Several speakers at BISG's Making Information Pay seminar last Thursday
offered examples of how the growth of the Internet
and technological advances in printing have opened markets for deep backlist and titles with small
but steady sales--in line with Long Tail theory, discussed here
on Friday. As J. Kirby Best, CEO of Lightning Source, the print
on demand company owned by Ingram, put it, "Lightning is living the
Long Tail now." And rather than cannibalizing the market, POD is
expanding the market, he emphasized.
Started in 1997, Lightning has printed more than 27 million books "one
at a time." It now has some 350,000 titles in its digital library, 12
printing "lines," 4,200 publishing partners and is manufacturing more
than a million books a month. The average print run, Best said, is "1.8
copies." Some 81% of the books have retail prices between $9 and $25.99.
Publishers set the retail price and on a typical $24.95 title, after
the 55% wholesale discount and printing cost of about $3.50, $7.73 is
remitted to the publisher. "It's cheaper to print with Donnelly," Best
acknowledged. "But then on most of these titles, the publisher would
miss the sale."
Best estimated that about 720,000 books out of some 1.1 million
surveyed "fit our current manufacturing capabilities." Trim size,
binding type, page counts and other reasons make some titles bad fits
although as technology improves, that changes. Best noted that "Harry
Potter and some other titles will always be printed offset."
Traditional publishers, including Perseus, Cambridge, Wiley,
HarperCollins and Simon & Schuster, make up 59% of customers, while
"author services," including iUniverse, Lulu and PublishAmerica,
represent 38% of users. What Best called "content aggregators" make up
the other 3%, and "are getting to be quite large."
Lightning's distribution partners in the U.S. include Amazon.com, Baker
& Taylor, Barnes & Noble, Holt Jackson, Matthews Medical,
NACSCORP and, of course, Ingram. With Ingram, Lightning has developed
what it calls the print to order (PTO) program, which solves the
longtime problem of wholesaler inventory showing only a copy or two of
a POD title in stock without recognizing it as a title capable of
being printed quickly. Under the PTO system, Ingram shows the title in
inventory in larger quantities and Lightning agrees that if an order
comes in before 6 p.m., it will ship it complete to Ingram before 4:30
a.m. "It's been an exciting program, and we can see dramatic results,"
Best said. In 2005, PTO grew 110%.
Now that a federal appellate court has thrown out the patent suit against
Lightning Source and Ingram filed by On Demand Machine Corp., Lightning
Source intends to add facilities in the U.S. and abroad "where needed."
Ian Bradie, press distribution director of Cambridge University Press,
outlined the press's use of ultra shortrun digital printing (USR), which
differs slightly from POD in that POD is usually done to fulfill an
order while USR is "more speculative, in anticipation of orders," as
Bradie put it.
When the press began USR in 1998, it had some 13,500 academic titles.
About 8,200 of them sold fewer than 100 copies a year, and 2,000 of
those sold fewer than 10. The press published 1,500 new titles a year
and discontinued about 1,300. Each year the press received orders worth
$2 million for discontinued titles, "orders for books that were marketed
and sold, but couldn't be filled."
Now, in the eighth year of USR, the press has some 22,000 titles in
print, 7,000 of which are in the USR program. The press has "very few"
discontinued titles; most books that used to be discontinued have
become good candidates for USR. Cambridge adds about 1,700 titles a
year to the program.
From 1998 to 2005, the press earned some $30 million in extra sales
from the program; about 250,000 units with a sales value of $7.5
million were printed last year. By a 55-to-45 ratio, hardcovers
Books with 250-300 copies in annual sales are
"eligible" for the program, Bradie said. Sometimes these titles are hardcovers for
which a traditional paperback edition won't work or hardcovers whose sales
don't financially justify a traditional reprinting. In other cases, in
what Bradie called "the Lazarus approach," the press revives "an old
paper ISBN." The press excludes books with color plates, extensive
half-tones or with more than 700 pages from the USR program, but
quality is "always improving" and "we're pushing boundaries." Prices
are dictated by page length since the production cost is "solely a
function of the number of pages," Bradie said. "We typically break even at seven
copies." The process from an "editor's nomination" to
"program-ready" usually takes three months.
Stock can be ordered, printed and shipped and received within seven
days and is frequently much less than that. The program has a minimum
reprint quantity of one.
Bradie emphasized that there are significant "operating challenges"
that come with dealing with "hundreds of line items with just a few
copies each" in a shipping carton rather than the usual "huge amounts
of relatively few titles." Receiving titles is "a nightmare to deal
with." The press has adapted to this in part by converting a returns
line at its warehouse to receiving. In addition, the press has changed shelving. Books printed in the traditional way are still
shelved horizontally in relatively large piles while USR titles are
shelved vertically, which allows for more titles per shelf.
"We're still feeling our way," Bradie said. Nevertheless, "We've proven
the viability of this. Very substantial new income can be mined at low
cost with a healthy and durable bottom line profit. There are lower
overheads, lower risk with minimal inventory held, but there are also
integration challenges." Oh, and in other good news, returns are just