Brave E World?: Dosing Up on O-D
Paul Hilts -- 12/20/99
As publishers and booksellers search for the optimal digital strategy, they turn to the hybrid technology of on-demand

As publishers and booksellers search for the optimal digital strategy, they turn to the hybrid technology of on-demand

We want to make the words 'Out of Print' obsolete," declared Barnes & Noble vice-chairman Steve Riggio in introducing the company's on-demand printing plans this month. "There are about 1.3 million titles considered ˜in print.' But about 90,000 titles go out of print every year, and we think that's a travesty," Riggio said.

A noble sentiment. Riggio's v-p of digital content, Kenneth Brooks, put this vision in slightly different terms: "We want to make available any book, any time, any place, in any format the reader wants." But what about printed books on paper? These on-demand physical editions offer the advantages of an electronic book -- quick turnaround and customized print-run. Increasingly, traditional publishers are using print-on-demand (POD) for titles that experience unexpected demand, while self-publishers are finding that it enables them to leap old barriers to entry.

Print-on-demand uses electronic files, either publisher's production files or scans of clean copies, to print a book on laser printers. There are two main POD printers, the original Xerox DocuTech and the IBM InfoPrint systems. Both print at a rate of several hundred pages per minute, and by the time the pages are collated, trimmed and bound, production of a single book takes about five minutes. Most POD books are perfect-bound softcovers, though some have hooked up specialty binding units to produce hardcovers. A third company, the On Demand Machine Corp. of St. Louis, offers one of the smallest POD units, and rumors persist of very small print-and-bind combinations coming from familiar names in computer printers.

The first major POD system to serve a wide market was Ingram's Lightning Print Inc., in LaVergne, Tenn. Designed to take advantage of Ingram's distribution network to bookstores, LPI concentrates on multiple-copy orders for titles that are temporarily out of stock at Ingram's warehouse.

Grab Your Partner
In recent months, there has been a flurry of activity as publishers, distributors and retailers have all sought partners in a scramble to find the right combination of editorial expertise, technical know-how and marketing savvy.

Borders announced that it would team with Sprout, a startup that facilitates electronic distribution using POD systems. The Authors Guild reached an agreement with Web-based publisher iUniverse (formerly t xcel) to distribute and print AG members' out-of-print titles via the Guild's Web site, backinprint.com. Cambridge University Press agreed to send more than 500 titles to Lightning Print for digitization. Midwest distributor Consortium began a program with Minneapolis-based printer Stanton Publication Services to offer titles on demand with overnight delivery.

In November, Barnes & Noble bought 49% of iUniverse, while Baker & Taylor's Replica Books POD arm signed an agreement with Web-based vanity publisher Xlibris. This month B&N released the news of its own POD operation, while Ingram signed with used, OOP and rare book Web merchant Alibris to cross-promote lists and produce hard-to-find books. Finally, two weeks ago, Random House announced plans to set up its own POD business in its Westminster, Md., distribution center, starting in late spring.

Many commercial sites, from AuthorLink.com to iUniverse to Versaware, are tied to or seeking to establish a POD channel. These companies hope they can capitalize on the common perception that anything that d sn't involve trucking and warehouse costs must be cheaper than anything that d s. And they realize that even the most ardent techie often prefers printed books.

The Warehouse Is the Thing
Many of publishing's biggest players recognize the need for digital distribution. But that still leaves open other questions, namely: Where and by whom should the POD hardware be placed for the most efficient use? Ingram, Barnes & Noble and Random House seem to agree that the easiest place to set up a POD unit is in a distribution center, using established channels to get the books to bookstores.

B&N will begin its program in its Jamesburg, N.J., distribution center, installing IBM's InfoPrint machines, the same printer used by Lightning Print Inc. Production is scheduled to begin in January at Jamesburg, with expansion into B&N's other two DCs as soon as practical.

Riggio announced that B&N would provide a "full range of digital services" for both publishers and customers. To further that end, B&N has invested in a production facility in the Philippines, where the company will digitize titles for publishers and convert them into on-demand titles, e-books based on the Open eBook standard, XML, or whatever formats are called for.

But where is the best place in the publishing value chain for the POD functions? While bookstores have been proposed -- buy it up front and print it in the back room -- one industry skeptic has doubts: "Bookstore printing d sn't pencil out. Either you don't get enough use, and the business won't pay, or you get too much demand at once, and have to sacrifice either quality or immediate delivery."

Soul in a New Machine
However, systems currently in development could put POD technology in every bookstore or quick-print copy shop. The On Demand Machine Corp. of St. Louis is installing its first full commercial system, called the BookBuilder One, at Eakin Press in Austin, Tex. The system has black-and-white printing, binding and trimming systems, and, perhaps most attractively, fits in a compact 8 ft. x 4 ft. x 4 ft. cabinet, about the size of large refrigerator. Eakin's Virginia Messer described the publisher's need for POD: "Many of our titles sell less than 500 copies. Trying to produce that on an offset press is just prohibitive. But with the BookBuilder, we can get the cost to about six cents a page, or about $15 for an average-size book."

ODMC is looking forward to putting a BookBuilder into Denver's Tattered Cover Bookstore as soon the machine is demonstrated to be reliable and the database of titles is sufficient to make it worthwhile.

Where Will Titles Come From?
There, of course, is the rub. Even with all the publishers and retailers mentioned above, the total number of titles available via POD is in the neighborhood of 5,000.

When Random House announced its POD plans, the Wall Street Journal quoted Random COO Erik Engstrom as noting the publisher's 20,000 backlist titles, while indicating that "as many as 50,000 titles that are no longer in stock could be revived." But how long will it take to get those titles into the POD databases? As one industry wag commented, "Lightning Print is adding, what, 50 titles a day? In three years they'll have covered this year's new titles."

Michael Holdsworth, business development director for Cambridge University Press, says even limited lists can be profitable: "Of Cambridge's 13,500 titles in print last year, 8,200 were backlist, with sales of less than 100 units per year. The average backlist title sold only 32 units. Even so, the backlist sales totaled $8 million. The 1,000 titles discontinued in 1997 had had $3 million in sales the year before," he added. "Print on Demand should be able to recover the sales lost by dropping those titles."

It Pays to Advertise
One question that remains is how to promote the titles that were out of print and have now come back. Most publishers we asked about plans to get the word out that a formerly OOP book is available again replied, "We'll put it in our catalogue." But that strategy ignores customers who don't see publishers' catalogues. E-marketing tools, like Amazon.com's collaborative filtering, may hold part of the answer. And bricks-and-mortar stores will want to become more communicative, Ã la Borders's new alliance with Sprout. Sprout keeps a database of titles in its servers in Atlanta, and can print books on a variety of machines (about 1300 titles are available). Sprout then delivers either digits or books to the store requesting them. D s the system work? Sprout co-founder Henry Cutting tells PW, "When Pocket brought out the e-book of Knockdown before the hardcover, we were printing and selling books the same day, as soon as we had the file."

Did S&S fear that e- and POD versions would cannibalize hardcover sales? According to sources at Pocket, the project was planned from the start to create visibility for Knockdown, to differentiate it from other titles on the same topic. Pocket Books offered POD trade paper editions as well as e-book versions; which format garnered the sales was not at issue. Given the buzz obtained in Newsweek, Business Week, Time and the New York Times, as well as industry journals, the project was a great success.

Currently Sprout has a demo POD system in Borders's Ann Arbor headquarters. According to Graeme Grant, associate director of emerging channels at Borders, the chain is testing kiosks in three Michigan stores, where customers can look up and order books they don't find on the shelves.

With so many sectors of the book industry showing enthusiasm, POD may have triggered the ultimate industry convergence: authors, publishers and booksellers all agreeing with one another.