Taking Advantage of Market Disruption in Book Publishing (PDF, 1.8 MB)

Book Publishing Business

Taking Advantage of Market Disruption in Book Publishing

2 Taking Advantage of Market Disruption in Book Publishing

If you believe there is no disruption within the book publishing business, following are excerpts from press releases that came out as the industry was gearing up for Book Expo of America 2011:


April 14, 2011In a sign of the growing maturation of its publishing program, Amazon has sold trade paperback rights to 10 titles in its Encore and Crossing imprints to Houghton Mifflin Harcourt.

May 4, 2011With digital content generating 18% of total revenue in the first quarter of 2011, Simon & Schuster reported that profits more than doubled and sales rose 2% to $155 million.

May 4, 2011Similar to Hachette Book Group and Simon & Schuster, e-books led the gains at Harlequin in the quarter. E-book sales in North America rose C$7.1 million, offsetting a C$1.7 million decline in print retail sales and a C$800,000 decline in print sales through its direct-to-consumer business due mainly to a drop in sales via online retailers. Digital sales accounted for 13.6% of total revenue in the quarter, or about C$15.6 million.

May 5, 2011HarperCollins had lower book sales in the third quarter ending March 31, according to parent company News Corp.’s 10-Q filing with the SEC. In a statement issued by HC, the company said e-book sales in the quarter accounted for 19% of sales in the U.S. and 11% worldwide.

May 9, 2011In the rapidly changing publishing industry, lines between different parts of the business are blurring like never before and that could not be more clearly seen than in last week’s separate announcements from Amazon and from Bookish, the soon-to-be launched online book platform that has the financial backing of Simon & Schuster, Penguin, and Hachette Book Group. Amazon’s fall launch of Montlake Romance pushes the company deeper into the publishing business than it has ever been, while the launch of Bookish gives publishers their first destination site where titles from all publishers will be available for sale.

May 12, 2011HarperCollins Publishers and RR Donnelley … announced their intent to enter into a breakthrough global supply chain agreement. The agreement is the first of its kind for a major general trade publisher. Under the terms of the proposed agreement, beginning in November 2011, RR Donnelley will handle the fulfillment of all HarperCollins new releases from its Harrisonburg, VA facility. Additionally, beginning in July 2012, RR Donnelley will handle fulfillment of all frontlist and backlist titles for Zondervan, a division of HarperCollins Publishers. RR Donnelley will also provide global print-on-demand (POD) services to HarperCollins, enabling most titles to be printed anywhere HarperCollins holds publishing rights. The agreement also renews and expands

RR Donnelley’s role as the printer, binder and distributor of HarperCollins’ conventionally produced titles.

May 19, 2011After increasing at a 169% rate in the first two months of 2011, e-book sales rose at a relatively modest 145.7% clip in March, to $69 million, according to the 16 publishers who report figures to AAP’s monthly sales estimates.

“ iPads and other tablets will be in the possession of about 20% of college students by the fall of 2012,” says Xplana director of research, Rob Reynolds. “That's a huge impact. It’s the fastest growing technology that we've seen in education.”

Reynolds predicts e-book sales growth in the higher education market will double over the next four years to $1.5 billion by 2015, and account for 25% market share.

Taking Advantage of Market Disruption in Book Publishing 3

As these and other announcements indicate, there are two separate and distinct changes that are taking place within publishing today that will have a significant impact on how content is created and comes to market in the future. The two changes revolve around the traditional model of book publishing and the rapidly emerging model for self-publishing. Both of these changes affect the manner and speed in which content comes to market and the change in the distribution model that is critical to their success.

Traditional book publishers are faced with the challenge of both creating products that will best meet the needs of their customers and authors while at the same time reinventing their model for profitably going to market. The current publishing value chain carries a significant cost burden that is associated with the print, ship, store and fulfill order paradigm that has dominated the industry for close to 80 years. This model is burdened with a waste factor of 30 to 50% depending on the publishing market segment.

The emerging self-publishing model is even more significant. It opens the door for literally millions of content creators to produce books at an economical price. Consider this: there are only about 316,000 traditional titles

published in the U.S. By comparison, self-publishing and re-publishing of out-of-copyright materials created more than 2,776,260 new titles in 2010. In fact, according to Bowker, the exclusive source of ISBNs in the U.S., the nontraditional book publishing space grew 169% in 2010 from the approximately 756,000 titles released in 2009 to the 2.8 million referred to above. This growth is actually understated as it reflects only those titles where the author purchased an ISBN number. There are also thousands of titles released every year on self publishing platforms like the Espresso Book Machine®, where no ISBN is ever requested or issued.

The power of this model is clear. Anyone can become a published author with the

available online tools. In addition, products like the Espresso Book Machine enable the creation and production of these titles within the retail environment, eliminating all of the costs associated with inventory, shipping and oversupply.

Add to this the challenge of alternative delivery systems such as e-readers and the impact growing sales of e-books are having on the overall mix of books sold, and you clearly have an industry in the throes of massive disruption.

This document discusses the state of the book publishing industry, and the impact that the structural change it is undergoing will have on publishers, book retailers and book printers.

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Growth of Self-Publishing and Nontraditional Titles


The combination of the impact of the Internet, the transition from analog to digital and the recent economic downturn has accelerated the rate of change impacting the book publishing and printing markets. Add to that the growing control consumers have over content—both its creation and its consumption—and their changing behaviors, most book publishers and printers have come to the conclusion that the business models that worked so well for them in the past are no longer effective.

Although change breeds challenges, it also breeds opportunities. Savvy publishers and printers are looking to new technologies to create a more effective business model and a more efficient supply chain for a more profitable future.

Book Publishing: A Market in Transition



According to research firm INTERQUEST1, the book publishing industry has historically weathered recessions well, and the most recent case is no exception. The U.S. Census Bureau estimates that retail bookstore sales dropped slightly less than 1% in 2009 compared to the prior year, while overall retail sales declined 7.5%. As the economic turbulence began to settle, retail sales surged in the last six months of 20102 resulting in an uptick of 6.7% for the full year, compared to 2009. Retail book sales, however, continued their decline, down 1.5% from 2009, from $16.732 billion to $16.497 billion, according to the United States Census Bureau.

Structural Changes Abound

1 Digital Book Printing: Market Analysis & Forecast (2010–15), INTERQUEST 2010

2 Retail Sales Surged 6.7% in 2010, The Associated Press, January 14, 2010


The chart below shows retail bookstore sales have declined four out of the last five years. In its recent forecast, INTERQUEST attributes this to the dual impact of tightening of consumer wallets and a general decline in readership of printed books. As this transition continues, in order to survive, retail bookstores, which have been a community gathering place for years, will need to reinvent themselves with products and services that enable them to continue to be a gathering place.

While consumer wallets have loosened up somewhat as the economic recovery continues, the downward trend of reading printed books is a concern and is likely to continue as consumers seek other means of gaining information and entertainment in lieu of printed books. This is reflected in the continuing decline of retail book sales.

It should be noted however, that by combining the sales of e-book units with printed units, the total number of books being sold has increased year over year. This leads to the conclusion that e-books may be having a positive impact on either attracting new readers or expanding the reach and spend of traditional readers. But they are also having a devastating impact on traditional book retailers.

These changes have left retail channels in disarray. Book superstores such as Barnes & Noble have placed pressure on independent bookstores, and now are facing financial pressures themselves. Over the past two years, Barnes and Noble has placed the majority of its investments in its e-book strategy and e-commerce site. Nontraditional book sellers such as Walmart, Target, and even some apparel stores, are placing pressure on both independent bookstores and their superstore competitors as they add books to the wares they sell. While this is good for the book publishing industry overall, it is driving significant channel change, price pressure and the need to revamp what was once a profitable supply chain despite the waste that was always inherent in the system.

On the down side, Borders Group, Inc., which includes Borders and Waldenbooks, filed for Chapter 11 protection in February of 2011 and now is shutting down completely. This action is already taking its toll on the book printing industry, with printer and publisher Courier Corp. being one of the first publicly traded companies to report a meaningful

negative impact from the Borders bankruptcy, combined with other events.

For many years, Barnes & Noble and Borders battled it out as the top two U.S.-based brick-and-mortar retailers. A clear differentiator between the two, however, was the fact that Borders had no digital strategy, while Barnes & Noble has both its Nook e-reader and an active digital book sales channel, and it is also playing a growing role in specialty markets. Barnes & Noble College Booksellers, a subsidiary of Barnes & Noble, was acquired by the company in 2009 and operates bookstores at more than 600 U.S. colleges and universities, offering both paper and digital course materials and another channel for its Nook e-reader. In addition, Barnes & Noble has a robust online storefront for those preferring to shop from home, bolstered by the acquisition of Fictionwise, a leader in the e-book marketplace, in March of 2009. This gave the retailer the world’s largest e-bookstore, a leadership it held until Google

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Retail Sales at Bookstores

Source: INTERQUEST

Retail bookstores account for about one-third of book publishing revenues.


launched eBookstore with more than 3 million e-books in its library. Launched in December of 2010, the service allows users to purchase e-books from Google or from a range of independent booksellers. While it doesn’t explicitly support the ubiquitous Amazon Kindle format, Kindle can read many “open” e-book formats available through Google.

Independent bookstores are also making changes, widening their appeal by installing products like the Espresso Book Machine®, which allows the store to print a paperback book in minutes right in the store from a digital library of over four million in-copyright and public domain titles. The Espresso Book Machine also allows the book retailer to become a service provider to the explosive

world of nontraditional publishing which accounted for more than 2.8 million new or re-published titles in 2010, nearly nine times the number of traditional titles with another triple digit growth year projected for this expanding segment. This approach streamlines the supply chain for printed books and places independents on a near-level playing field with larger superstore sellers of books—and even online sellers such as Amazon. This also places the retailer in the position of being a publishing service provider which, combined with the Espresso Book Machine, gives them a unique consumer-facing capability. Assuming they move quickly enough to reinvent themselves, both independent and superstore booksellers will survive because they focus on the personal experience, which is better accomplished in a bricks-and-mortar environment than it is online.

All of these changes ultimately have an effect on the book printing market. Some industry experts estimate that centralized printing of books will shrink as much as 33% over the next five years. Agreements such as the one between book printer RR Donnelley and Harper Collins Publishers that build in a distributed print model are most likely to be successful in the future. On demand book printers such as Ingram’s Lightning Source, that can cost-effectively print books in a quantity of one, will also see growing demand. But traditional long-run book printers will find themselves serving a shrinking pie, and their revenues are likely to reflect that shrinkage.

During this time of turmoil, authors are not sitting still either. Self-publishing is growing more sophisticated, even to the point of changing the nature of a book. One example

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Evolution of Book Publishing


is the Love/Hate book published in Brazil. The book consists of pages of QR codes that, when snapped by a smartphone, display things that contributors love or hate, such as, “I love going to the beach,” or “I hate it when it rains when I am at the beach.” This unique approach allows the book to be evergreen as the links behind the QR codes can be changed at any point, delivering a continuously evergreen book. This “buy once, use many” approach opens an entirely new vista for printed books that is only limited by the imagination of authors and publishers.

Another example is the Domino Project, founded by Seth Godin and powered by Amazon, designed to change the way books are built, sold and spread. This bestselling author is walking away from traditional book publishing and using the tools of new media to bring his, and his colleagues’, ideas to the world in a new way. Its first title, Poke the Box, has a hardcover street price of less than $10 and offers new formats, including a $75 collectible edition (limited edition, signed by the author), a Kindle version, and a way for these authors to bring a new book to market within six weeks—rather than a year—after it is finished.

Authors need not be well-established to take advantage of the new business model. A 2010 Wall Street Journal article, Vanity Press Goes Digital, featured author Karen McQuestion, who had spent nearly a decade trying to persuade a variety of New York publishers to print one of her books. Failing to get their attention, she decided to self-publish for the Amazon Kindle platform. Her book, A Scattered Life, has sold 36,000 electronic

copies and has a film option with a Hollywood producer. In addition, Amazon released the book as a formal Kindle edition as well as in paperback under its Encore imprint. In an interview with WhatTheyThink, McQuestion said, “Everyone thinks I have a magic bullet that’s not readily apparent. That isn’t the case. I am 100% a nobody, a woman in Wisconsin who works in my basement, with no real connection to publishing or to Amazon. I just became very driven and made it my business to learn everything there is to know about self-publishing on Kindle. I tried to figure out if I were a consumer looking for my type of book, how I would go about finding it?” McQuestion had six books listed in the Amazon Kindle bookstore as of this writing.

Another emerging trend made possible by the digital world is participative editorial. This allows authors to give readers a view of what they are doing on websites such as Tumblr as well as their own author pages, and get feedback as the book proceeds. This is most common in scholarly and academic publishing but could easily extend to other publishing silos, including trade publishing.


In late 2010 and early 2011, a plethora of new digital print technologies entered the market, some of which may appear in a book printing plant near you soon. Most of the news has been about high-speed, high-capacity inkjet web presses that hold the promise of lower costs and broader applicability for centralized book printers. The other news has been about the growing impact of the Espresso Book Machine® and its print at retail model that offers book retailers new revenue opportunities and the chance to be a service provider instead of just a reseller of the books that are now available from multiple bricks-and-mortar and online retailers.

Over time, which of these technologies will be the game changer in books and create opportunity and growth?

The new inkjet technologies are still sorting themselves out as to capability, costs, reliability and quality; for the most part, these are offset substitution platforms. In order to fill capacity and pay for themselves, they will require the migration of volume from current offset platforms. The total number of books being sold is declining, which means that the current offset platform is already under a considerable amount of pressure to deliver a profit. Even before these new billion-page-plus capacity inkjet giants come on line, there is already an excess capacity issue in a declining market. This is usually not a good platform for a growth model. The printers who survive the rightsizing of the book production and publishing market will do so through downsizing their production platforms, and there will be a consolidation of the entire book printing platform. Not all book printers will survive this sea of change.

The Espresso Book Machine is different. It enables a new publishing, printing, distribution and retail model that will provide real revenue growth opportunities for those who choose to take advantage of its possibilities. The Espresso Book Machine is a customer-facing retail solution whose primary value proposition is built around its instant access to a large number of titles, its ability to immediately meet the needs of a consumer looking for a title that is not in the retailer’s physical inventory, and its unique position in the rapidly growing nontraditional and self-publishing arena. While the volume printed per title may never be more than a dozen, these titles can be produced while the buyer waits. It also avails authors of a growing digital distribution system represented by the On Demand Books Espress Net catalog of titles. In addition, its small 10 x 15 foot space requirement makes it an easy way for any book retailer to offer its customers access to more content then any book superstore could ever offer in its physical inventory.

The future for a solution like the Espresso Book Machine is very bright. As more traditional book publishers add valuable backlist titles to the On Demand Books catalog, the Espresso Book Machine grows in value. Imagine that you live in Joplin, Missouri, and your entire book

distribution and retail infrastructure has been destroyed by a tornado. All you need to get back in business—or start a new business—is a small retail space, an Internet connection, and a hook like a coffee shop or self-publishing center to bring customers into a virtual bookstore that is larger in content choice than any physical retail book supplier that may have existed prior to the disaster.

Now expand that thinking to any geography where there is a need for content but little or no book distribution or retail capacity and you can begin to see the bright prospects for the Espresso Book Machine business. It will all be growth revenue and will enable any number of new and exciting book retail models in geographies around the world.

High-speed inkjet will play a vital role in the re-equipping and rightsizing strategies of centralized book printers, but the Espresso Book Machine will enable revenue growth and the ubiquitous access to printed content on a global basis. In the end, this is a new model that represents true growth opportunity and not substitution.

Small is Better—The Impact of New Print Technology on Books

The Espresso Book Machine



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Brick-and-mortar retail book outlets only represent part of the picture. As evidenced by the huge success of e-readers from Amazon, Barnes & Noble and others (including the vast array of tablet computers entering the marketplace which, although not dedicated e-readers, offer that capability), consumers are increasingly turning to online sources for the books they do purchase, and are purchasing e-book versions in growing numbers.

The Digital Alternative

Research published by Enders Analysis in April of 2011 includes market data and industry anecdotal information that points to an explosion in e-book sales in 2011, as much as 10–15% of sales and growing. Early 2011 financial reports from publishers quoted in the introduction to this white paper support that projection. While e-books were initially strongest in niches (romance, business books, frequent travellers), the research indicates they have now moved into the mass market and few genres will remain untouched. At the same time, as the chart below reflects, there is an equally dramatic decline in paperback sales, leading some publishers to speculate that e-books could completely displace mass-market paperbacks.

Research conducted by Outsell, Inc. in 2010 reflects that by 2015, more than a quarter of book publishers expect between 25% and 50% of revenues to come from e-book publishing.

Source: The e-books explosion by Benedict Evans, published by Enders Analysis, April 2011

U.S. AAP Sample of Book Sales ($m)



Digital Natives Demand Different Information/Entertainment Sources

Still, the decline in readership of printed books is a factor publishers, book sellers and book printers alike must deal with as the growing population of digital natives finds other means of entertainment in lieu of print. This change in consumer behavior is more troubling for the retail book industry, resulting in a general decline of readership, primarily impacting the sale of trade books. The one bright spot here might be the surging demand for e-book titles which continued to be purchased at triple digit growth rates through the first five months of 2011. While final statistics are not yet available, it does appear that some trade book publishers actually sold more total units in 2010 than 2009 when both units for e-books sales and paper based books are added together.

E-books have grown from 0.6% of the total trade market share in 2008 to 6.4% in 2010. While that represents a small amount in the total market for formats, it translates to a 1,274.1% increase in publisher net sales revenue since 2008 with total net revenue for 2010 at $878 million.

Net unit sales growth for e-books was equally impressive, increasing 1,039.6% for the same three-year period. In 2010, e-book net units were 112 million.

Source: BookSTATS: Summary Overview


The challenge for the publisher becomes adjusting his investment and author compensation models to reflect this change in mix and increase profitability for the short term and the long term. Adding to these challenges is the 30% to 50% waste in the book supply chain, with publishers traditionally absorbing the bulk of the costs, including paying for returns that are not sold in bookstores in the traditional consignment model. Unsold books are typically returned in four months, and 60% to 95% of those books are destroyed by the publisher, creating concerns about both cost and the environmental impact of this excessive waste.

Other book publishing sectors are faring better than trade books from a readership perspective due to their more specialized nature, but the changes they are experiencing are equally as challenging.

State budget constraints at the elementary and high school levels are speeding the transition to electronic textbook versions. One example is the California Digital Textbook Initiative, which provides schools with a state-approved list of digital textbooks. Another is the recent passage of Florida Senate bill 2120, an education funding measure that, if signed into law by Gov. Rick Scott, will begin the transition of the state’s public schools to digital textbooks by 2015-2016. California and Florida represent two of the three largest markets for K-12 textbook publishers. If these states move to a stronger mix of digital content versus traditional printed textbook, it will have an extremely negative impact on the three or four centralized book printers who have a lock on the color printed textbook market today. Higher Education publishing continued to grow in double digits through the recession but also faced a strong move to electronic alternatives. Scientific, Technical, Medical and Scholarly (STMS) subscriptions are increasingly moving online, although this sector has also continued to grow. Regardless of sector, electronic versions generally sell for less than their paper counterparts, but the cost to produce and distribute them is also significantly lower, potentially resulting in lower topline revenue but higher profitability overall.

CourseSmart, an initiative founded and supported by five higher-education textbook publishers (Pearson, John Wiley, Cengage Learning, McGraw-Hill Education and Bedford, Freeman & Worth Publishing group) is another angle on publishing at the college and university level. With about 14 publishers participating today, CourseSmart’s objectives include:

• To provide an environment where faculty can access digital texts for evaluation purposes

• To create a marketplace where students can buy e-textbooks

• To support business partners

This effort brings together thousands of textbooks across hundreds of courses in an e-book format on a common platform. It stands to revolutionize the way publishing is done in higher education and is an initiative well worth watching. CourseSmart also represents a future channel for multiple new apps-based education book products, which will replace current higher education textbook products.


According to the INTERQUEST study, publishers report that the average turnaround for conventionally printed books is two to four weeks, compared to 11 days for digitally produced books. Publishers are not particularly concerned about the technology used, but they are concerned about cost and delivery time, often leaving the choice of technology to the printing establishment. For most books, current electro-photographic and

inkjet printing technologies deliver sufficient quality. Run lengths and turnaround time are generally the primary consideration for printers when choosing the technology to be used. INTERQUEST reports that the majority of book printers with digital equipment are producing runs of 500 or fewer on those devices, with larger quantities generally defaulting to offset, although runs as high as 1,000 can still be profitable on these devices. That number will continue to climb as higher-speed, higher-quality inkjet presses are introduced into the market.

For book printers, the changing landscape also presents challenges, but there are significant opportunities for those who are willing to invest in changes in their business practices, adoption of new technology and delivery of new and innovative services, beyond ink or toner on paper.

The Book Printing Landscape

These changes have also affected book printers in a big way, as demonstrated by the impact of the Borders bankruptcy on Courier as cited previously. They are hit with the challenge of declining volumes and run lengths while facing demand for shorter production cycles, increasing price pressures and rising cost of materials. Publishers are increasingly turning to print-on-demand and distribute-and-print models, as well as fulfilling the growing demand for e-books, and many book printers are not structured to be able to deliver these services cost-effectively and profitably. Offset printing, which has dominated book printing and is likely to do so at least for the near term, cannot cost effectively produce shorter runs nor deliver the shorter production cycles a fast-paced market demands, and is generally used for run lengths of 2,000 and above, although some lower run lengths are still produced using conventional offset technologies.



Opportunities in Book Printing

The move to shorter run lengths and faster cycle times provides opportunities for digital printers to participate in the book printing market, either working directly with publishers or by partnering with offset book printers looking for partners to produce shorter runs. This is driving growth in digital book volumes.

All sectors of the book market are exhibiting double-digit growth rates in digital impressions.

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TSP Trade University Press

Education

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OtherUniversity PressTradeEducationTSP

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Conventional and Digital Book Volume Growth Rate of Digital Impressions 2010-2015

Source: INTERQUEST


Publishers are pursuing several different models as they look to improve the book supply chain:

• Conventional offset printing is still the dominant method of book production, although most printers report flat to declining volumes in this area. Mass trade books, hit sellers—Harry Potter being a good example—and other books that have predictable sales volumes that justify offset printing are likely to remain in the offset arena for some time.

• Short-run books, including self-published books, pre-sale review copies, galleys or proofs and backlisted items (books that would normally be out of print), may be digitally produced in runs of 50 to 1,000 and placed in limited inventory awaiting orders, shipped directly to the publisher or author for distribution or distributed directly into the supply chain for larger orders that may combine several digitally produced titles.

• Print-on-demand or print-to-order books are just that—as an order comes in, the exact number of books are printed and shipped directly to the bookstore, publisher or self-publisher—or in some cases, directly to the end buyer. This is most common for self-published and backlisted books, although the ability to economically produce books in these small runs allows bringing many new books into print that never would have seen the light of day in the past.

• Print at point of sale is becoming more feasible with products such as the Espresso Book Machine®, a compact book printer “kiosk” often integrated with a Xerox® 4112® for printing book blocks, allowing book purchasers to select a book from a large digital library and produce it on-site within a few minutes. The current growth of titles on the Espresso Book Machine comes from self-publishing titles and the Google Library, but traditional titles are a growing part of the mix as On Demand Books adds more publishers to its catalog of titles.


For many large retailers who are beginning to add book sales to the mix, Espresso Book Machines® present an interesting opportunity that may help them avoid stocking large inventories of books that may ultimately have to be returned, and to place them in a better competitive position against online sellers of books, matching their nearly unlimited inventory and convenience. For book printers willing to look outside the box, providing a range of services for publishers or booksellers that include all four types of production can provide an interesting business model. This might include sale and on-site management of Espresso devices, on-site or nearby production of short-run books, and even distributed production and fulfillment of digitally printed books.

Of course, book printers who can format books into a wide variety of forms from a digital library—imposed and ready to print on large presses, configured for short runs on digital presses, and conversion to a variety of e-book formats—will have the most opportunity to benefit from growth in book printing as the market continues to shift to a more digital model and publishers look to remove inefficiencies from the supply chain.

Some publishers and retailers are placing short-run production on site for various reasons, including production of galleys and pre-sale review copies, textbooks and course packs for college and university book stores, and even print-on-demand for immediate fulfillment. One example is Bridge Publications, the non-fiction publishing arm of the Church of Scientology. By converting its shipping and fulfillment center into a digital manufacturing facility, Bridge was able to achieve return on investment within its first year of operation, while cutting costs by 30% and boosting production by a factor of 11, to more than 2.8 million units. Bridge now prints 95% of its books digitally, providing greater quality control and faster, more flexible turnarounds. Moreover, the plant enables Bridge to publish more of founder L. Ron Hubbard’s previously unpublished titles—often in short runs that aren’t cost-effective on offset and ranging to longer runs of as many as 20,000 volumes at a time—to fulfill its mission of distributing the church founder’s works.

As digital color printing becomes faster and continues to achieve improved price/performance ratios, the next big trend for digital printing of books will be in the production of full-color books, already popular in children’s books, STMS books and some educational books. While 90% of digital book impressions in North America

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Digital Print Volume

Source: INTERQUEST


Traditional Publishing Workflow— Retail Books A New Dimension of Self-Publishing

This process often means a book is brought to market a year or more following its completion by the author; author often completely loses editorial control. Waste in the sys-tem is absorbed by publishers based on overall book volumes. With changes in consumer behavior and demand, this model is no longer sustainable.

With contract in place, publisher edits book and prepares for release

Book published according to pub-lisher standards, generally hardcopy first, then e-book and paperback

Author secures agent or works directly with publisher

Books made available through a variety of channels including retail booksellers; publisher marketing support varies

Author creates manuscript

Average of 35–40% of all books in channel are returned to publisher for destruction, bargain table or other disposition

Emerging Publishing Workflow— Retail Books A New Dimension of Self-Publishing

For authors who choose to use a publisher, initial book runs are determined by projected demand and printed either offset or digitally. Book is placed in a digital library for print to order or print to limited inventory. Digital versions available. Significant reduction in supply chain waste, especially if book stores have capability to print on site.

Book is printed within six weeks and thereafter upon demand; virtually no waste in the system; electronic versions also made available

Author markets book through various channels, including social media

Author contracts with book designer to design book and cover

Author provides print-ready files to book printer; book printer may also offer design services

Books may be shipped on demand by author or book printer when order placed

Author creates manuscript


are monochrome today (growing at 24% per year from 2010 to 2015), INTERQUEST suggests that color impressions will grow by 44% annually, reaching 20% of total digital impressions by the end of that period. Most of this volume will come from the education markets, which currently represent the bulk of four-color volume for traditional centralized book offset printers in North America. Children’s books offer a unique opportunity, since much of this color volume is produced offshore today. With more economical high speed inkjet and faster turnaround times combined with the growing cost of transportation, this work could begin to migrate back to domestic manufacturing.

Book printers can also pursue a number of opportunities with the growing community of self-publishers, offering them new opportunities and services that will better enable them to get their works to market. This includes offering author services such as manuscript editing, cover and book design, short-run printing to limited inventory, print-on-demand or print to order and fulfillment services. One former quick printing company whose business was 90% production of business cards and stationery has transitioned within a few short years to nearly 80% book printing, and offers these author services. Initially, his model was to print books in minimum quantities of 250 and ship them to the author for fulfillment by the author when an order was received. This resulted in more work for the author

and double shipping fees. The printer has now added an inventory management and fulfillment service whereby the author simply conveys orders for shipment and provides authorization to refill inventory as levels get low.

In other cases, such as Blurb, Lulu.com and Lightning Source, self-publishers can place their books into digital inventory and manage their own orders, with the intermediary responsible for printing and distributing books. Lulu.com and Blurb work with a small number of book printers to print books based on various criteria; Lightning Source has its own printing facilities and offers conversion to e-book formats as well as links into distribution channels through its parent company Ingram.

Many authors are also creating resource web pages to accompany their books, allowing readers to gain access to more current information and to establish a dialog with the author and with other readers. These resources act to make books more flexible and interactive in accordance with the requirements of the digital age. Designing and supporting these web sites on behalf of authors is another service book printers can provide. In addition, the use of QR codes or other two-dimensional barcodes is gaining popularity because of their ability to make paper interactive and maintain currency of content.

QR Codes (Quick Response Codes) are two-dimensional bar codes that were initially used in the Toyota manufacturing process and that have been available for some time as open source code. With the increased adoption of smartphones, they are increasing in popularity in the United States. With your smartphone QR code app, simply point at this QR code and it will take you to an informative book printing site optimized for mobile devices.



In the two decades since the launch of the DocuTech, Xerox® solutions for book printing have continued to mature and become more economical. According to the INTERQUEST

research, Xerox® systems account for 47% of the respondents’ installed base of digital printing systems, with the research stating, “Xerox’s dominance is roughly equal in the monochrome and color segment.

Over the past five years Xerox has been able to maintain its market share in monochrome and color systems.”

Digital Book Printing: Tools and Techniques

Since the early 1990s with the introduction of the Xerox® DocuTech® Production Publisher, Xerox has been delivering innovative digital book printing solutions to the market. The initial focus of these efforts was aligned with the needs of the software documentation business and the early adopters of print-on-demand solutions. The economics of these early models had a limited scope of end user benefits due to the cost of producing the targeted documents, and worked well when printed documents accompanied high value products and software from companies such as IBM, Microsoft and HP.


Xerox® Printing Solutions for Book PrintingXerox understands the business from the largest book printer to the smallest retailer. No other company has that perspective. The redefinition of the entire supply chain for books which is taking place now is resulting in a change in the way the book itself is being built and written. E-books are not a different product, simply a different format. Initiatives such as CourseSmart are completely changing the educational book market. These initiatives and more are changing the business. Along with that change, Xerox continues to evolve and change its book printing and publishing offerings. Here are a few of the components that can be utilized to build a modern book publishing/printing platform:

• Xerox Nuvera® EA Digital Production Systems (monochrome) range in speed from 100 to 288 ppm. The systems incorporate many of the technologies developed for the iGen3® such as paper handling, non-contact imaging via a “toner cloud,” trickle development where the fuser is packaged along with the toner, and electrostatic removal of waste toner. The units feature an integrated DocuSP® controller and produce 4800 x 600 dpi images on paper ranging from 16 lb bond to 80 lb cover up to 12.3" x 18.5".

The Nuvera EA systems use EA Toner, Xerox®’s patented chemically grown toner that has extremely small particles, resulting in a smooth, consistent offset matte finish and sharper details compared to conventionally produced toner. EA Toner also improves the overall reliability of the machine, requires less energy to manufacture and generates less waste.

•TheXerox® 625/1300 monochrome web press which runs at speeds of 300 feet per minute is the highest quality toner-based digital web press in the market today. The unique flash fusing system requires less heat and pressure then competitive offerings. This improves the moisture control and stability of the sheet, which in turn expands the range of papers which can run effectively on the press. The range of uncoated papers goes from light weight 40 gsm up to 200 gsm.

•Xerox® Color 800/1000 presses achieve print speeds of 80 ipm and 100 ipm, respectively.

•Atthehighendofthecut-sheetsegment,Xerox offers the iGen3 model 110 (110 ppm) for printers requiring higher print volume. The press can be driven by the Xerox® DocuSP controller, which targets customers accustomed to Xerox® workflows, as well as controllers from EFI and Creo.

•TheXerox® iGen4® increases productivity by 25% to 30% over the Xerox® iGen3 by automating operator tasks and reducing the need to interrupt the press for adjustments. A number of technology enhancements in the press also improve image quality. The iGen4 features a high-speed in-line spectrophotometer in the paper path which improves image quality and spot color accuracy. The iGen4 offers the same rated speed as the iGen3 (110 ipm).

•The220-ipmiGen4220PerfectingPresscombines two iGen4 print engines working in-line to produce 220 full-color impressions per minute. Based on the same approach as the Nuvera 288 monochrome system, the press uses the first engine to image one side of the paper and the second engine to print the reverse side.

•TheiGen4EXPsupports14.33"x23"output. It can print 40 sheets per minute on the larger sheet size, accelerating effective printing speed to 120 A4 impressions per minute. Stock can be fed from a modified paper tray or roll system. A Multigraf stacker collects the output. The system also supports an Automated Web-to-Finish solution which leverages the Xerox® FreeFlow® Digital Workflow Collection to eliminate manual job setup and operator intervention during production.

To assist book printers to become more educated about new processes and opportunities, Xerox provides significant business development support through its ProfitAccelerator® program, with a module specifically directed to helping print service providers build and grow a digital book printing business. The ProfitAccelerator Digital Books Development Kit has been created to ensure that you can take full advantage of this enormous opportunity. The kit provides the tools and information needed to get up to speed quickly on this promising and vibrant market.

It includes two attractive, informative and innovatively designed books. One provides you with a concise overview of the book market, its digital opportunities and how to sell to book customers; that book will supplement this white paper.

Its companion is an invaluable resource you and your operators will rely on again and again for basic information in addition to helpful hints and tips about designing, printing and finishing digital books.

Source files are included so you can print both books yourself—it’s a great way to demonstrate your book printing capabilities

as well as to share this important information. You’ll also receive a versatile scripted PowerPoint® presentation that you can use to tell and sell the digital book story to your customers, prospects and sales force.

Finally, our team of professional consultants is available to help you in the development of more complex production processes, sales approaches, special applications and more.

For more information about entering the book printing market or making your book printing operations more successful, visit www.xerox.com/bookprinting, or contact your local Xerox sales representative. Xerox, the expert in digital book printing, stands ready to assist you with a profitable book printing future.

©2011 Xerox Corporation. All Rights Reserved. XEROX®, XEROX and Design®, DocuSP®, DocuTech®, Espresso Book Machine®, FreeFlow®, iGen3®, iGen4®, ProfitAccelerator®, Xerox Nuvera® and 4112® are trademarks of Xerox Corporation in the United States and/or other countries. 08/11 T367

702P00370


In addition to its wide range of cut sheet and continuous feed monochrome and color systems, Xerox has partnered with a range of best-in-class companies to provide integrated in-line and near-line finishing systems specific to book production. Xerox also offers a range of software solutions under the Xerox® FreeFlow® Digital Workflow Collection directly relevant to efficient book printing, including an integrated order-through-invoice workflow, copyright management and more.

Documents

Taking Advantage of Market Disruption in Book Publishing (PDF, 1.8 MB)