Mar. 19, 2007—At this year's Book Business Conference and Publishing Executive Conference, held at the New York Marriott Marquis March 5–7, printers were able to see and interact with one of their core client groups: publishers. With two tracks to draw out these influential print buyers, several commercial printers took advantage of this opportunity to get their name out, setting up booths among the almost 100 companies exhibiting.
The talk of the show—from the sessions to the exhibition hall—was books on demand.
John Conley, vice president of publishing, Xerox, noted that the term "books on demand" has been used to describe a process that spans a variety of uses, from one-off, variable projects to short runs of the same book. He urged that before you can sit down and have a serious discussion about books on demand, you need to define it. For the purposes of the show, the term, while not stated explicitly, was, for the most part, defined as short runs of static books.
The Long Tail
In his presentation at the Expo, Tim Cooper, senior vice president, strategy and business development, Harcourt Trade Publishers, went a step further in defining books on demand, noting that the distribution of books in general is changing to that of a long tail method. He noted that, because of the Internet, the old rule—that 80 percent of revenue comes from 20 percent of products—has been replaced with a new paradigm—the 98 percent rule—where a high fraction of inventory sells, resulting in long tail distribution of data.
By leveraging the on-demand, short-run model, companies can keep small inventories of a higher variety of titles in stock, printing only as needed. This cuts the total cost of ownership (TCO), and allows companies to make a greater profit on a smaller amount of product.
According the Mr. Cooper, TCO is determined by including the costs of not only the inventory, and the dollars needed to produce it, but also warehousing, obsolescence, pilferage, damage, insurance, taxes, and administration and other miscellaneous costs. By using this model, the price per unit is actually higher in many cases—producing books on demand in small quantities reduces the efficiencies you get from long runs. However, higher costs are offset by all other factors, resulting in an actual lower cost per piece total, and higher profit overall.
This model is working. Lulu.com Vice President of Business Development Andrew Pate noted that in 2006, the site sold 86,113 different soft-cover book titles, 10,516 different hard cover book titles, and 7,473 different calendars, with an average print run of 1.8 copies, and 75 percent of all orders for a single book.
Technology Behind the Hype
Muller Martini, in partnership with Nipson, showcased how a shop can take the concept of short-run books on demand and turn it into a saleable system. They invited many customers and prospects to the New York area for the conference, then brought those clients out to their headquarters in Hauppauge to see a live demonstration of books being printed and finished.
Robert Stabler, outgoing president of Nipson, said the conference confirmed what he already knew—the book industry is going digital. For the first time, he said, consumers at the show were unable to tell the difference between a book printed digitally and one printed offset. Professionals, or course, can still see the small differences and imperfections, but for the vast majority of applications, the technology has finally arrived at a point where digital production of books is feasible.
In fact, Muller Martini and Nipson have such faith in the quality and effectiveness of the technology, they have declared 2007 the year of the digital book. More publishers are looking into purchasing equipment than ever before, they noted, saying that while in the past there was interest, but no real desire to purchase, publishers are starting to invest heavily, building the infrastructure needed to make the digital book market grow. In fact, Heberto Pachon, incoming Nipson president, cited InterQuest, saying the book market is predicted to grow at 20 percent per year for the next few years, at least.
Producing books digitally and in short runs is the business model of the future. Andrew Fetherman, manager of the OnDemand Solutions division of Muller Martini, pinpointed it, saying this technology is perfect for shops producing 5,000–7,000 books per day, in run lengths of 50–1,500 copies. That is the sweet spot publishers are aiming for, and is positioned to be the most profitable segment of the book market in years to come.