TC Transcontinental, Walsworth Publishing, Edwards Brothers Malloy, McNaughton & Gunn Forecast Book Manufacturing Market
Much like the rest of the printing industry, digital technology is transforming the book market, forcing publishers and printers to rethink their strategies and technology investments.
In a recent webinar titled “Print Trends for 2016: The Future of Books in the New Year” — presented by Printing Impressions and Book Business magazines — InfoTrends’ Group Director Barb Pellow said, “The digital era is changing the book publishing market on many fronts. Although publishers have historically looked to achieve low per-unit manufacturing costs by printing long runs, production inkjet printing is disrupting the traditional warehousing and distribution model as publishers can affordably print books on-demand.”
Short runs and fast turnarounds — a virtual mainstay for the commercial printing market — is making an ever-increasing impact in the book sector. According to John Edwards, president and CEO of Ann Arbor, Mich.-based Edwards Brothers Malloy, “The runs are getting shorter and customers are demanding faster turnarounds. We have to do our part and become more flexible. But it’s good for us and for the market.”
Shift to Inventory Reduction
These shorter runs have opened up opportunities for book manufacturers. “I am very optimistic about where the market is going in 2017,” says Jonnie Bryant, executive director of sales and marketing at McNaughton & Gunn in Saline, Mich. “There is positive momentum in the [book] publishing industry. Publishers have told us they do not want to inventory books so they will be printing lower print runs more times through the year.”
McNaughton & Gunn has responded to these demands in a number of ways, including offering its customers an eight-day schedule on perfect-bound work.
In the education market, more and more school textbook publishers are looking to maintain less or no inventory. These publishers are looking for partners to provide them a unique printing source, offering both offset capabilities for their longer runs, as well as digital printing to allow a fuller life for their titles.
Additionally, these school publishers are less willing — and find it less attractive — to print offshore since pricing has gone up significantly in the last few years due to salary increases in China, freight costs and slower turnaround times, according to Jacques Grégoire, divisional president of TC Transcontinental Printing in Montreal. “Where it once was 35–45% cheaper to print in China, today the gap has narrowed to 15–25%, which for a Canadian publisher having to pay in U.S. funds, this eliminates almost all of the advantage.”
With book manufacturers facing declining run lengths per book, high setup costs and compressed cycle times from order to delivery, the only way to survive is to become more automated and more efficient. Enter high-speed production inkjet printing.
According to InfoTrends’ research, print is still a major revenue source for the book publishing market, accounting for nearly 65% of all revenue. Furthermore, books represent one of the fastest growing print applications for migration to digital. By 2019, 22.7 billion book pages are expected to be printed digitally.
As inkjet print quality has now reached levels often indistinguishable from offset, publishers have generally become indifferent to specifying whether they want a book to be printed digitally or offset. Instead, it has become a return-on-investment decision rather than one based on print quality.
“We must engage our clients to discuss total cost of ownership and how our comprehensive book platform can drive savings,” said John Burgess, director of strategy and innovation at Walsworth Publishing in Marceline, Mo. “This will be a challenge because it is a paradigm shift in thinking from unit cost versus total cost.”
“Digital printing has evolved to a point that it can compete on almost all levels with offset printing,” contends Bryant. “Digital printing has probably had the greatest effect on our schedules. A digital print job can be completed in a matter of days, whereas an offset job — due to the larger volume — takes weeks. Digital printing has changed the mindset of publishers in that they now have an expectation of much shorter schedules on all of their books. The quality of digital printing has improved to a point that most publishers don’t have any reservations anymore.”
With today’s digital printing methods, publishers can meet distribution channel requirements more effectively with shorter, “just-in-time” runs. By printing books on an as-needed basis, publishers can store books in a digital format while also solving warehousing and distribution issues. This eliminates a long-standing challenge for book publishers: the ability to accurately forecast demand for books and minimize the costs of overruns.
Just-in-Time Model Builds Partnerships
Inventory management offers an opportunity for book manufacturers to become even closer partners to their book publishing customers. “Making sure that the publishers have the right amount of books on hand at all times is key to most publishers,” points out Grégoire. “This will most likely change the relationship between publishers and suppliers.”
Additionally, digital printing allows publishers to bring a title to market in a shorter time frame — and increase a publisher’s revenue steam. “The technology has given the possibility to produce very short runs, allowing [publishers] to introduce new programs and titles before committing to a full-fledged production. Many self-publishers have been able to get their titles on the market because of this technology,” he adds.
Digital printing has also opened up the four-color market that previously was unattainable to many publishers due to the high costs, says McNaughton & Gunn’s Bryant. “It enabled publishers to test market a title before making a large dollar investment. Publishers are now able to publish lesser known or first-time authors because the initial investment is much less and the publisher does not have to warehouse the books.”
For most book manufacturers, there is no choice but to invest in production inkjet printing equipment in order to continue to serve book publishers in all market sectors. Digital printing can enable short-run and print-on-demand solutions that can increase the availability of backlist and out-of-print titles, which were previously cost prohibitive on traditional platforms.
“In the past, backlist and out-of-print titles were too expensive to be kept alive due to the large number of books that had to be printed in order to have a marketable list price,” says Bryant. “Digital printing has enabled publishers to print a small number of books per title in order to have them available to their customers. This has certainly added to the revenue of many publishers.”
Additionally, digital printing has opened several new opportunities for book publishers, including versioning and personalization, self-publishing and direct to consumer, and distribute-and-print workflows. “From our research and discussions regarding the opening up of new markets, we believe digital printing suits itself well for supporting niche topics/communities that desire to go direct-to-consumer or leverage a hybrid approach with traditional publishers,” Burgess notes.
Offset and digital production printing will coexist in the book sector for the foreseeable future, but few book manufacturers will be able to justify reinvestment in offset printing technology. Most will not have a choice but to invest in digital production printing systems to survive and grow share — if they haven’t already done so.
“Walsworth has enjoyed steady growth during a time when the book industry has receded,” adds Burgess. “This is because of our ability to provide both print and digital services that help our customers grow their revenue while improving their engagement.”
Customers are always looking for ways to set their books apart. While versioning and personalization might be one way to achieve this differentiation, finishing options offer another avenue. According to Bryant, one “old” finishing option has become popular again: the deckled edge. Additionally, McNaughton & Gunn also offers special treatments on their covers to provide more differentiation in this crowded market.
As the retail distribution landscape continues to change, book printers will further be forced to adopt more automated and flexible book printing and manufacturing systems. “We need to understand our customers’ and help them run their businesses better,” points out Edwards. “We need to develop strong relationships and make it easy for them to work with us.”
Denise Gustavson is the Editorial Director and Special Projects Editor for the Printing & Packaging Group, which includes Printing Impressions, packagePRINTING, In-plant Graphics and Wide-Format Impressions magazines, among other brands. She is also the Editor-in-Chief of Wide-Format Impressions.