Introduction: Publishing is changing
John Charnock, Director, Print Research International Ltd
It is very clear to see how publishing is changing in the world today; first music publishers, then newspaper publishers and now magazine and book publishers are finding that their markets are changing beyond recognition. These changes are a double-edged sword. On the one hand it represents a significant opportunity but on the other we will see traditional volumes decline and the traditional manufacturing model become increasingly inappropriate.
Traditional manufacturing equipment is no longer adaptable enough for this changing market. I doubt that a 30,000 books per hour binding line like the Muller Martini Corona I installed into a major UK Book Manufacturer some 10 years ago will ever be needed again in most markets.
Why? Well, the needs of the modern book publisher are changing and as suppliers we need to adapt.
Historically trade book print runs were 2000 – 3000 copies and these were bulk packed and supplied to the publishers warehouse. Publishers had millions of pounds held in inventory within in their warehouse. Volumes and margins were sufficient to have time to manufacture and store on a quarterly cycle. Today, with financial pressures on publishers and the ebook pushing down price, the market is much less predictable. Having lots of inventory and the risk of holding unsold stock is becoming unattractive to today’s publishers.
Even using traditional equipment regular orders of 500 copies is not uncommon but the trend for lower quantities and more frequent order cycles is obvious. So where is the trend going and what are publishers really looking for in the longer term ?
What is the Holy Grail for publishers ?
Trade Mono books have been the fastest to change, because they are relatively cheap, they are much less predictable in terms of sales and within the UK there is still a large proportion produced in the UK. Colour books however, are still mostly produced in the Far East or countries with a low cost base.
Let’s deal with mono trade books first, We have seen a significant investment in digital mono trade books in the UK with Clays, CPI and many others like Ashford and TJ International investing in inkjet production. This investment means that the mono trade book market is largely manufactured on a retail “on demand” basis.
I believe that once the mono trade book supply chain is established it will not be long before the colour trade book market will follow similar lines.
The reason for this belief is as follows:
Publishers need to react to the market place, sales are less predictable and it is becoming more and more difficult to be sure which titles will be successful and which ones will not. A publisher once said to me “ I have 5000 titles – I know 30% will be big sellers, I just don’t know which 30% that will be”
We also know it takes 3 days to get a book into a publisher’s warehouse and process it. It then takes 3 days to get it out again. 6 days is too long in today’s publishing world – Publishers need to be able to look at the retail and internet sales that occur in the prior week and order or replenish for the following week – it is that simple.
That means that ultimately we will need to produce orders of 200-500 on a 3-day turnaround as a minimum, even with traditional equipment. Looking forward, there will continue to be pressure to offer increased availability in order to service publishers at the level that they require which will mean that digital colour production will be a requirement. (In my experience Litho simply can not do that).
The switched on printers are taking that principle one stage further. If a printer is delivering an order in 3 days – why not bypass the publishers’ distribution system and warehouse altogether and deliver direct to store? Not as single jobs, but as a mixed batch of titles based on that stores sales the prior week?
If this is possible, with minimum impact on unit cost, this would be the publishers’ “Holy Grail” In some quarters I think that this is happening already. I believe that this is why Penguin/ Harper Collins moved all their trade titles from a two-supplier agreement (St Ives, Clays and CPI) to a single supplier agreement (Clays). The fewer suppliers means better manufacturing and distribution efficiency.
This means that printers will need to print orders of 5- 500 on a weekly or daily order cycle, but these orders will be in significant annual volumes; because the trade market consumes many millions of books per year.
This requires that digital book manufacturing needs to, and is, gearing up to this challenge.
Move To Colour
Once inkjet can achieve acceptable colour for the publishers there is no reason why a trade book printer could not migrate to colour and fulfil the majority of titles to the trade market. This represents a significant opportunity for them as colour books have higher value and is a market that they previously did not serve.
Digital inkjet colour is here and many book printers are building their expertise in this area and offering publishers an opportunity to repatriate colour book production from China to the UK and Europe.
This raises some challenges however:
- For both colour and mono books to be produced in the same factories there needs to be some significant infrastructure changes. There is a need for better quality systems, better workflow and a fully integrated sales order system that integrates with the publishers and retailers ERP systems.
- The Colour market has a significantly higher colour quality requirement, and so colour management and batch to batch consistency will need to be managed. The fear for publishers is that the quality of their brand names and authors names is reduced. Colour books still need to have a high value perception by the general public irrespective of the production process.
- Manufacturing equipment will need to be more automated, more flexible and able to change from one format to another seamlessly. Paper changes and section layouts will need to be able to cope with B format, Royal, A4, A5 as a minimum.
- The logistics of tracking signatures, covers, jackets, cases, and getting the right components in the right place at the right time so that they can be produced efficiently and with a minimum of waste. MIS, barcode and signature recognition, motorized changeovers, JDF and inter device communication as well as integration with external data sources – Carriers, Retail systems will be needed to make sure the supply chain runs smoothly.
What’s the point ?
This seems like a lot of investment, a lot of effort and a significant risk for all involved? But the benefits are equally high – just look at how Clays has secured a 100% supply deal with Penguin/Random House. This means that the print service provider becomes a much more significant partner to the publisher. Once the supply chain is integrated and the savings have been made for the publisher, the printer becomes a logistics partner, a strategic partner , supplier that is involved with circulation, distribution and is ultimately responsible for making the publisher competitive in a very difficult market.
If I am right about colour inkjet it will meant that a significant amount of colour book production will be repatriated to the local market from the Far East and other regions meaning that a traditional trade book printer can grow significantly- After all there aren’t many traditional colour book printers left in the UK or Europe.
This supply chain model will enable publishers to publish more titles with less up front risk, it will open up local and self publishing opportunities for retail stores and make the book very competitive against other electronic publishing technologies.
Other opportunities will be to open up the deep back catalogue so that publishers can sweat their assets and printers can produce one off products and potentially deliver direct to consumer. As the supply chain and speed to market increases we could see new products like personalised books, especially for children, to become an every day way of adding value to what was once a commodity product as well as book stores offering more time sensitive products like magazines and newspapers.
As publishing the supply chain changes we will see more products produced locally in order to fulfil the time sensitive needs of the publisher.
Print Research International Ltd
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