Top 30 Book Manufacturers — The Plot Thickens

HEGWOOD: Rising paper costs have definitely had an effect on larger print companies that focus on long print runs. For companies like [us], which focus on print-on-demand (POD) and inventory reduction, paper is a smaller percentage of our operating cost, so rising paper costs have had less of an effect and, in fact, are fueling the move from long-run web applications to short-run POD applications.

BB: What kind of effect has the continued consolidation of printers--namely RR Donnelley's moves over the past several months--had on the market?

CLARKE: Demand is significantly different than it has been in the past, so consolidation is necessary. Out of the consolidation, we've seen great opportunity to grow our share with a variety of publishers and to do business with new publishers as alternatives are sought. So, for us, it has been a good thing. I think it is necessary for the market, and that there will be continued consolidation. There's more to come, and we'll see the same if not more aggressive consolidation on the publishing side, so hold on.

GREGOIRE: There is a lot of capacity in the market. I don't think the fact that Donnelley acquired [Perry Judd's, Banta and Von Hoffmann] will remove that much capacity from the market. Some of the large publishers will probably be wary of having too many of their eggs in one basket, so I believe there will be some movement, which is good for some of the printers. But, no, I don't think the publishers will suffer [from consolidation] too much, because there was already quite a bit of capacity available out there.

MCFARLAND: The consolidation of printers will help relieve some of the excess capacity that exists in the market. This should help price stability, which will strengthen the financial position of the remaining printers and allow them to continue to invest in the technology needed to service their clients.