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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.