Europe Digital Book Printing Study

©2010 INTERQUEST, LTD. 1

Digital Book Printing in Europe: Market Analysis Executive Summary for Survey Respondents

Prepared by INTERQUEST December 2010


Copyright 2010 INTERQUEST, Ltd.

All rights reserved. No part of this report may be reproduced in any form or by any means without the permission of INTERQUEST, Ltd.

For information, contact:

INTERQUEST, Ltd. P.O. Box 6568 Charlottesville, VA 22906 USA

Telephone: (434) 979-9945 Fax: (434) 979-9959 E-mail: [email protected]

Printed in the United States of America

December 2010

This report is based on sources considered reliable. However, INTERQUEST, Ltd. cannot guarantee its accuracy, completeness, or reliability due to errors in fact or judgment.


Contents

Contents .................................................................................................. 3 Figures .................................................................................................... 4

Background & Methodology .....................................................................5 European Book Market ..............................................................................7

Book Sales .........................................................................................7 Key Trends .........................................................................................8

Digital Printing...........................................................................................10 Level of Adoption............................................................................10 Equipment Purchase Plans...............................................................12 Applications & Print Volume .........................................................12 Inkjet Presses ...................................................................................18 Finishing & Paper ...........................................................................19

Market Forecast .........................................................................................21 Technology Developments ......................................................................22

Printing Systems...............................................................................22 Finishing & Binding........................................................................25

Conclusions ................................................................................................28 Glossary of Terms ....................................................................................29


Figures

Figure 1. Types of books printed on conventional & digital equipment by book printer respondents.....................................................................................................................................5

Figure 2. Growth trends in book sales among publisher respondents ..................................................7 Figure 3. Leading trends in the book market cited by publishers ...........................................................8 Figure 4. Leading trends in the book market cited by printers ...............................................................9 Figure 5. Printer respondents with digital equipment used for book printing ...................................10 Figure 6. Printers’ length of involvement with digital book manufacturing.......................................11 Figure 7. Printers’ acquisition plans for digital printing equipment .....................................................12 Figure 8. Types of books printed on digital equipment by printer respondents................................13 Figure 9. Monochrome & color volume produced on digital system by printers ..............................14 Figure 10. Run lengths of books produced with digital equipment .......................................................15 Figure 11. Respondents currently involved in distribute-and-print ........................................................16 Figure 12. Percentage of static, versioned & personalized digital print volume...................................17 Figure 13. Binding configurations used for digitally produced books ...................................................19 Figure 14. Paper used on digital & conventional equipment to produce books...................................20 Figure 15. Percentage of books produced on digital equipment, 2010 & 2015 ...................................21 Figure 16. Xerox Color 800/1000 press .....................................................................................................23 Figure 17. HP T200 Color InkJet Web Press .............................................................................................24 Figure 18. Muller Martini AmigoPUR Perfect Binder ..............................................................................26 Figure 19. Hunkeler PF7 Double Plow Folder ..........................................................................................27


Background & Methodology

The main objective of the study was for INTERQUEST to analyze the level of penetration, use, and the future of digital printing in Europe. One-hundred twenty (120) telephone interviews were conducted with key book publishers and printers, distributors and large retailers, as well as with trade associations in the U.K., France, Germany, Italy, and Spain. We also used secondary research from various sources on an as-needed basis.

On average, book manufacturing accounts for 76% of the book printers’ revenue. Nearly two-thirds (64%) of the respondents produce trade books (either adult trade, juvenile trade, or both). Professional/scientific books and education (Elementary/High School) books are produced by more than half of the respondents.

Types of Books Produced

28%

8%

8%

14%

14%

28%

33%

33%

36%

56%

58%

58%

Other

Comics/Manga

Self Published

University Press

Religious

Coffee Table

Higher Education

Mass Market Paperbacks

Juvenile Trade

Education

Professional/Scientific

Adult Trade

% of Respondents

Figure 1. Types of books printed on conventional & digital equipment by book printer respondents

(Source: INTERQUEST)


Trade books (adult and juvenile) account for 46% of the total book volume produced by the publisher respondents, while mass market paperback books account for 22%. Professional/scientific books account for 9% of the total volume of books produced, and education books (Elementary/High-school and higher education) for 19%.

In order to avoid potential confusion, the following terms and definitions are used in this report:

Short-run vs. on-demand printing—the study employs two different terms to describe low-run production. We use the term on-demand to signify printing (down to a quantity of one) at the time someone places an order for a publication. Short run is defined as any small production quantity, which is usually below the break-even curve for offset and digital production. These are clearly not hard and fast definitions, but generally speaking, on-demand print runs generate copy counts between one and 50 units, while short-run book production generally involves more than 50 units, up to and often exceeding 1,000 units.

Distribute-and-print vs. distributed printing—two different models of producing books in a distributed manner are treated in the report. Distribute-and-print signifies centralized production at strategic locations, such as regional warehouses, or overseas. Distributed printing signifies book production in POS environments such as retail bookstores and university campuses.


European Book Market

Book Sales

Over the past two years book sales have declined in most major European countries. In 2009, book sales (in value) declined by 17% in the U.K., 2.4% in Spain, and 3% in Italy, while they remained relatively stable in France and Germany. Despite the weak industry data, about 41% of the book publishers interviewed for this study expect their book sales to grow over the next three years. Eighteen percent (18%) see their book sales remaining stable and only 18% project a decline.

Growth Trends in Book Sales(% of Respondents)

Don't Know, 23%

Growth, 41%

Decline, 18%

Flat, 18%

Figure 2. Growth trends in book sales among publisher respondents



Key Trends

Book publishers interviewed for this study cite “electronic delivery/eBooks” as the top trend in the market (48% of respondents), followed by “better inventory management” (33%) and “the move toward digital printing” (33%), and “shorter run lengths” (29%).

Top Market Trends

29%

33%

33%

48%

Shorter Runs

Move to Digital Printing

Better Inventory Mgt.

ElectronicDelivery/eBooks

% of Respondents

Figure 3. Leading trends in the book market cited by publishers (Source: INTERQUEST)


When asked for the top trends in the book market, book printer respondents most often cite “shorter run lengths” (65% of respondents), followed by “impact of inkjet” (16%) and “electronic delivery/eBooks (16%), and “quicker turnaround” (13%).

Top Market Trends

13%

16%

16%

65%

Quicker Turnaround

ElectronicDelivery/eBooks

Impact of Inkjet

Shorter Runs

% of Respondents

Figure 4. Leading trends in the book market cited by printers (Source: INTERQUEST)

The European book market is extremely consolidated with a few large publishers and printers generating most of the revenue. We expect more consolidation to occur over the next few years.

Returns have been a key issue for book publishers around the world for years. In Europe return rates vary from country to country, ranging from 10% to 30%.


Digital Printing

Level of Adoption

As stated earlier, the adoption of digital printing is among the top key market trends reported by the book publishers interviewed for this study. Over the past two years we have noticed a growing interest from publishers—particularly the larger ones—in digital printing. All of the publishers interviewed for this study have some of their books produced on digital printing equipment, while over three-quarters of the book printers interviewed have digital printing equipment which they use for book production.

% of Printers With Digital Printing Equipment

Have, 78%

Do Not Have, 22%

Figure 5. Printer respondents with digital equipment used for book printing



About 70% of the printer respondents have more than five years of experience in digital book printing, while 11% are relative newcomers, having been involved for less than one year.

Years of Involvement in Digital Printing

<1 year, 11%

1-2 years, 7%

3-4 years, 11%

>10 years, 33%

5-9 years, 37%

Figure 6. Printers’ length of involvement with digital book manufacturing



Equipment Purchase Plans

Nearly two-thirds of the printer respondents indicate they intend to purchase digital production printing equipment. Nearly three-quarters of those planning to acquire digital printing systems indicate they will purchase inkjet presses.

Future Purchases (% of Respondents)

Do Not Know, 26%

Yes, 63%No, 11%

Figure 7. Printers’ acquisition plans for digital printing equipment


When asked to rank the likelihood of purchasing a digital book printing system from a particular vendor over the next 18 to 24 months, respondents rank HP (inkjet and Indigo) the highest, followed by Xerox and Océ.

Applications & Print Volume Professional/scientific books, trade books, and higher education books are the books

most commonly produced on digital equipment by book printer respondents.


Books Printed on Digital Systems

14%

10%

14%

19%

19%

19%

22%

48%

52%

71%

Other

Coffee table/Arts

Self Published

University Press

Religious

Mass Market Paperbacks

Education

Higher Education

Trade

Professional/Scientific

% of Respondents

Figure 8. Types of books printed on digital equipment by printer respondents (Source: INTERQUEST)


Ninety-five percent (95%) of the volume produced by the book printer respondents on digital printing equipment is black and white, and 5% is full color. The volume of spot/highlight color produced by respondents is marginal (less than 0.5%).

Digital Print Volume (% of Total Volume)

Monochrome, 95%

Color, 5%

Figure 9. Monochrome & color volume produced on digital system by printers



Print runs of less than 5,000 copies account for 35% of the book printing jobs produced by the book printer respondents interviewed for this study with conventional equipment.

Print runs of less than 500 copies account for over three-quarters of the total digital jobs. Print runs of one to nine copies account for 10% of the total book printing jobs produced by the respondents on digital printing systems. Print runs of less than 500 copies account for over three-quarters of the total digital volume, while run lengths of more than 500 copies account for the rest.

Digital Print Runs

24%

43%

33%

500+

100-499

1-99

% of Jobs

Figure 10. Run lengths of books produced with digital equipment (Source: INTERQUEST)


About 20% of the book printer respondents to the survey who have digital printing equipment are involved in distribute-and-print. Overall, the percentage of digital print volume produced by the respondents in a distribute-and-print manner is very small.

Distribute-and-Print (% of Respondents)

Involved, 20%

Not Involved, 80%

Figure 11. Respondents currently involved in distribute-and-print



Although nearly half of the book printer respondents to the survey using digital equipment to print books report that some of the books they produce digitally involve a certain level of customization/ personalization, the vast majority (97%) of the print volume produced by the respondents on digital printing systems is static.

Digital Print Volume (% of Total)

Static, 97%

Customized/personalized, 3%

Figure 12. Percentage of static, versioned & personalized digital print volume



Inkjet Presses

About one quarter of the publishers interviewed express an opinion about ink jet presses, the rest say that they don’t know enough about the machines. Following are some of their comments:

“We do not use inkjet yet, but we have been testing. Today the price of inkjet is still high but there is no doubt it’s going to come down.” (Large French trade publisher)

“We looked at several systems and I think there are no more quality issues. However, cost remains for us the decisive factor in making a choice of a certain printing technology.” (German publisher mainly involved in mass market paperbacks)

“The print quality produced by the new inkjet presses is optimum. The ease of use and reliability have to be tested in the long run. (Large French publisher)

Eighteen percent (18%) of the book printer respondents either already have or are in the process of installing inkjet equipment for producing books. Sixty-five percent (65%) of respondents are interested or very interested in inkjet presses.

“We were at IPEX looking at the color inkjet presses, and we found that that print quality is no longer a problem.”

“We have been looking at inkjet to replace our offset equipment litho capacity. Right now inkjet is still very expensive to purchase and the quality still falls short of what we need. …The greatest challenge for inkjet is going to be expanding the range of substrates that can be used, while improving print quality. . . . At any rate we are anticipating we will get an inkjet press within the next two years. It will probably be a color device, but the majority of what we will produce will be monochrome books.”

“We will use one inkjet press to replace our current continuous-feed electrophotographic system. We will produce mono and color books such as how-to/practical guides. We are looking at the various inkjet presses now.

The respondents currently using inkjet presses for book production all indicate they are satisfied or very satisfied with the equipment.


Finishing & Paper

Perfect binding is the dominant binding method, representing about three-quarters of the bindings for books produced on both conventional and digital printing equipment by the respondents.

About 72% of books produced on digital equipment are bound off-line, while 12% are bound in-line, and 16% are bound using a near-line process.

Binding Configurations(% of Digitally Printed Books)

Off-line, 72%

In-line, 12%

Near Line, 16%

Figure 13. Binding configurations used for digitally produced books



More than three-quarters of the respondents with both conventional and digital printing equipment say that they use the same paper for both categories of equipment.

Paper Used on Digital & Conventional Equipment

(% of Respondents)

Different Paper, 22%

Same Paper, 78%

Figure 14. Paper used on digital & conventional equipment to produce books



Market Forecast

INTERQUEST projects that the overall volume of printed books (in units) produced in the five countries will decline by 1.5%-2% over the next five years. This decline will be the result of a general decline in reading, the impact of electronic books, and the growth of digital printing, which will help reduce waste, primarily in the form of returns. We expect the volume of printed books produced on conventional equipment will drop by 3.6% annually from 2010 to 2105, while the volume of books produced on digital printing systems will increase by 36% per year over the same period.

Currently we estimate that about 2.4% of the total volume of printed books in the five countries considered is printed on digital equipment. This percentage will increase to 12% by 2015.

Conventional & Digital Book Volume

98%

88%

2%

12%

2010

2015

(units)

Conventional Digital

Figure 15. Percentage of books produced on digital equipment, 2010 & 2015



Technology Developments

Over the past two years a number of technology developments for electrophotographic and inkjet printing systems (monochrome and color), finishing and binding equipment, and consumables (toner, ink, and substrates) have helped fuel the growth of digital book printing.

Printing Systems

Key technology developments for monochrome electrophotographic systems have occurred in three major areas.

New light-duty devices—InfoPrint recently launched a family of light-duty production printers and copier/printers based on a Ricoh print engine. The new systems feature speeds of 90, 100, and 135 impressions per minute.

Faster cut-sheet systems—Kodak announced the Digimaster EX300 (300 ipm) at drupa 2008, and Océ launched the VarioPrint 6320 (314 ipm) at Print 09.

Enhanced continuous-feed systems—In 2008 Océ launched the VarioStream 8000 Series which features enhancements in speed and print quality. At about the same time Xerox introduced the 650/1300 Continuous Feed Systems. At IPEX 2010, InfoPrint released the 4100 T models which provide print quality enhancements and lower TCO.

A number of developments with color electrophotographic systems pertinent to book printing have also taken place.

At the 2010 OnDemand show, Xerox launched the 80-ipm Color 800 and the 100 ipm Color 1000 presses which bridge the gap between the DC 7002/8002 systems and the iGen3/iGen4 presses.


Figure 16. Xerox Color 800/1000 press


Also, at OnDemand 2010, Konica Minolta introduced the bizhub PRESS C8000, which prints 80 ipm in black and full color.

At IPEX 2010, Canon launched the C7010VP and C6010VP full-color systems. Compared to their predecessors, the new machines provide enhancements in the area of throughput and color management.

In the 100+ ppm high end segment of the market HP, Xerox, and Kodak unveiled new presses in the past six months:

HP unveiled the HP Indigo 7500 press at IPEX 2010. The new sheet-fed press offers productivity and print quality improvements compared to the 7000.

At Graph Expo 2010, Xerox announced the Xerox iGen4 EXP which provides 14.33” x 26” output, expanding its capability to produce dust jackets for books.

Kodak displayed the NexPress SX platform at Graph Expo 2010. The new platform provides 14” by 26” output at speeds of 131 impressions per minute.


For the very high end (200+ ppm) of the color electrophotographic market Xerox and Océ announced new presses at the end of 2009.

Over the past 12 months the leading vendors have expanded their inkjet press portfolios by announcing new configurations of current systems or new platforms. Key enhancements include greater flexibility and productivity as well as better print quality.

Kodak officially announced its Kodak PROSPER 5000XL Press for color applications and Kodak PROSPER 1000 Press for monochrome applications at IPEX 2010. Both presses, which use Kodak Stream inkjet technology, are targeted at the book, direct mail, and catalog markets. The presses feature a print speed of up to 650 fpm with image quality approaching 175 lpi.

Also at IPEX 2010, HP announced the T200 Color InkJet Web Press, a 20.5” full-duplex four-color press in a single engine. The press prints at 400 feet/minute in monochrome mode and 200 feet/minute in full-color mode. At Graph Expo 2010, HP announced the T350 Color Inkjet Web Press which offers speeds of 600 feet/minute and can handle up to 105 million impressions per month.

Figure 17. HP T200 Color InkJet Web Press

(Source: Hewlett-Packard)

Xerox gave a demonstration at IPEX 2010 of its inkjet technology that prints at 500 feet/minute.


Impika unveiled the iPress 2400, which is targeted at the graphic arts market. Speeds range from 76 meters/minute (250 feet/min.) at 1200 x 1200 dpi to 37 meters/minute (122 feet/min.) at 2400 dpi. It uses water-based dye and pigment inks, and Impika plans to add UV inks in the future. The new press will be available at the end of 2010.

Screen announced the Truepress Jet520ZZ at Graph Expo 2010. The system offers a maximum speed of 721.7 feet per minute.

In November 2010, Océ announced the ColorStream 3500 full-color inkjet press which prints at speeds up to 1,070 letter-size per minute. Unlike current Océ JetStream inkjet presses, which use a Myakoshi print engine, the ColorStream 3500 was entirely developed by Océ in Poing, Germany.

Finishing & Binding

A number of developments have taken place over the past 18 months in the area of pre- and post-processing and finishing. Vendors continue to make efforts to maximize productivity and efficiency of their systems. Recent developments from Muller Martini are aimed at allowing customers to plan work and make easy job changeovers.


In recent months Polyurethane Reactive (PUR) binding has been gaining momentum in the digital printing market. PUR is an aggressive adhesive that provides better wetting of paper fiber than conventional “hot melt” adhesive, resulting in greater page pull-strength and higher quality for digital color pages printed on coated stocks. It also produces books with a lay-flat binding that will not crack and that can be trimmed and packed within minutes.

Figure 18. Muller Martini AmigoPUR Perfect Binder

(Source: Muller Martini)


A number of developments have taken place for 30”-wide inkjet presses. Since drupa 2008, CPI—the largest European book manufacturer—has worked with HP, Timsons, Magnum and Muller Martini to develop a finishing solution for its inkjet press which uses HP technology. At IPEX 2010 Hunkeler demonstrated its PF7 Double Plow Folder which can process 30”-wide paper webs at 650 feet/minute.

Figure 19. Hunkeler PF7 Double Plow Folder

(Source: Hunkeler)

C.P. Bourg has announced the Book-Trac option for its BB3002 and BBF2005 perfect binders. This solution ensures cover-to-content matching via barcodes, enables cover-driven workflows, and drives fully automatic trimming. Book-Track enables users to increase manufacturing productivity and reduce waste. It is targeted at on-demand book printers who receive a large number of orders from print buyers for small quantities of copies via web-to-print.

In other pre- and post-processing and finishing developments, QR Codes are being incorporated into some books to enable readers to access additional content such as text, images, and video on the Internet using their cellular phones.


Conclusions

There a number of similarities between the book publishing business in North America and Europe. Despite these shared issues and concerns, however, important differences in book publishing exist between the U.S. and Europe, as well as among European countries. These include differences in marketing practices, pricing regulations, level of imports/exports, run lengths, requirements in terms of quality, adoption and attitude towards digital printing. We see the UK currently as the most active country in digital book printing—behind the U.S. but ahead of the other European countries. However, when it comes to the adoption of inkjet technology we see the UK lagging behind France and Italy.

eBook sales currently represent a small percentage of European publishers’ total sales. Although nearly half of the respondents to our survey are reluctant to predict where their eBook sales will be in three years most anticipate significant growth. As in the U.S., eBook sales to date have been mainly concentrated in the professional/scientific sector and have made relatively modest inroads in the trade and education sectors, which combined account for over 80% of total book sales.

As in the U.S., book sales in Europe have declined over the past two years. INTERQUEST expects the volume of books produced in Western Europe to decline slightly from 2010 to 2015. The volume of books produced on conventional equipment will decrease by 3% to 4%, while the volume of books produced on digital equipment over the same period will increase at a rapid pace. Most of the digital growth will come from offset displacement, and a small percentage from self publishing.

About 5% of the digital book printing volume reported by the printers interviewed for this project is color. This is noticeably higher than the 1% to 2% reported in our European surveys two to three years ago. We estimate that color could account for nearly 10% of digital book printing volume by 2013.

Over the past three years we have seen a significant increase in the percentage of the book volume finished in-line on digital printing systems. In the past, in-line finishing was often seen as unreliable (not as rugged as finishing equipment traditionally used for conventional printing), unproductive (if the printing system fails, finishing stops), and not flexible (inability to feed the output of several printers to one single piece of finishing equipment).

In general, book printers in Europe are very interested in inkjet printing technology for book applications, and most realize that this is where the future is headed. We expect many among the large/medium-sized book printers, as well as commercial printers who produce books in the major European countries analyzed for this study, will install inkjet presses over the next two years.


Glossary of Terms

CAGR (Compound Annual Growth Rate).

Case Binding—Binding method commonly used for hard cover books involving the application of end sheets and binding cloth to the spine of the book block, after which a hard cover or case is glued. Case bound book blocks may consist of sewn signatures or loose perfect-bound sheets.

Continuous Feed—Web-fed printer.

Cost-per-page—Cost per impression produced on digital printing equipment, usually understood to only include consumables (excluding paper), but not maintenance and equipment acquisition. See also “TCO.”

Customization—Producing relatively short runs of identical documents for geographic or demographic purposes. See also “Versioning.”

Cut Sheet—Generally refers to pre-cut letter-size, legal, and ledger-size paper. Sheets larger than 17” x 22” are called folio sheets.

Digital Press—A digital printing system generally targeted at commercial printing applications but also used for full-color transactional printing. Digital presses generally cost more, have higher duty cycles, and require a higher skill level to operate than production copiers.

Distribute-and-print—Transferring a print job for production at a location closer to its end use.

Drupa—The largest printing trade show in the world, held every four years in Düsseldorf, Germany.

Duplex Printing—Printing on both sides of a page.

Duty Cycle—Manufacturer recommended monthly print volume for a digital printer.


eBook (Electronic Book)—Book, manual, magazine, or other content stored and read on a computer, portable device, or dedicated electronic reader.

Electrophotography—A digital printing process that uses a light source such as a laser or LED to selectively charge or discharge a photoconductive surface.

Full (Process) Color—Color printing using subtractive color secondaries (cyan, magenta, yellow) plus black. Black is necessary because impurities in pigments prevent an equal combination of cyan, magenta, and yellow from absorbing the entire color spectrum and producing a pure black.

Higher Education (HE)—Education beyond grade 12.

IPEX—The second largest printing trade show in Europe, held every four years in Birmingham, U.K.

IPM (Impressions Per Minute)—Imaging one side of an 8.5” x 11” page.

Mass Market Books (MMP)—Books produced for consumption in large numbers and often distributed in supermarkets, drug stores, and other retail outlets for the general public.

Perfect Binding—Binding method commonly used for soft cover books which involves milling or roughing the binding edge of the book block to promote glue penetration before a soft wraparound cover is applied.

POD (Print-on-Demand)—Printing the quantity needed when needed (versus printing to inventory). In the context of digital book production, on-demand print runs generally entail one to 50 units.

PPM (Pages Per Minute)—Printer speed expressed as A4 pages per minute.

Professional Books—Books related to a profession or professional topic.

PUR (Polyurethane Reactive)—Book binding adhesive.

QR Codes (Quick Response Codes)—Two-dimensional barcode readable by QR scanners, mobile phones equipped with a camera, and smart phones.


Returns—Unsold books returned to publishers by distributors, and eventually discounted or destroyed at the publisher’s expense.

Self-Publishing—When a book is designed, printed, and distributed by and at the expense of the author. See also “vanity publisher.”

Short Run—Relative expression of the length of print job. In the context of digital book production, short runs generally involve producing more than 50 units.

TCO (Total Cost of Operation)—Cost per impression produced on digital printing equipment, including consumables (other than paper), maintenance, and equipment acquisition. Although a thorough analysis would also include labor and overhead, there is no industry standard for calculating TCO.

Throughput—Characterizes a printer’s ability to complete a job in a given time—the actual rate at which printing occurs, not necessarily synonymous with rated speed.

Trade Book—Any title that is not educational or scholarly in nature.

University Press—Non-profit organization which publishes and disseminates the results of scholarly research and writing. University presses are usually partially underwritten by their parent organization.

Documents

Europe Digital Book Printing Study