Print On Demand (Toc 2010) Final

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Slides used to guide a 90-minute workshop on digital printing offered at O'Reilly Media's 2010 Tools of Change conference. Co-presented by Ashley Gordon and Brian O'Leary

Slides used to guide a 90-minute workshop on digital printing offered at O'Reilly Media's 2010 Tools of Change conference. Co-presented by Ashley Gordon and Brian O'Leary

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  • 1. Making the case for digital printing
    Tools of Change in Publishing
    Ashley Gordon and Brian O’Leary
    February 22, 2010
  • 2. Digital printing: a summary
    Three overlapping segments
    Can make financial sense when you look at all of the costs involved with creating and managing inventory
    Potentially significant opportunity to use digital printing to maintain or grow the availability of niche content
    The benefits available from digital printing depend on the size, page count and annual demand for any given title
    Models (tailored to address the nature of specific imprints and titles) can help identify the best uses
  • 3. Digital printing
    Print on demand
    Short-run printing
    Ultra-short-run printing
    One-off printing
    Self-publishing
    Author services
    Wholesaler/distributor
    Distribution/fulfillment
    Metadata
    Chunking/bundling/repurposing
    Alphabet City: PDF, XML, DAD/DAM, ONIX
    Content
    The vocabulary of digital printing …
  • 4. It’s useful to first confirm the overlapping models
  • 5. A range of digital printing suppliers
    Lightning Source (Ingram)
    CreateSpace (Amazon)
    Textstream (B&T)
    Bookmobile
    Colorcentric
    Edwards Brothers
    ePac
    Quebecor-World
    R.R. Donnelley
    Friesens
    Sheridan
    Transcontinental
    The firms shown are representative; list is not exhaustive
  • 6. Among digital printing vendors, there is overlap…
    Lightning Source
    Transcontinental
    Various
    Quebecor-World
    (Eusey Press)
    Vendor examples are representative only (not a complete or preferred list; vendors can and do cross segments)
  • 7. All part of an evolving value chain …
    Lightning Source (Ingram)
    CreateSpace (Amazon)
    Textstream (B&T)
    Bookmobile
    Colorcentric
    Edwards Brothers
    ePac
    Quebecor-World
    R.R. Donnelley
    Friesens
    Sheridan
    Transcontinental
    Amazon
    LibreDigital
    NetGalley
    SharedBook
    Value Chain International
    ReadHowYouWant
    Ingram
    Baker & Taylor
  • 8. Digital printing set-up requirements
    All look for PDFs; most will (try to) process properly structured documents in XML or native-application formats (InDesign, Quark, sometimes Word)
    All offer direct or third-party conversion (scanning) of material not available digitally
    Digital conversions cost less and take less time than scanning
    Conversion costs occur once; if you work with a digital asset distributor, they may provide it as part of their service (i.e., don’t pay twice!)
    Separate, lower set-up costs for cover and text/body copy are typical
  • 9. Typical limitations of digital printing services
    Paper choices
    Trim sizes
    Maximum page counts
    Foil stamping or embossing
    Rough cut edges
    Sewn bindings
    Case-bound color
    Spot colors
    Some vendors offer some of these services; no vendor offers all of them. Before committing to digital printing, evaluate requirements against current and expected market capabilities.
  • 10. How do you typically work with these vendors?
    Most maintain relationships with traditional royalty publishers
    Most offer conversion services
    Some offer warehousing and/or fulfillment services
    Options can include: “no” inventory (print only when ordered); limited inventory (order 1, print “n”); and minimum inventory (fill-in)
  • 11. Author-services firms come in many shapes
    Author House (Indiana)*
    iUniverse (Nebraska)*
    Trafford (British Columbia)*
    xLibris (Pennsylvania)*
    Lulu (North Carolina)
    CreateSpace (Amazon.com)
    Bookends (New Jersey)
    Blurb (California)
    Picaboo (California)
    Picturia Press (California)
    *While these firms are now part of Author Solutions, they operate independently and offer different types of services
    The firms shown are representative; list is not exhaustive
  • 12. How do author services firms typically work?
    Compete for authors as customers; may make some money selling books
    Authors invest in editing and digital printing services (basic services generally under US$1,000)
    Clear agreements on what each service provides (and does not provide)
    Services can obtain ISBNs and arrange for listings
    Typically, the services do not promote (unless you buy that)
    Usually do not handle fulfillment
  • 13. On-site services (POD “kiosks”) are more limited
    Instabook (Bookends)
    On Demand Books (Espresso Book Machine)
    Limited but growing market penetration at this point
    Promising uses: local demand for OOP titles; customized content (special editions, course packs, etc.); high-traffic sites with limited inventory (e.g. airports)
  • 14. So how is digital printing used by publishers?
    Backlist (but not just long tail)
    Just-in-Time Inventory
    New Imprints
    Distributed Print
    Overseas Expansion
    Bridging/Crashing
    New Formats
    Large Print
    Personalized Content
    Custom Content
  • 15. Just-in-time inventory saves on the rent
    Free Books: Bloomsbury Publishing Launches “Radical” New Academic Imprint
    Library Journal, 9/23/2008
    The Perseus Books Group Announces New Digital Printing Partnership with Edwards Brothers
    Edwards Brothers press release, 1/28/2008
    Northshire Bookstore Prepares to Launch Print-on-Demand Publishing Service
    Bookselling This Week, 2/20/2008
    Lightning Source UK and publisher Thomas Nelson Inc. announce best-seller title program
    Lightning Source press release, 2/26/2007
  • 16. Crashing & bridging: printing “miracles”
    Chelsea Green Makes Obama Book Available Early Exclusively on Amazon
    Publishers Weekly, 8/15/2008
    Gov. Sarah Palin biography brought to market by Epicenter Press and Ingram content companies
    Lightning Source press release, 9/2/2008
    University of Nebraska Press selects Lightning Source to bring Nobel Laureate titles to market
    Lightning Source press release, 10/15/2008
  • 17. Digital printing can lower the unit cost of books sold
  • 18. Digital manufacturing costs are typically higher
    Unit costs per POD book printed are higher than seen with conventional technologies (studied books between 80 and 320 pages)
    Unit costs per POD book sold can be lower, depending on sell-through for a title
    POD can be set up to produce a single copy of one or more consistently formatted titles
    When POD is dismissed by publishers, it is typically based on manufacturing costs alone.
  • 19. POD can help reduce or eliminate returns/unsold copies
    POD technology allows publishers to choose their inventory objectives
    Supports zero inventory (order, then print) as well as structured maintenance of low volumes of ordered titles
    Titles printed POD can be sold as non-returnable
    Titles printed POD can also be fulfilled directly, through contracted services
    Our research shows that the share of unsold copies is often much higher on small press runs (smaller base, greater uncertainty).
  • 20. POD can also reduce inventory spoilage/shrinkage
    Shrinkage (loss or theft) and spoilage (from handling) can consume as much as 10% of a print run
    Little or no inventory also means significantly reduced spoilage/shrinkage
    Coupled with fewer returns or unsold copies, lower spoilage also improves POD’s cost per book sold
    While spoilage and shrinkage vary significantly across titles, the longer a book is held, the greater the loss becomes…
  • 21. Reducing inventory cuts carrying costs
    Warehouse costs can range from $0.12 to $1.80 per copy, per year
    Costs of capital (paying for printing well ahead of when the books are sold)
    For slow-moving titles (demand below 50 per year), carrying costs can exceed manufacturing expense
    Because warehouse and financial expenses are usually not part of a departmental or title budget, the costs are often not factored into POD analyses.
  • 22. However, this analysis compares just “books in print”
    There is another, important consideration unique to POD…
  • 23. POD also helps keep niche content in print
    Higher manufacturing costs for POD
    Lower expenses for returns/unsold, spoilage and carrying costs
    “Order, then print” model supports more timely inventory decisions
    OOP/OSI is no longer a forced (economic) decision
    Editorial value can be protected without incurring significant upfront costs
    Lowers risk (“Why not stay in print?”)
    Prices based on POD expense and full understanding of costs
    Predictable expenses
    Search and filter helps drive demand
  • 24. OUP: an example of backlist life
    OUP made 15,564 digital titles available through Google Book Search
    Nearly 144 million book pages viewed
    Over 700 thousand readers clicked a “buy the book” link
    An average of 47 “buy the book” clicks per title
    Expensive books (average price: $40)
    Click-to-Buy Conversion Rates
  • 25. Where POD may help meet long-tail demand
    Potentially cost-effective use of POD for online orders (titles still in print but slower-moving)
    Use POD to keep titles in print, growing revenues
    Demand (sales)
    Title count ranked by demand
    Maximum offline-retail title count
    OOP or OSI invoked
  • 26. Digital printing also supports new formats and uses
    Large Print Up Close: Diverse content—edgier, younger—plus POD possibilities give new life to a venerable offshoot
    Publishers Weekly, 5/19/2008
    “Releasing our large-print titles directly into paperback allows us to be more competitive in pricing… It'll also slide easily into a print-on-demand format at the end of the retail life cycle.”—Anthony Goff, Hachette
    Penguin Launches Penguin 2.0, iPhone App
    Publishers Weekly, 12/8/2008
    SharedBook Introduces Smart Button™ Technology Through Partnerships with Encyclopaedia Britannica, Legacy.com, and SOHO Publishing
    Press Release, 2/9/2009
  • 27. So what are the typical economics for POD?
    Costs and services vary by POD vendor, so we created a uniform model to track various options
    This model consists of: a series of vendor tabs (expandable); a summary of all vendor results; and a cost-benefit tab for a book of a given page count and trim size
    Pricing changes over time, but this model provides a good look at the demand scenarios in which POD makes sense
    After a short break, we’ll show how these demand scenarios work
    Switch from presentation to the workbook model …
  • 28. We’ll add one significant analytical footnote …
    The model assumes that every book printed and not spoiled is sold
    There’s no reduction in the model for copies not sold
    A smaller conventional press run can look like a good financial option if demand is predictable
    Where demand is uncertain (or certain to be less than your minimum conventional print quantity), POD can become a better option
  • 29. So what to make of all of this data?
  • 30. Discoverability and access in a POD world
    Lower-demand titles are less likely to make it to bookshelves
    Successful digital printing strategies use online to promote titles
    Google Book Search, Amazon SITB, BN Search are all valid options
    Consider digital printing vendors that can seamlessly fulfill
    Try to balance the market power of Amazon and CreateSpace
    Use social media to leverage content discoverability, syndication
    Direct sales probably not as successful in the near term
    Channel conflict
    Challenges managing fulfillment
    There are exceptions (Ellora’s Cave, Samhain Publishing)
    Individual authors without a platform may be best served by author services
  • 31. Getting started in digital printing
    Determine your objectives: what do you want POD to accomplish?
    Title set up: fees, process, file types, book specs
    Workflow: design with POD in mind, anticipate when to turn it on
    Identify vendors and partners: capacity, production specs, relationships
    Know your numbers:
    true unit cost
    inventory needs
    turn-times (title set up, printing, shipping)
  • 32. Digital printing: a summary
    Three overlapping segments
    Can make financial sense when you look at all of the costs involved with creating and managing inventory
    Potentially significant opportunity to use POD to maintain or grow the availability of niche content
    The benefits available from POD depend on the size, page count and annual demand for any given title
    Models (tailored to address the nature of specific imprints and titles) can help identify the best uses
  • 33. Suggested digital printing resources
    Book Industry Study Group (a primer now available)
    Leading vendors
    Your current vendor (depending on the relationship)
    Leading-edge experimenters
    brian.oleary@magellanmediapartners.com
    ashley@mockingbirdpublishing.com