In the printing and book manufacturing world, consolidation continued over the past year. Two of the more significant deals were Bang’s acquisition of the Sheridan Group and Follett’s of Bookmasters, in combination with its purchase of Baker & Taylor. Many of the representatives of midsize players who were interviewed for this piece declined to dismiss the idea of acquiring or being acquired. Acquisitions aside, smaller players are focusing on improving their existing businesses by offering better customer service, instituting stronger management, and investing in improved technology and production, including the rapidly improving inkjet process, the results of which some printers say are now barely distinguishable from traditional offset.

Competition in pricing and speed of delivery continues to be fierce across the board, printers agree, making it a customer’s market. One printer notes that the market is saturated, giving an edge to customers, who can shop around for the fastest turnaround at the best price. Still, most printers are optimistic about the future of print and the printing business despite its changing landscape. With unit sales of print trade titles rising, the consensus was that the printed word continues to be alive and well even as methods of getting it to the reader are changing rapidly.

A few printers who are heavily committed to offset noted a flattening of sales, and those offering both printing options report an increase in digital and a falling off in traditional offset. Some smaller shops continue to focus on the independent publishers’ market—working closely with individual authors and the publishers that serve them. For them, the segment is growing at a smart clip, which inspired at least two printers interviewed to hire editorial staff to broaden their range of services.

For others, the declining college market is, naturally, a concern for those who serve it. As it has in other parts of the book industry, the changing political landscape has caught the attention of printers. A printer with business interests in the U.K. blamed Brexit for boosting the dollar, which makes doing overseas business costly; one strictly stateside player favored tariffs as a way of “leveling the playing field” and bringing jobs back to the U.S.

The Printers

Bookmasters, recently acquired by Follett along with its partner Baker & Taylor, will broaden Follett’s distribution footprint and add a new dimension to its education business. Bookmasters general manager Ken Fultz notes that, “to remain competitive, we focus on three things: one, we try to sell the multiservice one-stop shop; two, we continue to work on our transaction and manufacturing costs so we can be competitive when it comes to pricing; and three, we also work to maintain top-notch service and turnaround times.”

The recent addition of a Ricoh Inkjet printer extended the company’s digital reach because of its high speed and color and quality. “Some of our competitors adopted color inkjet [printers] a few years ago,” Fultz says. “We waited for the quality of the technology to get to a level that would be usable for at least 70% of our customer base.”

Edwards Brothers doubled its digital business with the acquisition of Malloy five years ago. CEO of Edwards Brothers Malloy John Edwards concedes, however, that this year the digital segment has been somewhat flat. Among the challenges he cites is the college market, which is a significant part of Edwards’s digital operation. “We had a tough year [in 2016], and looking at 2017 I don’t think anyone knows what will happen. We won’t know until August, when it will be too late.”

Edwards’s international business has a small footprint in the U.K., through a partnership with CPI. Brexit, which is credited with the pound’s weakness relative to the U.S. dollar, led to price increases. Edwards notes that this was the first time in 10 years that major currency fluctuations affected his business. Still, the company continues to “fight the good fight,” he says, by spending a lot of time working with publishers to help them reach a better understanding of the total cost of manufacturing.

“We stick with what we know,” Edwards says. “There are books out there that we could do but we don’t. It’s all about the fit. We have customer relationships that are 60 years old. I think that the printer that survives is the one that can bring value by helping customers solve problems they don’t know they have, such as basic inventory management. That’s where we bring value; the printing part is the easy part.”

Jeremy Hess, sales and marketing director of Gasch Printing, runs an exclusively digital operation focusing on shorter runs and print on demand. Gasch works daily with independent authors and those who serve them. “That’s a growing market for sure, and it’s been good to us,” Hess says. “I don’t see that slowing down anytime soon, because of the popularity of publishing your own book.” Gasch takes the approach of treating every customer the same way, whether it be a national publishing company or an independent author, Hess adds. “It’s all the same—attention to detail, personal attention. That personal attention really guides them through the process.”

Although some smaller companies are offering soup-to-nuts services to independent authors and publishers, Gasch has chosen not to get involved on the editing side. “We try to stay away from the content creation kind of thing, but on the layout side—laying out text or cover design—that sort of thing we can absolutely do,” Hess says.

Last year Gasch made a major investment in its binding business, in both perfect and case binding, which he says is paying off. The company’s philosophy also involves keeping everything under one roof, which affords more control over quality, turnaround time, and price. Gasch installed an inkjet printer in July of last year, and Hess says it has positively impacted his business: “We can compete on a higher level than we could before. It dramatically increased our capacity. We do one-offs every day and we also do over 1,000 [copies] just about every day, so it really does vary a lot.” He says he is content with being a niche provider. “We are proud of it and we don’t need to be an end-all, be-all printer.”

Nick and Kathleen Lewis, founders of Naperville, Ill.–based Publishers Graphics, just celebrated 20 years as digital-only printers. They recently installed their first Ricoh color inkjet printer, and Nick reports positive changes in quality for Pub Graphics’ color customers and an increasing number of orders from customers at home and around the world. “It’s quite amazing for the industry right now,” he says. “We haven’t done any offset. All my competition is growing old; I’m the baby in the bunch.”

Still, Lewis is not resting on his youthful laurels and pioneering spirit. “We like to pride ourselves on being hungry, and we’ve got to stay that way, because there’s always somebody else who’s going to be hungrier,” he says.

Apart from pricing, Lewis notes that environmental issues seem to be a concern for traditional printers. “The days of having the big web [presses] and that sort of thing are over,” he says, adding that publishers are looking to cut down on returns and expect a quick turnaround time.

Lewis says Pub Graphics is positioning itself to expand in the coming years. “From an accounting standpoint we’d like to purchase,” Lewis says. “I know everybody would like to be purchased, but I’m too young to give up the farm yet.” A purchase would have to be something that would fit into Pub Graphics future seamlessly, he adds.

Last year Thomson Shore president and CEO Kevin Spall predicted his distribution and fulfillment business segment would grow to include 200 small publishers and authors by the end of 2016. He underestimated. It’s “blowing up an underserved market” at close to 300, growing by at least one new client a week, he says. To meet the needs of authors and small indie presses, Thomson sticks with small offset runs, producing professional-quality books. He credits the company’s MTR (manuscript to reader) service with increasing authors’ take-home net by 5%–10%. With MTR, authors pay a standard distribution commission fee and then choose which services—design, editorial, print, and manufacturing—they’d like to add on. For those using the MTR option, a check is paid to the author at the end of the month.

Recently the company hired editor Tamara Tuller from Chronicle Books to consult with authors on production and editorial value. Says Spall: “A book that we produce for an author is like one we would produce for Random House. We use the same equipment, the same material to make sure that the design looks professional, and that’s important in terms of a book’s sales and authors getting into bookstores.” Spending time with authors to make sure they understand their readers is a necessity in the independent market, and often an educational process, he adds.

Thomson’s international business has grown by at least 25% during the last year, Spall says. Much of this growth is coming through Thomson’s U.K. alliance with partner T.J. International, forged last year. Spall is also seeing interest from publishers in Spanish-speaking countries. “There is a new interest from international publishers looking to print and distribute in the U.S.,” he notes. Spall says that some of these publishers may not know how to get started in America and may need more support than the larger players are able to give. “We are spending time trying to hand-hold authors and publishers and tell them how print works in the States. They all want to get to the U.S. reader.”

Unlike many others in the printing arena, Thomson has not yet invested in inkjet. “The quality is not quite there for us yet,” Spall says. In general, he says, he’s optimistic about the future. “I think we have a platform that our competitors frankly don’t have.” He adds that he’s bullish about the health and strength of the business in the forthcoming years. “It’s a fun industry to work in when you have what customer wants. We’re chugging along and it’s going well, but of course there will always be a new challenge.”

Century-old Webcrafters’ strength traditionally has been in the educational market, catering to both K–12 and higher education publishing, and it is feeling the pinch of tough competition and changes involving the college market. Brad Koch, v-p of sales and marketing, notes that students do not readily spend money on textbooks: “Revenue for new college textbooks has got to be the place publishers get hardest hit.” Students buy used, rent, or download PDF versions of assigned books. On the el-hi side, Koch sees trends toward a hybrid model, where some of the content is print and some electronically bundled together as a subscription.

Competition is increasingly tough for midsize players. “I think the industry as a whole—the manufacturing and the print side—has too much capacity for the market’s demand,” Koch says. This leads to downtime at some shops. “If you can’t do the job just when they want it or at the price they want, there’ll be two or three others who can,” he notes, adding, however, that Webcrafters still has very loyal customer partners with long-term mutually satisfying relationships.

The company’s business is 70% education and 30% commercial, and while its goal is to continue to own the education market as much as possible, it is aware of its limits and is concentrating on diversifying on the commercial end into other markets, such as printed catalogues and beyond. “We have to be creative,” Koch says. “We are on the lookout for what else we can do in that area.” That might include more than just print, he notes. “We have coined the term bridge, and that means bridging between electronic and printed markets. Perhaps we can do more than just print that catalogue for a customer.”

East Peoria, Ill.-based Versa Press’s business focuses on a diverse set of markets, split largely between trade, religious, educational, and university presses. Over the years, the company has invested in new offset press as well as digital technologies. “Our company has always approached the book manufacturing business through an engineering lens, focusing on incorporating new equipment in the plant and maximizing the efficiencies of existing equipment to drive production costs down to be price competitive,” says president Steven Kennell.

Versa is expanding, with a new building addition going up in July, along with the purchase of an additional eight-color press to meet the demand for four-color printing. “More publishers are finding value in printing four-color domestically,” Kennell notes. Digital technologies and several new bindery equipment purchases are also planned as part of the expansion.

The country’s largest book printer got a new name last year when R.R. Donnelley spun off its book, directory, catalogue, magazine, and retail insert business, now called LSC Communications. The newly separate LSC had total sales in 2016 of $3.65 billion, with the book segment generating $1.09 billion, about 30% of total revenue. Sales in the book segment were bolstered by the 2015 acquisition of Courier and increased supply chain management and fulfillment volume, which led to a 18.6% increase from 2015.

David McCree, president of LSC’s book and directory division, does not rule out further acquisitions. “We are always out there looking to see what would make sense where we can serve our customers,” he says. Despite its size, McCree says, LSC does not differentiate between its large and small customers. Service is all-important to LSC’s book business, he notes, adding that the company focuses not only on manufacturing but on helping with inventory management and customers’ needs along the supply chain.

“Price, speed, service, and quality—all those capabilities are essential, and they never become less important,” McCree says. “If you can manage that for your customers you become a bigger asset to them.” Indeed, according to the company’s 10-K filing with the Securities & Exchange Commission, LSC expects growth in its supply chain management offerings to offset modest declines in book printing over the next five years. Like all of those interviewed, McCree sees a long life for print and the printing business, regardless of how the market changes.

Stephanie Oda is a consultant and researcher on the book business.