stringent the requirements can be for publishers is something that's only begun to be played out. … Publishers and school districts are taking a bit of a wait-and-see attitude. That can certainly inhibit innovation and some development that could be beneficial to kids in the meantime. …
But there is also a trend toward states having more control over money than the individual schools. What has been a site-based management trend is moving back to a more central control.
Another trend that we're seeing tremendous interest in is the whole idea of diversity of the student population, especially as it relates to special needs, English-language learning, learning disabilities … there's just a huge amount of growth in the demand in that area, and … for publishers who have technical applications (where some content is delivered online in some way), this is a place where there's really a huge opportunity …
How important is cross-media publishing and integration to the educational publisher?
The whole focus in the publishing business right now is on content—it's not even about the delivery mechanism. And I think it's a really positive thing.
During the [initial Internet boom], people producing online materials wanted to think of themselves as technology people. And publishers who published books wanted to see themselves as print people. Now, people see themselves as content providers. All eyes are on content, and I think that's great.
What are some of the best examples you've seen of educational publishers integrating electronic media into their business models?
Some really fine companies like Scholastic have developed products that deliver content across all media—Scholastic just has a tremendous professional-development product online for teachers. If you want to talk about a publisher who has done a fantastic job of embracing all available mediums, it's Scholastic.
LeapFrog SchoolHouse is an amazing example of taking what is a toy and making it a hugely successful learning device. They still use paper books, but the technology enables the child to use part of it like a computer. LeapFrog SchoolHouse has really done their homework and focused on content and curriculum, not just the medium.
And there are others—much smaller, lesser-known publishers—who have done an amazing job of using technology to their fullest advantage: Apex Learning delivers AP courses online to high schools. It might not sound like much, but if you understand how many rural schools and small schools there are in the country that could never begin to make these courses available to their kids, there's a whole new audience out there.
But the idea of how to integrate technology with print is a very big challenge for publishers. … The challenge is determining what content works best [and] in what format.
BookTech Magazine recently reported on a school district in Kansas, that launched an e-book program using handheld mobile devices, enabling students to read e-books, highlight text, conduct word searches and access a built-in dictionary. Do you see this becoming more prevalent?
Yes. It's almost inevitable … I think … that, over the course of the next generation, it will be as commonplace as talking on a cell phone.
But progress has been very slow. For at least 20 years, people have been talking about how technology is going to take over, how people will be able to print just the chapter they want [of a book], how everything is changing.
Now, we're in a period where the capacity for wireless technology has jump-started the whole process, and as publishers move toward a digital-production format and think of content as assets they can move around, it changes everything. Change will probably now accelerate exponentially, as the next generation of teachers and students who have grown up so adept at technology come in.
How would you describe the successful educational publisher of the next five years?
Absolutely the publisher who … makes the move to digitizing content and thinking of what they have as assets that can be delivered in any variety of ways.
Thinking of their content that way gives them flexibility—that's where the greatest opportunities will be, where the content can be automatically translated into different languages [for example], and it doesn't rely on the software, it relies on the content itself.
A great example of a company that is really smart in this way is Encyclopedia Britannica. Traditionally, nothing could have been more boring than an old set of text-heavy encyclopedias. But they've done such a great job of expanding online, and taking their products into other countries and packaging it in ways that are really interesting. In countries like Japan, they [sell] these cards you can buy, where you can get 10 minutes of encyclopedia time. There are all different ways the information could be available in all different markets.
Robin Bartlett on medical publishing
Robin Bartlett is the president of the American Medical Publishers Association, an industry association representing members from the world's top medical publishers, including Elsevier, Blackwell, Lippincott, Williams and Wilkins, John Wiley & Sons, McGraw-Hill Health Division, Oxford University Press and the American Medical Association Press. Bartlett is also the director of sales and new business development at the American College of Physicians in Philadelphia.
Can you give a 'state-of-the-industry' summary of medical publishing?
The thing that has happened in the last two or three years is a tremendous amount of consolidation … This has had [an enormous] impact on industry associations, because when one company gobbles up another, you no longer have two members; it's cut down to one.
For the last five years, the industry has undergone an extreme catharsis, and it [affects] medical publishers in many ways. The best example is that most medical publishers have been using independent distributors to get their books to book stores, and there traditionally have been four players in that marketplace. One has gone out of business, and the other was recently acquired by Baker and Taylor, the large library distribution company. So it effectively brings it down to two companies left in the distribution arena, with the number of options for distribution drastically reduced. …
Publishers may eventually have to create their own sales forces and distribute their own books, which translates into a significant increase in costs.
What is the biggest issue currently facing medical book publishers?
In addition to the consolidation, there are extreme challenges from the federal government—the NIH (National Institute of Health) and its proposal for 'Open Access.'
What is your position on the NIH proposal?
The position of the American Medical Publishers Association is that we are against [it]. We understand what they're trying to do, but the way they're going about it and the lack of careful analysis in the preparation of their proposal leaves a lot to be desired. They propose a giant elephant, when a much smaller donkey solution would be far more satisfactory.
The crucial issue [for the NIH] is keeping track of NIH-funded research.
We're in favor of NIH-funded medical research—that's where most of the new books and journal articles come from. But the NIH wants to … be the official purveyors of access to this information. So if it's an NIH-funded project, you or I, or anyone should be able to access it for free. …
While that motive may be well-intentioned, it's not a good source of medical information. Just as with drug research, drug companies don't publish raw research data; they put it into a meaningful format, edit it, review it and spend a lot of money to do so. Plus, this research needs to be peer-reviewed and evaluated by experts in the field. Publishers are the ones that provide these services, and until it goes through that vetting system, it's not given credence to be published. All this costs money—money that is supplied by the medical publisher.
How do you see the Open Access proposal affecting the industry
In its present form, the Open Access proposal will have a very significant impact on a lot of small publishers who depend on NIH-funded research to supply articles for journals and content for new books. The raw, unedited, unreviewed information will be published and made accessible to the public without allowing publishers an opportunity to commercialize the information or profit from its distribution. The critical information stream for new information will dry up.
Is there anything medical publishers can or should do about this?
Two programs are in place already, which more than satisfy all of the objectives of the NIH proposal. One is the Digital Object Identifier (DOI)—which would allow NIH to track all of their funded research. And the majority of medical publishers voluntarily participate in this program. Second is CrossRef, which links the DOI to the status of the information on a publisher's Web site.
All the publishers have to do is provide access to the abstract of an article, rather than the full text. This doesn't undermine the economics of the publishing process as the NIH proposal does.
All of the medical associations … are in league on this issue, and we've been working together to lobby the NIH. Some major medical publishers such as Wiley and McGraw-Hill are lobbying independently to force more careful review of this extremely expensive and poorly conceived proposition.
What's your opinion on the pace of technological advancements in medical publishing, and does it keep pace with the rest of the industry?
I actually think … we're leading the industry. For example, laptops, PDAs and online decision support tools [databases of the latest medical information physicians can access]—this technology has been embraced within the medical community more so than any other industry. It would be hard to find a medical student or young physician who doesn't have a laptop or a PDA, and isn't accessing information wirelessly on the Internet. There is a critical need for medical students and practitioners to access medical information rapidly, whether for personal education or to treat a patient …
How would you describe the most successful medical publishers of the next five years?
They're going to have the ability to take a manuscript and, first of all, peer-review it very rapidly. They'll have electronic peer-review systems in place. This is already common for journal articles. An article comes in electronically, gets sent out for peer review electronically, comes back electronically, is edited electronically and is sent electronically right into print production. The article never sees paper until the journal is actually published.
This whole concept is going to carry over to books, so the amount of time and effort that has to go into the production processes will be much more efficient, inexpensive and handled online.
And, ultimately, the format of the publications of tomorrow could be online, wirelessly transmitted in a blog, or printed in a textbook or journal. I also think it is likely that we will even see some new methods of medical-information distribution coming to the forefront within the next three or four years that we haven't even begun to touch on or think about.
If you have a cell phone, you can access the Internet. And if you can access the information, why couldn't you project that information onto a screen for a presentation, print it out on your wireless printer, or transfer it to a CD right from your handheld device? We will always need and have printed material, but I think there's going to be a whole new dynamic in terms of handheld technology—what we can access and what we can do with it once we access it.
If I'm attending a medical conference, and I want to verify that what a presenter is saying jives with the latest medical information available, I could look it up, right there on my PDA or cell phone, and compare it to what is being said. Technology people love medical publishers and practitioners because we'll spend money galore to buy the latest piece of hardware.
The publishers who take their content through this new information stream and make it available through a variety of media and technologies will be among the most successful publishers of the future.
Bruce W. Smith on book manufacturing
Bruce W. Smith is the executive vice president of the Book Manufacturers Institute, a 71-year-old trade organization for U.S. book manufacturers and their suppliers. He formerly was senior
vice president of manufacturing for
RR Donnelley, which ranked as the second largest book manufacturer in North America in BookTech Magazine's 2004 "Top 30 Book Manufacturers" listing. Smith retired from RR Donnelley in late 2002, after 35 years with the company.
Can you provide a 'state-of-the-industry' look at the book manufacturing industry?
Looking back, overall, 2004 was probably a so-so year for book manufacturers. It varied with some of the market segments, but I don't think anyone was dancing in the streets with total joy.
One of the exceptions was that the education/el-hi market was a little stronger than people anticipated. …
Overall, there was a lot of pricing pressure, as manufacturers tried to fill their capacity or best utilize their capacity, so prices took a hit last year. And the trade market was really dependent on a handful of big books that filtered out during the year.
Most manufacturers are more optimistic coming into 2005 than they were in 2004, particularly on the education side. [This year] should be a very strong year for the el-hi market because of some adoptions in key states such as California, Texas and Florida. So the manufacturers involved in those markets are looking forward to a strong year, and I think capacity will be very tight in that market.
It also looks like we're going to have a "Harry Potter" this year, which is always a good thing on the trade side. It's good for not only those who manufacture the "Harry Potter" books, but those books take so much capacity that other work has to be placed with the non-"Harry Potter" manufacturers. So they will benefit, too, as they get some of the runoff.
Even though last year was so-so and this year looks to be stronger … I don't think anyone is forlorn and on the verge of going out of business. They've all found ways to survive even in a soft market, and at least maintain margins through increased manufacturing efficiencies, improvements in throughput and the like.