Book publishing is a segment in flux. Traditional business modules are under stress and there is need for change. This was a message clearly spelt out at the World Printers’ Forum Conference in Chennai recently. More from Susan Philip
Making a presentation on ‘Publishing in the digital world – how book publishers can drive greater revenue and create more efficient processes using digital printing technology’, Bimal Mehta, executive director, Vakil & Sons, stressed the need for change – new business models, new formats, new packaging and delivery systems and efforts to harness new technology.
Even while acknowledging that the industry was experiencing low growth, thin margins, high inventory and significant shipping costs, Mehta held out hope for the future, saying the market continues to grow a few percentage points year on year.
Book industry facts
Printing accounts for 15-20 per cent of the value of a book; most value is in publishing and distribution/ retailing
Digital printing can address many industry pain points and offer incremental revenue to value chain participants
Peak opportunities exist in certain book segments for printing and across all segments for managing flows of digital content
Noting that print volume had declined globally, Mehta said as a result inventory risks and production costs were rising in the current offset centric supply chain model, retailers were cutting down on initial order volumes and forecast uncertainty was increasing, as was inventory risk, while economies of scale were decreasing. Ebook sales were growing but flattening, he added.
In response to the changing scenario, publishers were taking steps to minimise monetary risks. “They are making content available in multiple forms and moving to digital for print runs below offset/digital break-even points. Another method of tackling the situation is to include automatic replenishment and micro-inventory management at or with printers,” Mehta said.
It’s all about content
With the rise of mobile, video, AR, VR, big data, little data, and the like, many publishers forget that content was evolving, Mehta observed. However, he stressed, it had to be kept in mind that content was the product. “Content needs to be delivered, how, when and where the consumer needs and wants it.”
“New Technologies are creating opportunities for book publishers to streamline their operations, distribute their books and develop new revenues streams. The revenue implications from digital can be huge,” Mehta said. It allowed publishers to adopt models such as distribute-and-print, selling on-demand copies, reviving out-of-print titles, and achieve significant savings by reducing inventory.
On the subject of inventory, Mehta said the traditional model of publishing was shifting from one almost exclusively based on speculative inventory to one based on micro or virtual inventory. The fiscal impact of the move to micro/ virtual inventory model was increasingly compelling, Mehta said, adding, the new business models were not only geared to reducing inventory, they also allowed new publishing models and products to flourish.
New revenue streams to tap
Hybrid model – e-books and print
Explaining the rationale behind the content distribution and pint-to-order model, Mehta said it was not just about production but about the very way in which a publishing business was constructed. It was based on cost per unit printed vs cost per unit sold.
Rethinking the economics of book printing
In the offset print model, there was huge potential for waste. If a publisher incorrectly guessed a title’s success, then the publishing house had to shell out a significant amount as warehousing costs. These costs might even outweigh book sales revenue, Mehta explained. Instead of measuring price per unit, publishers needed to understand the lifecycle cost of a book, he said. “This goes through the Introduction, Growth, Maturity/Stabilization and Decline stages, with annual sales volume peaking at Stage 3 before dropping.”
In order to achieve success, there must be strong infrastructure on the side of both printer and publisher. Publishers were looking for initiatives such as global, simultaneous print solutions, the choice of an appropriate print solution by a print partner, the parallel, automatic setting up of print-on-demand facilities, automated deliveries of ready-to-print files and distribution solutions such as consolidated deliveries and automated stock replenishment.
Mehta said publishers needed to create an accessible content distribution platform which facilitated, among other things, optimisation of print specifications, customisation of content, and track-and-trace encryption. Similarly, print services partners needed to ensure services such as integrated order management, tracking and billing and high quality digital press capacity.
Talking of changing trends and new possibilities, Mehta said mass digitisation was now seen as strategic. Many publishers were investing in transaction data warehouses. “New operational systems provide cleaner transaction information for data warehousing and analysis. Tools are available for projecting sales of new titles based on past performance of similar titles. During acquisition, expected revenue streams can be modeled to determine the quantum of advance and other contractual obligations. Reprint planning is also facilitated. These analytics have made publishing programmes more intelligent. Printers, distributors and booksellers are also capturing their operational performance data for analytics,” he explained.
Mehta used case studies of Palgrave Macmillan, which could not meet the demand for its science and technology titles in markets like China, Malaysia and Brazil, sometimes taking as long as a month to print and ship a title abroad, and of Boston-based King Printing, which had forged long-term partnerships with Houghton Mifflin, Pearson, McGraw-Hill and Hardcourt to offer short-run, fast turnaround services, to illustrate his points. In a nutshell, Mehta’s message to the delegates at the conference was: Print is not dead – just needs to adapt to remain relevant.
Vakil and Sons is a pioneer in print and publishing, with more than 70 years of experience. It provides specialised IT enabled (ITES) and printing services. Commercial printing, greeting cards and content management, book publishing and distribution, pre-media and IT services and financial reporting (XBRL) are its areas of expertise.