In its first year, 1970, the Ingram Book Co. had sales of $1 million and employed 18 people, but by 2020, its successor, the Ingram Content Group, had revenue topping $2 billion. That is just one nugget that publishing insiders (and other readers) will find in The Family Business: How Ingram Transformed the World of Books, set to be released April 20 by West Margin Press, an Ingram subsidiary.
Written by journalist (and onetime Ingram spokesman) Keel Hunt, The Family Business chronicles Ingram Content Group’s 50-year evolution from the Ingram Book Co.—formed to house the Tennessee Book Co., which Bronson Ingram bought in 1964 for $245,000—to the country’s largest book wholesaler, largest print-on-demand company, and largest independent book distributor.
As a 50-year chart of its revenue shows, ICG did not have steady annual growth. Indeed, the company has had its ups and downs, reflecting trends in the entire trade book business. Ingram enjoyed sustained growth from about 1990–2000, fueled in part by the expansion of bookstore chains. Growth temporarily peaked in 2000 at about $1.5 billion, dipping because of changes in the retail market, then started to rebound in 2005. The company rode the financial roller-coaster through 2015, through the digital evolution of the book business. However, ICG has had very strong gains since 2016, as the various initiatives begun by John Ingram took hold.
Hunt divides up the financial performance of ICG into two broad periods—1970 through 1995, and 1996 through 2020—to show how new services have driven the company’s expansion. In 2005, new businesses accounted for 13% of total revenue and legacy businesses accounted for 87%. In 2020, new businesses accounted for 64% of revenue and legacy businesses 36%.
Two of the most important additions to ICG were Lightning Source and Ingram Publisher Services. Lightning Source began life in 1997 as Lightning Print under the direction of Y.S. Chi and Larry Brewster with the goal of printing as few as one copy at a time in contrast to the runs of tens of thousands of copies done by offset presses. Lightning Print produced its first book in January 1998 and at the end of that year had only 1,500 titles in its library. With the support of John Ingram, the company perserved, but Lightning Source didn’t turn its first annual profit until 2004.
By 2020, Lightning Source had more than 18 million titles in its inventory and had developed the Guaranteed Availability Program (GAP), which helps publishers when they have trouble meeting demand because of problems with offset printing. According to The Family Business, that was the case in 2020, due to pandemic-induced supply chain disruptions. Demand for the GAP service “shot through the roof” last spring, Hunt writes, and GAP produced 400,000 books in June. In the week of June 26, five of the top 10 titles on the New York Times’ nonfiction bestseller list “were supplied primarily by GAP,” he noted.
Ingram Publisher Services shipped the first books from its first customer, Applewood Books, in March 2005, but Ingram’s first attempt to enter the distribution business was in the late 1980s with Publisher Resources Inc. PRI was kept separate from Ingram’s core operations, and the combination of that separation and the perception that it wasn’t offering enough value to publishers led to the steady dismantling of the division, which was closed in 2003. The lessons learned from PRI, however, helped Phil Ollila create IPS.
That distribution operation took a major leap forward in spring 2016 when ICG bought the Perseus distribution business, which had annual sales of about $300 million. Hunt quotes John Ingram as saying that with the purchase, “the center of gravity for the Ingram Content Group shifted from wholesale to publisher services.”
Another new business that has helped ICG expand in recent years is IngramSpark, the company’s self-publishing operation. Launched in 2013, a key attribute of IngramSpark is its easy access to Lightning Source, which allows indie authors to quickly print as many, or as few, copies of their books as they want. Originally overseen by Robin Cutler, IngramSpark had more than $100 million in sales in 2020, had published more than seven million books, and was adding 4,000 new books each day.
An attempt at online bookselling
Although expansion into a range of digital services, including the 2005 creation of the digital asset management system CoreSource, helped to increase ICG revenues, not all innovations succeeded. One such effort was Ingram Internet Support Services (I2S2). Begun in 1996, it was an attempt to start an online bookselling platform that could be used by independent bookstores, and Ingram would benefit by handling shipping to customers directly from its warehouses. Faced with intense discounting pressure on books from Amazon, however, Ingram gave up the idea in less than a year.
John Ingram said the company’s experience with I2S2 gave ICG the knowledge it needed to create a viable third-party distribution system and helped the company build a fulfillment business that now, according to Hunt, represents “a sizeable fraction of Ingram’s business.”
The blockbuster deal that wasn’t
In addition to providing a look at ICG’s different businesses, The Family Business sheds light on some of publishing’s most pivotal moments, including the failed acquisition of the Ingram Book Group by Barnes & Noble in 1998 and 1999. According to the book, the idea for the purchase came from B&N owner Len Riggio during a brainstorming session among B&N executives and Ingram brass. John Ingram was intrigued by the proposal because it came at a time when consolidation among both its retail customers and publisher partners was putting pressure on the company’s traditional wholesale business. In addition, John Ingram was concerned that B&N and Borders would expand their own supply networks and was increasingly worried about the rapid growth of online bookselling.
Riggio made an initial offer of $450 million, but before accepting, Ingram talked to three other potential buyers: Borders, Amazon, and Bertelsmann, which at the time was in the process of buying Random House. The overtures pushed the B&N offer up to $600 million. Then strenuous opposition from many parts of the book business, especially independent booksellers, led the FTC to oppose the deal, and the plan was dropped.
Hunt writes that John Ingram suspected that part of Riggio’s intent in making the proposal was to keep Ingram Book Company out of Amazon’s hands and deprive the upstart of an efficient distribution operation. But as the regulatory process dragged on, “it became clear that Amazon was going to build more of their own warehouses, rather than buy Ingram,” John Ingram told Hunt. “I think B&N became less interested.”
The collapse of the deal was a “heavy blow to John,” Hunt writes, but it made him more determined to find ways to expand the company and to create a new version of the Ingram Content Group.