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Printed Books versus eBooks: Telling the Story

Ricoh commissioned an I.T. Strategies study titled The Evolution of the Book Industry: Implications for U.S. Book Manufacturers and Printers. The study looks at the impact of ebooks on printed book volumes, reader preferences for print versus electronic formats and more. Senior Editor Cary Sherburne spoke with I.T. Strategies VP Marco Boer and Ricoh’s Worldwide Manager Inkjet Technologies, Mike Herold, to learn more.

By Cary Sherburne
Published: December 10, 2013

The Evolution of the Book Industry: Implications for U.S. Book Manufacturers and Printers, an I.T. Strategies study commissioned by Ricoh, concludes that offset and digital production printing of books will coexist for the foreseeable future. At the same time, though, I.T. Strategies predicts that few book manufacturers will be able to justify reinvestment in offset printing technologies and will have no choice but to invest in digital production printing systems (primarily inkjet) if they are to survive and grow share.  The study states, “The risk of sitting still and maintaining the status quo for offset book manufacturers is greater than adopting a production inkjet strategy.”

According to data acquired by I.T. Strategies, there has been a decline in printed book purchases since the 2008/2009 recession at about 4% to 5% annually. Orders for books are becoming smaller and more frequent, like much of the rest of the printing industry, but at the same time, more titles than ever are being introduced each year.  We have seen this movie before.  Once average run lengths fall below a certain level, it becomes much more economical to use digital production technologies, and that is exactly what is happening with books.  Blame it on fewer readers reading fewer books and a proliferation of electronic reading devices.

We visited with I.T. Strategies VP Marco Boer and Ricoh’s Worldwide Manager Inkjet Technologies, Mike Herold, to learn a little more about what they learned during this project.

WTT:  Marco, in the report, you stated that the larger publishers who control 80% of the trade books industry are taking fewer chances on what they will publish in printed form lest they be stuck with lots of unsold inventory returns.  Can you add some depth to this statement?

MB:  Big publishers are basically less powerful than they were in the past.  More titles are being self-published, circumventing established publishers.  This has caused publishers to be more careful about what they publish. They have thinner margins and they are focusing on fewer returns.  Some older statistics said that there was 40% waste in the supply; we are now seeing numbers more like 25% to 30%, so their efforts seem to be working, although the numbers are still too high.

WTT:  As publishers have (I believe somewhat begrudgingly) embraced the ebook format, what does the current mix look like today?

MB:  Offering titles electronically does not correspond to revenue generation.  Even the largest publishers derive no more than 20% to 30% of their revenue from electronic book sales.  They have to offer electronic books and the share of revenue from electronic books is clearly growing fast, especially considering that this revenue stream didn’t even exist a few years ago.  But ultimately, more than 70% of their revenue continues to be derived from printed books.

WTT:  It is interesting that you found that publishers see the ability to give ebooks as a gift as a disadvantage for that form factor. Since it is easy to gift an ebook and lending/borrowing them is not that hard, I wonder if this is a disconnect on the part of publishers or wishful thinking?

MB:  It is somewhat akin to opening a bottle of wine with a screw top versus a cork. It just doesn’t have the same feel.  If you are going to an event and you want to give someone something, giving them a chit to download a book is different than handing them a nicely wrapped package that they can unwrap, with a book they can hold in their hands.

WTT:  With what types of books do you see growth?

MB:  Books that either have a local connection or content that has meaning to a specific audience.  Grandparents giving books to kids is one example.  And sometimes these are personalized.  Local history books are exploding.  There seem to be more retirees with time to write things.

Editor’s Note: A recent article in the Portsmouth (NH) Herald provided an example of this type of history/special interest book.  Sisters Karen Raynes and Marcia Hannon-Buber, granddaughters of Luigi and Celestina Marelli, just published a book entitled “Marelli’s Market: The First 100 Years in Hampton NH, 1914-2014.

WTT:  From a book printer’s perspective, who do you see as having the best success?

MH:  Some examples include BR Printers in the San Francisco Bay Area, Frederic Printing in the Denver area and Edwards Brothers Malloy in Michigan.  These companies all print books, but they are using their production digital inkjet presses for a variety of other applications as well. This gives them a little more flexibility to adjust to market demands and to seek different ways to maximize their core competencies.  They have implemented solutions that allow them to quickly and easily switch media, for example, to be able to move from one type of job to another.  This mix of applications and media types protects them to some degree from the ups and downs of any given market segment. For example, Frederic Printing is using its InfoPrint 5000s for books, but also for transactional printing and for printing ballots for the State of Colorado.

WTT:  What impact is production inkjet having on the book printing market?  What percent of pages do you think it accounts for now and where do you see that going?

MB:  From a page volume perspective, we think 18% of all book pages being produced in the U.S. is being produced on inkjet, but this is highly skewed by the top 25 book printers.  For example, one large book printer has five inkjet presses and is producing 350 million pages each month.  We are pretty confident that three years out, it will be 40%, but that also depends on how fast offset pages decline.  Inkjet is growing, no question. But again, the big guys could cause this to grow even faster, still skewing the numbers.  I could see a printer having 10 inkjet presses, each doing 50 million pages per month.

WTT:  What’s the message for book printers, then?

MB:  If you are a book printer today and just printing offset, in three years you will not be in very good shape at all.  You need to move to digital printing, and to do any volume, you need to move to roll-fed inkjet.  If you are doing small runs and one-offs, cut-sheet is still the model.  Otherwise, roll-fed is the answer. And it has to be inkjet where for monochrome books, the cost model will be almost on par with offset.  Books is one of the markets where we really see wholesale replacement of offset rather than new applications as we have seen in other markets.

Editor’s Note: The full research report can be downloaded here.

Cary Sherburne is a well-known author, journalist and marketing consultant whose practice is focused on marketing communications strategies for the printing and publishing industries.

Cary Sherburne is available for speaking engagements and consulting projects. To get more information contact us.

Please offer your feedback to Cary. She can be reached at cary@whattheythink.com.

 

Discussion

By Constantin Tudoran on Dec 10, 2013

Knowing who and what is Ricoh, I do tend to believe this study has distinct chances of being somewhat biased. From my experience, readers belong mainly to the older generations (people over 35) and they generally do not like reading on electronic machines. The very young and young generations (10 to 30) are not very interested in books, or reading in general. They even tend to skip required reading at school, in favor of book reports copied from the Internet. At any rate, investing in a roll fed digital (or any digital for that matter) is for the time being not a very good idea. As a matter of fact, investing in new equipment right now is like purchasing a computer at the begining of the 1980's. It would be obsolete in a year or even worse, the whole technology it's based upon would be entirely discontinued. We all agree that the printing plant of say... 50 years from now, will probably be a digital book production line that will print literally on demand single copies of books as per customer's request. However this is a thing of possibly, the very distant future. Mainly beacause publishers are also reluctant to expand into the digital books domain, since digital books can be very easily lend, borrowed, or given away, in original or in copy, which by all means is not easy to do with a printed book and can have most unwanted effects on their revenues. Also, as odd as it may seem, the persistence in time of electronic media, the substrate of the electronic book, is currently much below that of a printed book, measuring in years while a printed book will last decades if not centuries. It's most disturbing to find the (say) flash stick upon which you had a whole library of 500 volumes is no longer readable or most of the pages are garbled gibberish. People are generally not in favor of reading online (as in digital borrowing libraries). They would like to have something tangible in exchange for their money. In my opinion, we'll probably have a substantial amount of paper books being printed 30, maybe even 50 years from now. The largest adoption however in the range of digital seems to be for audio books. People seem to like to extensively use them, mainly in cars during driving from home to work and back. In this case though, we're talking mainly technical, job related of personal improvement audio books, not fiction or general literature.

 

By Cary Sherburne on Dec 11, 2013

If you read the entire report, and not just the headlines, I think you will see that it is not that biased. I am one of those "old people," way older than 35, sadly! I have more than 700 digital books in my Amazon library and read these books from my phone (Galaxy S4). Never thought I would be doing that, but the screen quality of these devices has improved tremendously. I would not depend on having some format on a flash drive. Rather, I depend on Amazon to make sure my file format does not become obsolete, understanding that that is still a risk.

That being said, I 100% do not agree with you on whether a book printer should investigate roll-fed inkjet. I have personally visited a number of book printers who have made this investment and are experiencing significant growth, both from the shorter runs that publishers are ordering and the growth in the self-publishing movement. It is the wave of the future. I also think Marco has a valid point in that commercial printers such as Frederic are making the most of the technology, augmenting book volume with other types of commercial printing applications.

People said the Xerox DocuTech would never fly in the 1990s and it turned into a $2 billion business for Xerox, basically obsoleting B&W offset. Marco makes a good point when he says that this transformation is different than what we have seen previously with digital printing, where a lot of the volume comes from new applications. In the case of book printing, the volume is straight offset transfer. Of course, it does allow "new applications" in the sense that it makes printing of smaller quantities for self-publishers affordable.

Time will tell who is right. But based on what I have personally seen and experienced, I respectfully think you are way off base in your comments.

 

By Constantin Tudoran on Dec 12, 2013

I am very sorry that you think so. I am also way over 35 (over 50 in fact) and have been managing book printing plants for over 2 decades now. One little thing though: not all markets are identical to the American market. And I'm not an American printer. You should be aware of the fact that there are many places on Earth were Xerox STILL only sells copiers (or not even). That the future belongs to the book printed as a single copy and sold as a gift or collector's item is obvious. It is only as to the distance to that future that our opinions diverge. Your opinion is that future is now. I do believe it's at least a couple of decades away. I'm not saying one should NOT investigate roll-fed inkjet. I'm just saying it's to soon to call. It's not obvious that the winner is inkjet. In fact, I don't think it is. The inkjet technology leaves a lot to be desired in affordability, sturdiness and ability to service. It requires a totally different set of skills for maintenance and repairs. So far, it's not for everyone. And in many countries, you should know, self-publishing is just a weird idea of eccentric authors.

 

By Cary Sherburne on Dec 12, 2013

Constantin, you are correct, in many ways this is a North America centric position. I do understand that it is quite different in other parts of the world. And the future will arrive at different times in different places. also, there is a great deal going on with high speed digital printing that will obviously change the landscape of what is offered today. I think that the times are exciting, though, and book printers, wherever they are in the world, should be keeping an eye on market and technology trends, making the decisions that are best for their businesses and their customers. They don't need to be on the bleeding edge, but they should try to be on the leading edge!

 

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