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BISG WEBCASTwww.bisg.orgBISG WEBCASTwww.bisg.org
Understanding Profitable New Business Dynamics for Publishers
(Thanks to Digital Printing, and Beyond…)
This BISG WEBCAST took placeWednesday, March 30, 2011 at 1:00 p.m. Eastern
To register for future BISG Webcasts, please visit:http://www.bisg.org/event-cat-6-webcasts.php
© 2011, the Book Industry Study Group, Inc.
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Creating a more informed, empowered and efficient book industry supply chain for both physical and digital products.
BISG is committed to the development of effective industry-wide standards, best practices, research and events that
enhance relationships between trading partners.www.bisg.org
2© 2011, the Book Industry Study Group, Inc.
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ANGELA BOLEDeputy Executive DirectorBook Industry Study Group, Inc.
JIM LICHTENBERGPresidentLightspeed, LLC
JOE UPTONPrincipal/Vice President, Sales and MarketingMalloy Incorporated
KENT LARSONVice President, Print-On-DemandBridgeport National Bindery (BNB)
3© 2011, the Book Industry Study Group, Inc.
Today’s presenters…
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Jim LichtenbergPresident
Lightspeed, LLC
5© 2011, the Book Industry Study Group, Inc.
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“The way content is being exchanged among us is changing radically.
This is drivingwork-process change.”
A multi-channel, multi-formatrapidly-changing industry.
8© 2011, the Book Industry Study Group, Inc.
AN EARLY BOOK PRINTING SHOPImage courtesy of Blair Hedges, Penn State
An early book-printing shop illustrated in a copperplate print by Stradanus (1590).
Copyright S. Blair Hedges
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Comment at the digital roundtable in October 2010
“I used to be asked to make1000 copies of one thing…
Now I’m asked to make one copyof a thousand things!”
© 2011, the Book Industry Study Group, Inc.
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Publishing grew out of printing.
For the last 250 years, this has been the key relationship.
Going forward, does all this change?
Whatis a
printerin the digital
age?
10© 2011, the Book Industry Study Group, Inc.
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Publisher business models built aroundrevenues from print.
Established publishers under pressureto run two businesses.
Publishers have yet to integrate long run, short run, ultra-short, and POD to maximize revenue
over title lifetime.Long runs for warehouse inventory are becoming
short runs for JIT inventory, or “no” inventory.New technologies are transforming
printing and manufacturing.
The Challenges
11© 2011, the Book Industry Study Group, Inc.
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Yes!We need to align the transformations in publishing
with the transformation in printing.The goal: to create profitable business models on
both sides of the industry.
Is there a productiverelationship moving forward?
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Joe UptonPrincipal/VP,
Sales and MarketingMalloy Incorporated
13© 2011, the Book Industry Study Group, Inc.
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1960
Today
Malloy Incorporated
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Who we are
Family owned Full service one and two-color book printer Hard and soft-cover Multi-color covers, jackets and components Publishers across the USA $37 million in sales Produce over 31 million books / year 8,000+ jobs / year Range: 1 to 225,000 copies Median quantity: 2,000 copies 8 Timson webs for text 1-2/c, 4/c and 5/c sheet-fed Digital printing equipment for ultra-short run Storage and fulfillment solutions
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Change Drivers
Digital printing and POD Web Commerce:
• Paperless information flow• Retail—Amazon• Direct to consumer
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Fragmentation Causes Complexity and Opportunity
“Publishers have yet to integrate long run, short run, ultra-short, and POD to maximize revenue over title lifetime”
POD – Deep back listor micro-demand
Short run and ultra-short run (digital short-run) –Minimize inventory cost and cash outlay
Long run – Minimize printing cost per unit / maximize profit on sales
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Print to Demand
Printing what you need when you need it – Print to Need!
Primary elements: Cost efficiency over broad range of
quantities Speed to market Easy to manage
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Cost Efficiency
Unit Cost256 pp | soft cover | 4/c cover
100
200
300
400
500
600
700
800
900
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Offset 1st PrintingDigital Short RunOffset Reprint
New title breakevenDigital vs. Offset ~ 750
Reprint breakevenDigital vs. Offset ~ 400
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New Technology=Cost Efficiency
New casebinder at Malloy: 5-7 minute set-up vs. 30 minutes First book is good Cost effectively bind five copies
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Speed: Books When Needed
Uncertain about demand at launch:• Print too many—store cash in the
warehouse• Print too few—miss sales
Solution—fast turn at any quantity Total cost of two offset print-runs is
the same at any combination of quantities
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Books When Needed—Case StudyThe Book of Awakening
(448 pp, soft cover)Copies Start Date Cycle Time*
6,000 23-Aug 1230,000 13-Oct 910,000 4-Nov 850,000 23-Nov 537,500 30-Nov 45,000 7-Dec 4
15,000 14-Dec 815,000 27-Dec 515,000 19-Jan 97,500 23-Feb 11
191,000
*Working Days
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Easy to Manage
Simplified – Automated Transactions Web service tools for:
• Pricing• Ordering • Job tracking• Inventory management
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“The goal: to create profitable business models on both sides of the industry.”
Supply Scenarios to Consider: Source with specialists Split the flow:
• Serve the channel from a distributor/warehouse
• Feed the web through the printer Save on transportation cost Higher margin per sale
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Flow from printer/distributor to the world
•Optimize the whole
•Simplicity: makes the publisher’s job easier
•Maximize revenue per sale
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Kent LarsonVP, Print-On-DemandBridgeport National
Bindery (BNB)28© 2011, the Book Industry Study Group, Inc.
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Bridgeport National Bindery, Inc.
• Established 1947
• Certified Library Bindery , member BMI
• Restoration / Conservation
• Five Divisions
• Casebinding for printers needing high quality finishing from digital presses since 1991
• Primary focus is binding. Began printing in 2003 to satisfy requests for single orders
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So…what were you doing 20 years ago? (pre-Internet)
• Digital printing enters the picture.
• Lower quantities, lower expectations of quality.
• Early adopters were STM publishers.– Higher margin / fewer books / text based
• Books produced and then shipped to warehouses as traditional distribution model.
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Next…what were you doing 10 years ago? (Web 1.0 bust/Napster suit)
• Digital printing enters mainstream with higher quality B&W and improving color quality.
• Computer use is ubiquitous at every level of production.• More publishers are experimenting with Print On Demand
and begin drop shipping direct to customers.• Warehouses are receiving cartons, not skids.• New ideas, trial and error. Invention.
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Now…why can’t I remember what I did yesterday? (Social Media/Devices / Apps?)
• Choice abounds in physical and electronic formats.
• Digital printing allows production of quality and convenience; reduced or no inventory in warehouses.
• Growth of direct-to-user fulfillment. P and E books
• It’s truly about the Long Tail
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What does this mean to understanding profitable new business dynamics?
• We have three styles of customers who seek us out and are looking for new ways to sell their books.
• Publishers
• E-Commerce / Web based start ups
• Individuals
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All are looking for the same thing:
• They know their content matters…to someone.
• They want their content available whenever.
• They want high quality.
• They are looking at the total cost of having this book available, inventory free; not just the cost of manufacturing.
• Simply, each book ordered makes money.
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Importing Files & Orders
• Using EDI – files housed on local server. Titles are “set-up”.
Orders are for “live” titles.• Using XML – files used, then purged.• Using email – files placed on ftp, imported and
housed locally.Emerging technology:• Using SmartStream – assets housed at RIP level for
building books.
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Binding & Production• Casebinding
– PVA Cold glue adhesive allows for rounded spine.– PUR (Polyurethane) allows for flexibility and strength
to heavy ink coverage and coated papers.– Saddle Stitching allows for Library quality children’s
books.– Covers are: printed and laminated or cloth with foil
and Jackets.• Paperbacks• Saddle Stitch & Comb Binding
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Shipping & Fulfillment
• 1500 Shipments daily.• A shipment can be 1 book or a 1000.
Average 2.5 books.• UPS, FedEx, USPS, Common Carrier.• Packing list contains publisher
information: discounted pricing, branded logo and address.
• BNB loves to be invisible.
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Invoicing / back-up
• All shipments confirmed electronically.
• Each order has printing, binding and shipping detail itemized.
• Invoicing by individual orders or weekly,
bi-monthly or monthly.
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We’ll now take questionsThank you!
© 2011 the Book Industry Study Group, Inc. 44
ANGELA BOLEDeputy Executive DirectorBook Industry Study Group, [email protected]
JIM LICHTENBERGPresidentLightspeed, [email protected]
JOE UPTONPrincipal/Vice President, Sales and MarketingMalloy [email protected]
KENT LARSONVice President, Print-On-DemandBridgeport National Bindery (BNB)[email protected]