Category Archives: Printers

O’Reilly Media took five years to have confidence in POD

This report in Publisher Weekly highlights how slowly things work in book publishing, and how building the right supply relationships takes time.

O’Reilly has to be considered one of the most innovative and tech-savvy book publishers on the planet, but even for them it took five years of dedicated trialing of print-on-demand before they could be ‘comfortable that moving more printing to pod to will free up cash to be used on the acquisition of content’.

And their partner is Ingram, parent of Lightning Source, the most well-resourced book wholesaler with pod facilities in the world.

It is further evidence that the Lightning Source model makes sense. In one way it heightens the challenge for local printers who can not match Ingram’s global distribution capability, but it may also give them some hope. It is difficult for large companies like Ingram to always respond quickly and effectively to the needs of local smaller publishers, and that’s how new players can get a stronger hold on local opportunities.

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What can book printers learn from Lightning Source?

The Australian rumour mill has run rife 2 or 3 times over the past five years with the expectation that Lightning Source is ‘about’ to open its doors here. But with September’s announcement, it looks like it is really happening with the opening date set for June 2011.

What potential do they see that we don’t? Australia is such a small market it is hard to see how the board of the multi-billion dollar Ingram empire could be serious about this move.

Does this point to real growth in our own backyard, and perhaps growth of a kind that is very different to what we might have imagined up to now?

Major local book printers, like McPhersons, Griffin, BPA, and Ligare, have all been responding positively to the growing demand from their major publishing clients for shorter print runs. In fact, the competition amongst this group of local book printers has become so fierce during 2010 that, for quantities of even less than 20, prices have fallen by over 50%.  This means the production cost of a 200 page paperback, with B&W internals and a colour laminated cover, is getting down to the $4 or $5 mark. Perhaps they saw Lightning Source coming and knew they had to act in such a dramatic way, but is it enough?

Here are a few reasons why Lightning Source might not think print pricing is the only key to competitive strength:

1. Managing the data is what really matters – Lightning Source is a sister company to Ingram Digital that is offering publishers sophisticated content management solutions. Their two main products, Core Source and Vital Source, together with Lightning Source really do offer exciting opportunities for publishers to deliver their content seamlessly to both print and electronic media and through mixed distribution channels. Our local printers, even the best and strongest of them, will find it very difficult to compete with these integrated solutions, no matter how cheap their book printing becomes.

2. Global marketing requires global distribution – few medium or large sized publishers can afford to only focus on the Australian market. Setting up and maintaining global distribution arrangements that incorporate print-on-demand solutions is not easy. The Ingram/Ingram Digital/Lightning Source model makes great sense for them.

3. Has the horse bolted? – There is the possibility that the falls in local pricing reflects both pure desperation and a big shake-up that is about to come. The merger between McPhersons’s and Griffin that got knocked back by the ACCC previously might now be the only way to salvage these two companies, and perhaps others along with them.

On the positive side, there are still some reasons why local printers might continue to enjoy some competitive advantage over Lightning Source.

1. Relationships matter – local publishers are, on the whole, very loyal to their preferred printer. There have been a few examples of non-traditional printers breaking into the traditional book market, such as SOS in Sydney and their POD service for Random House. But mainstream publishers have tended to remain loyal to the established book printers and have worked with them to develop more responsive print solutions that deliver mutual value.

2.  Printed books are not going out of fashion – we know that, traditionally, about half the books printed in Australia are not for  mainstream book retailing (refer the PIAA and APA ‘Book Production in Australia – a Joint Industry Study’ 2001). We also know that the number of titles being registered with an ISBN is steadily increasing, due largely to print-on-demand (see evidence in the UK). It is reasonable to predict that the opportunity for digital book printing will grow (but it doesn’t  help volume off-set book printers).

3. Close proximity has value – The fact that Lightning Source can write a business case to invest in a plant here suggests that locating on-shore has real value. With smaller publishers likely to continue to prefer locally owned printers, not all the business is going to disappear.

4. Copyright is not straightforward – There are many tricky aspects to territorial copyright that even they may not have worked out yet – being able to print and ship in the US does not necessarily mean you can print the same book in Australia, it all depends who has the rights. Many Penguin, Harper Collins, Hachette and other major publisher titles are sold under a different publisher agreement in Australia. It is possible that Lightning Source still have hurdles to jump before achieving the print volumes that their current management information systems predict.

It is difficult to see any local book printer surviving for more than five years, in their current form, unless they really ramp up their digital offerings. Publishers will increasingly need to offer the full range of hardback, paperback, ebook, re-purposed, diced and spliced, electronic book products, through a complex international distribution network. To do this the publisher needs a print solution that is neatly integrated. If it is not all in the one business, it ought to be facilitated via the same file preparation tool, the same job submission interface, and the same order management environment.

It is particularly difficult for local printers to rise to this challenge when the publishers do not have a homogeneous set of technical needs. However, that’s business, and that’s why all book businesses need to be learning as much as they can from the moves of the more agile giants like Lightning Source and their parent, Ingram.