Is the future print-on-demand? Increasing revenue for publishers in the 21st century

Views on a seminar held at the London Book Fair, March 2002

Sulaiman Adebowale
Editor, Bellagio Publishing Network

Is the future of publishing an advanced photocopy machine? If indications of the growing interest and advances in digital printing are anything to go by, this might just be so. That today's pinnacle of centuries of printing technology now seems to rest on a photocopy-like machine that prints, binds and trims books to perfection in a short space of time is remarkable, if not slightly galling. Does it mean that the cry for huge investment in sophisticated offset printing technology in the developing world may now seem foolhardy? Sadly/happily, the answer may just be a resounding yes.

At a seminar organized by the British printer Antony Rowe and the photocopier Xerox at the London Book Fair in March 2002, printers and publishers from various parts of the globe explored recent advances in digital printing and key issues in print-on-demand technology, and what they mean for publishing in the 21st century. Though the absence of publishers from Africa at the sessions was striking (it was an open invitation), the issues discussed are not just fundamental to the survival of every small publisher, which includes the bulk of Africa and the developing world as a whole, but also a reflection of one of the directions publishing may be heading in the digital information era. What are the issues in print-on-demand technology? And why should publishers in the South dump the latest offset machine and run for docutech and other digital printers? The issues, though strongly focused on technology, however, actually rest forcefully - as in any technology with the potential for long-lasting impact - on the core of publishing itself. That is, on mundane realities such as how many print runs before break-even or profit?

What are the prospects for subsequent print runs? How can old lists be revived without forcing the company into insolvency? How can an order for fifty copies be fulfilled for an out-of-print edition? Which warehouse to stock books and how do we pay for it etc? These are questions that have long been at the core of publishing and, more importantly, are the same issues the concept of print-on-demand is aiding publishers to address differently.

Print runs, warehousing and going broke: The publishing value chain
There is a point in the publishing value chain that is akin to star gazing or looking through a crystal ball. The ability to determine the right print run for books has been the bane of any publishing project. Though extensive market research and machinery have proved to be invaluable, the print runs of the majority of books published today are either in excess of or, for a lucky few, below the demand for them. This factor means most publishers will calculate roughly the number of copies that can be sold to guarantee a return on investment made, which for the ideal publishing projects usually falls within six to twelve months of first printing. As every publisher is aware, there are obvious pitfalls in this scenario.

Firstly, the ability to break even within the first year requires a tremendous amount of marketing clout and work and, if unachieved, sales must be maintained beyond the first year to over a number of years. In other words, the bulk of books unsold are either sitting in a bookshop, for publishers that can afford the heavy discount clout, in warehouses haemorrhaging rent, or in house basements soaking up flood waters the world over.

Secondly, the number of unsold/yet to be sold/later to be donated or pulped (delete as appropriate to your level of optimism) stock at any given period means tied-up or lost investments for the publisher. This not only delays returns on investment for that particular project, but also hampers the birth of future titles or projects.

Thirdly and more importantly, the scenario has bred a culture that determines the very nature of what is published. Safe publishing projects where returns are quickly gained or not overly delayed attract most of the investment. The ability to sell quickly and immediately takes precedence over the book itself. Furthermore, the process determines the form and quality of the book. The gymnastics of calculating the most profitable or fastest saleable stock impact on the minutest details of book production (from cover design, to level of copyediting, to appropriate indexing required). More money on the production process means more copies of the book must be printed to break even, which inevitably translates to more vigorous and expensive marketing push, warehousing, more chances of bankruptcy etc.

The above scenarios are not necessarily bad, they have shaped the culture of publishing for over four centuries - weeding the weak from the circle; but even the most endowed publishers will acknowledge that these scenarios are restrictive. The concept of print-on-demand is an attempt to break that restriction, and the advent of short run digital printing seems to make it possible. The possibility of being able to print the closest number of copies that is demanded introduces an element of more than just flexibility to the publishing value chain.

In a presentation entitled 'Publishing in the 21st Century', Ad Verweij of Xerox Europe cites the PIRA 1 statistics that half of all ISBN numbered books in the world sell fewer than 250 copies each year. Given that the bulk of titles from publishers in the developing world fall into this category, this statistics should raise concern. Furthermore, despite the global mergers of publishing conglomerates in the last ten years, there is every indication that the bulk of publishers in the entire world are small publishers with titles that do not average more than 250 copies a year. Digital printing technology now makes it possible for those publishers to print just exactly what the market demands without putting much strain on cash flow, those dangerous two words that determine life and everything else in our times. Most printers would agree that traditional offset printing is most profitable for print runs of at least a thousand; anything less is best optimised with digital printing. Printing this thousand equals four years of tied-up investment, if the statistics above are to be believed. Opting for the choice of printing less is strengthened by digital printing.

The chance to publish books by unknown authors and on fringe subjects with very little market potential is exciting, but still limited to the frontiers of where publishing can reach with digital printing. Indigenous language publishing projects in the bulk of the south are hampered by the absence of strong market potential. Languages with a larger population of speakers understandably have a fairer chance of getting published, thereby facilitating the extinction of other languages. In Nigeria, for example, with an estimate of over 250 languages, three main ones (Hausa, Igbo and Yoruba) make up at least 80 per cent of 120 million Nigerians; that is, 247 other languages stand less chance of being published using the traditional publishing process with offset printing.

Crucial to the impact of digital printing and print-on-demand, is the element of a technology and process that can be integrated and combined with existing printing processes and publishing models; thus multiplying possibilities of flexibility in the publishing process. For example, if conventional offset printing is used for the first print run for the highest quality, which offset still achieves better than digital printers, subsequent print runs can be done digitally in line with demand, to ensure a modest safety net.

Short digital runs can provide real test-case scenarios for a book in a particular market before more expensive larger runs are pursued. It could be on a subject that requires business caution, or a need to carve a niche with a series of titles in a particular area; or gradually building up a credible presence by, for instance, publishing four short run books on a budget of one single longer run.

The advent of web-based print publishing solutions
Given the entrenched and undoubtedly tested tradition of reliability in offset printing, digital printing must proffer more than just the possibility of cost-effective short print-runs for it to be a really viable publishing model. The extra key element does exist and can be located in the internet environment. A catalogue of titles online linked to digital printers breaks loopholes in the efficient delivery of titles, and much more.

Hans Offringa, founder of Gopher, a Dutch publishing house, typifies a new crop of publishers using web sites to create new book publishing models by developing database software that directly links the process of book ordering and production in a centralized network. The system allows users (publishers and clients) to determine the form of content available, whether in the form of personalized fonts or additional elements and features; thus adding an element of customized variability to book production. 2

Variable content, a strong feature of online publishing, is now being used as a feature of traditional paper publishing. Think of updated editions of corporate documentation, travel guides, textbooks and learning materials and the ability to have constantly updated printed versions. It is currently being done and could go further. With the increase in people pursuing long-distance and part-time education, learning material located on servers, accessible via web sites and linked to digital printers, opens up another opportunity for education. Others such as Jason Epstein, Jeff Marsh and Michael Smolens of 3Billion books are thinking of going further, developing digital printing machines that print and bind at the point of sale, in schools, stalls, supermarkets, bookshops etc. In a machine idealistically named the PerfectBook, readers select titles from a catalogue in a database, through a computer network which sets in motion the printing, binding, and trimming of a book that pops out at the other end. It attempts to remove bottlenecks such as warehousing, delivery, postage, and time, which have all determined the cost and accessibility of books produced by conventional printing processes.

How come all publishers in the developing world are not jumping on the digital printing bandwagon, especially given that they have been around now in one form or the other for over a decade? As with most technologies, they have been going through various phases of development. Initially, colour and complex line art were out of the question. Even ordinary black printing used to be less cost-effective than offset printing; and the scanning of out-of-print material unavailable in electronic form compounds the cost. But in recent times things have changed. Recent advances in digital printing technology have been able to capitalize on faster developments in the transfer and retrieval of digital material, which have changed considerably in the last five years. Today's digital printers are becoming more cost-effective. The cost of scanning documents to digital files is gradually falling, the printing machines are getting sharper, and Portable Document Formats (PDFs) have become more popular to transfer files across platforms.

Secondly, this technology demands a reshaping of the publishing value chain, which from all indications is not too keen to change its ways. As Jason Epstein in 'Reading: The Digital Future' notes, print-on-demand technology may demand that 'publishers must reduce or liquidate redundant facilities related to previous technologies, especially in the areas of marketing, sales warehousing and production'.3 This assertion of course can't be taken at face value - marketing and sales would continue to be crucial to book selling - but elements such as publishers being forced to sell at huge percentage discounts to oil the distribution may, thankfully, have to be reviewed. The current power being exerted by book retailers is unhealthy for the publishing industry.4 With possibilities of additional expenses reduced, print-on-demand may have a positive effect on the pricing of books, especially for new titles. For backlists, however, cheaper books may not materialize if publishers do not invest in digitizing titles they currently do not have in digital formats, particularly final CRC versions.

Lastly, advances in digital storage and retrieval of information have continued to be seen as the fabled poisoned chalice. The number of wrangles and court cases on rights issues in recent times has suddenly spiced up the notoriously dour lives of publishers. Authors, publishers and readers are at war with one another and all and sundry at the same time, spurred on by computer software developers. The call for centralized portals with databases of millions of titles online to maximize the potential of print-on-demand will be fraught with obstacles generated by the ongoing muddle in the electronic copyright war. But wouldn't it be nice to stop star-gazing for a moment?

Note
1. PIRA International is a commercial consultancy business that specializes in studying the packaging, paper, printing and publishing industries. It conducts research regularly on the trends and issues shaping these industries. See www.piranet.com
2. Various business initiatives abound in the area of POD. Notable among these are Lightning Source and Booksurge.
3. Epstein, Jason, 2001, 'Reading: The Digital Future', The New York Review of Books. July 5, 2001. Available at http://www.nybooks.com/articles/14318
4. The return of unsold books policy has been exacerbated by current practice in which book retailers stringently control the shelf space occupied by a title to maximize returns. Some retailers are reported to return titles if unsold within a few weeks.  [end]  [BPN, no 30, 2002, p 3-5.]

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