No segment of the publishing industry supply chain has been happier to see some stability return to the sale of printed books than book manufacturers. Interviews with a range of printers and manufacturers found that though print runs continue to go down, the pace of decline in recent months has been slower than it has been since e-books became a significant part of the industry five years ago. While there is no denying that e-books are a permanent part of the publishing industry, one manufacturer reported “bullish feelings” at the London Book Fair among publishers on the future of the printed book.
Another positive sign for printers has been the return of some printing to the U.S. from overseas. A combination of rising offshore costs, logistic hurdles that delay shipping times, and political unrest in various parts of the world has caused publishers to reconsider printing stateside.
With lower sales of print books, manufacturers report that publishers have become more willing to take advantages of short print runs. Publishers understand that while unit costs may be higher, producing only what they need cuts warehousing costs and lowers the risk of larger print runs not selling through. Bolstered by the latest IT systems and printing technology, book manufacturers continue to invest in ways to improve and broaden their services by offering warehousing, distribution, and even editorial and other publishing services. Digital printing is now fully incorporated among printers, especially for small-to-midsize players.
Though almost all printers still offer offset printing, manufacturers have invested heavily in new methods to quickly produce high-quality print product, mostly through the use of new ink-jet presses. Some printing professionals assert that the quality of ink-jet printing has improved to such an extent that it is barely distinguishable from offset. Those who have invested in these machines have high expectations, estimating it increases production capacity by as much as 50% by speeding up runs. Improvement in ink-jet printing is aided by paper manufacturers, whose products continue to evolve to offer more paper options suitable for ink-jet printing.
Another avenue that some printers have pursued to grow revenue is to offer services to self-publishers. Although still a small sliver of the business, self-publishing is among the fastest-growing segments for some companies. Printers now offer are distribution, storage, and editorial services.
Webcrafters, a longtime supplier to the education market, has recently purchased two Prosper 5000 ink-jet presses. Brad Koch, v-p of sales and marketing, says he expects this investment to double Webcrafters’ printing capacity. He notes that the quality of ink-jet printing has come a long way over the past few years, to the point that it is “offset substitutable” for certain publications, especially educational. “It doesn’t look exactly like offset, but it is darn close,” Koch notes. In the educational sector, Koch reports he is seeing some of his clients offering blended content—print and digital versions bundled together in adaptive-learning packages. Digital printing has also made it more cost effective to do small print runs for educational publishers’ sales reps. “Publishers can quickly print just what they need for the reps to presell,” Koch says. He pointed out that using digital printing rather than offset to produce presale editions not only cuts out waste, but because of the fast turnaround, it gives publishers more time to make corrections.
Edwards Brothers Molloy doubled its digital footprint with the acquisition of Molloy Incorporated in 2012. In 2014, the company consolidated the two Ann Arbor plants. With 900 employees and revenues of $115 million, the company is poised to offer services along the entire supply chain line, including printing, warehousing, binding, and distribution. Although still primarily an offset printer, which accounts for 70% of its sales, the combined company has 10 digital print locations in North America and the U.K. since the acquisition of Molloy. Edwards uses ink-jet presses widely, especially for its educational materials, with impressive results, president and CEO John Edwards notes. “You have to understand what is going to work—take into consideration types of paper you are using, etc.” For longer runs, Edwards has a fleet of Timsons web presses in the U.S. and numerous sheet-fed presses.
With the Malloy merger, Edwards gained a distribution business serving a number of smaller publishers. The company also has set its sights on independent publishing. Print-on-demand is still growing, as is micro inventory. “In many cases the same title is doing both: being used for POD, and as sales grow, it is migrating to micro inventory, which features an ultrashort run. Then, as sales slow, it moves back to POD, and vice versa.”
“I would say shorter print runs continue to be an issue, but not a bad issue for a printer like us,” says Jeremy Hess, sales and marketing director of Baltimore-based Gasch Printing, which specializes in print-on-demand. Gasch just invested $2 million in upgrades, including buying a new binding machine, which he expects will double the previous capacity. The company has also invested in an ink-jet press, to be installed within the next two months. Gasch concentrates on short runs and also focuses on self-publishing, which Hess sees as a fast-growing business. The pressures on this relatively small player do not differ from its larger competitors. “You have to move fast,” he says. “There is a lot of competition in pricing and turnaround times.” Gasch strives to keep much of its business under one roof. In addition to printing and binding services, the company partnered with Bright Key, a mailing and fulfillment operation located in the same building, which offers a variety of services, including warehousing, a call center, mailing, and fulfillment. “It’s a convenient cost-effective, one-stop store under one roof,” Hess asserts. “We try to bring our customers the best solution possible. We’ve taken a relatively small piece of the pie, and we do what we do well.”
Quad/Graphics, hit by accelerating increased pricing and volume pressures, toward the latter half of 2015, subsequently embarked on efforts to reduce costs by $100 million, which included closing and consolidating some of its operations. In its fourth-quarter earnings release, the company said it focused its efforts to “aggressively manage costs and improving manufacturing productivity.” Quad said that going forward, it is continuing to invest in high-speed color digital web presses to offer a range of options for producing and delivering books on demand.
“Our digital press solution is helping redefine the entire book supply chain, giving publishers increased customization and versioning capabilities; faster time-to-market; reduced waste, inventories and obsolescence; and lower fixed costs,” Joel Quadracci, chairman, president, and CEO, says. Eric Steinbach, president of publishing solutions at Quad/Graphics, adds, “We see our book customers focusing on content first and are leveraging both print-on-demand and e-delivery solutions to reduce distribution time and processing costs.” With digital print technology continuing to evolve rapidly, allowing for greater production speeds at lower run costs, and advancements in content-management engines, publishers can pull content from multiple sources to “dynamically create unique products in this digital environment,” Steinbach says.
Publishers Graphics, a pioneer in digital printing based in Naperville, Ill., was founded in 1996 by husband and wife Nick and Kathleen Lewis. It turned to be a good time to start, despite, or perhaps because of, the seismic changes that had begun to occur in the book publishing world—consolidation, shifting content delivery, the rise of the Internet, and the decline of the printed book. Today Pub Graphics employs more than 100 people in three facilities throughout the Midwest, which receive some 300 to 700 orders a day from around the world. “Everything is continually going down,” Nick Lewis says. “First runs now are 300 and below, and many titles are going to print-on-demand.” One of the advantages Pub Graphics has is its automated service, which was built completely in-house. “We communicate electronically with a handshake between systems—the orders we receive are never touched by a human,” Lewis says. “It’s very much an automated process.”
Print-on-demand is a major part of the Pub Graphic’s business. As part of its POD offering, publishers can put their entire library of titles on a disk, which Pub Graphics adds to its PGDirect platform. The platform creates a listing from which anyone can buy a book and get it immediately, Lewis notes. As for ink-jet printing, he says he is looking into the possibility of installing a press later this year.
“Speed, speed, speed.” That is the mantra at Thomson-Shore, according to president and CEO Kevin Spall. In late 2015, Thomson implemented a state-of-the-art scheduling system. “Our on-time delivery has never been better,” Spall says. He adds that Thomson’s distribution and fulfillment segment is growing at close to 200%, netting at least two new accounts a week. Spall predicted that by the end of 2016, the company will be distributing for more than 200 small publishers and authors. “By far, this is the most exciting growth for us as we head into 2016,” he says. Another recent rollout by Thomson is an agreement with U.K. print partner TJ International, aimed at getting more visibility for U.K. publishers in the U.S. According to Spall, through the company’s US/UK Awareness Initiative, Thomson Shore selects titles that become part of a buyers catalogue that will be distributed to retailers, wholesalers, and independent booksellers. Spall says he signed up 20 U.K. publishers while attending the London Book Fair.
Like other players in the printing and manufacturing field, Thomson is tapping into the growing independent publishing sector, building particularly on its author-direct business. Through its MTR (Manuscript to Reader) service, Thomson-Shore will manage every aspect of the design, manufacturing, and distribution of a title, including providing access to major retailers as well as selling the book on Thomson-Shore’s bookselling site, seattlebookcompnay.com. The company publishes about 100 books a year. “Authors have always been a big part of our business since the 1970s, long before they started calling it self-publishing,” Spall notes.
Thomson continues to offer full lifecycle management for all titles, allowing the company to take each book from one-off digital printing to inventory management and long-run, low unit cost offset printing. “We move seamlessly with the same file across our whole print platform,” Spall says.
Stephanie Oda is a book industry consultant and researcher.