The big difference between the past and the present is that for the first time in history, printed books are optional. The implications of this fact are profound.

Until very recently the only mode for publishers to introduce content was print.  Printed books defined publishers. With the advent of digital technology, however, a new breed of publisher arose that can if it chooses publish a book originally in digital format and postpone the print edition or skip it altogether.  Well into the present decade traditional publishers like Random House and Simon & Schuster and Macmillan clung to the imperative to issue print volumes before releasing them as e-books.  Eventually they yielded to the exigency of releasing the e-book simultaneously with their print edition.  Issuing e-books without having to do print editions at all, however, is not a measure to be taken lightly.

One reason is commercial. Original e-books put traditional publishers at a serious competitive disadvantage. Whereas those houses currently pay 25% net royalty to authors, most independent e-book publishers pay at least twice that much, and self-published authors can get as much as 70% royalty by direct uploading of their content. The Hachettes and Harpers and Penguins can reason that they are adding value and brand-name prestige, but that argument doesn’t hold water for many authors who are simply in the game for money.

More significantly, by electing not to print a book at all, these so-called legacy publishers put themselves in danger of losing the very thing that defines them. What profiteth a publisher to gain the world and lose its soul? Today Random House is a completely different species from independent e-book publishers like Open Road.  But by becoming a pure e-book publisher, the playing field is leveled, and the difference between Random House and Open Road becomes simply one of scale.

When we talk about the death of printed books we are really talking about the death of printed books distributed in bookstores.  With the death of a Borders and the announced reduction of Barnes & Noble’s  bookstore floor space by 25%, print on demand, a business model that does not depend on store sales or the returnability of books the way traditional bookstores do, increasingly becomes an option. If publishers elect POD for all their books they will not only continue to make money from printed books but could potentially rescue their identities, and maybe their souls as well.

Richard Curtis

Besides the obvious boost in e-book sales, Amazon’s POD program made a huge difference for this embryonic press. “Our new company publishes titles simultaneously in hardcover and paperback using print-on-demand technology, and e-books. Because our books are nonreturnable, most booksellers will not carry them. Amazon does.”

Though Amazon may not strike many as being in need of friends, Roxburgh feels the behemoth has been excessively vilified. “Not since Hester Prynne walked out of prison with an infant in her arms and ‘a rag of scarlet cloth’ in the shape of the letter A has there been such public hue and cry as Amazon has provoked in the past few weeks,” he declares. “From the point of view of this lunatic fringe publisher, Amazon, with all its glitches and stumbles, is crucial to our success. And I, for one, applaud the innovation and transformation Amazon has brought to the publishing world.”

Okay, that’s one. Anybody want to make it two?

We will. Without Amazon’s retail clout and marketing genius, E-Reads would still be in the dark ages of the 20th century (when it was founded).  We are also happy to shout out our other indispensable partners: BN.com, Ingram, LightningSource, Apple, Sony, Google, Kobo, Diesel, Content Reserve, Baker & Taylor and Fictionwise. In 2011 E-Reads sales exceed $1 million and we could not have done it without them.

For Roxburgh’s full editorial in PW, click here.

Richard Curtis

At launch, HarperCollins will work with On Demand Books, LLC, the maker of the Espresso Book Machine, to enable instant distribution of books that are not currently stocked in stores. With the push of a button, books can be printed, bound, and trimmed to a bookstore-quality, perfect-bound paperback book, with a full-color cover, in minutes.

“Even as digital book sales grow, bookstores continue to be an important place for customers to shop for physical books. The goal of this initiative is to give the local bookseller the capability to provide customers with a greater selection of HarperCollins titles in a physical environment,” said Brian Murray, President and Chief Executive Officer of HarperCollins Publishers. “For authors this is a win; titles will be more broadly available, which increases sales with full print royalties. Depending on the size of the store, 25%-80% of our backlist titles are not stocked due to physical space limitations. DPR technology means the books will be there for the consumer at small and large bookshops.”

“We are delighted to add HarperCollins to the Espresso Book Machine network,” says Dane Neller, Chief Executive Officer of On Demand Books. “By committing thousands of titles to the program, HarperCollins is showing its clear support for bookstores and authors, and reaching more readers. Digital-to-Print at Retail is a powerful new sales channel for publishers. It eliminates lost sales due to out-of-stock inventory and provides a new marketing platform in partnership with bricks and mortar booksellers.”

“The ability to have available any book that our customers could possibly ask for is key to our vision of how to thrive in this challenging environment,” said Jeffrey Mayersohn, Owner of Harvard Bookstore. “The HarperCollins partnership with On Demand Books brings us much closer to realizing that vision. This is great news for independent bookstores everywhere.”

“With HarperCollins making their titles available for the Espresso BookMachine, the original vision and full potential of the machine will begin to be realized. Thousands more titles will be directly available to my customers, and we will capture many, many sales which are currently lost,” said Chris Morrow, Owner of Northshire Bookstore. “I hope other publishers see the potential of this sales channel and get on board. This can be a key element in the development of the bookstore of the future.”

HarperCollins trade paperback books, including adult and children’s titles, will be available on Espresso Book Machines starting in November. Titles from Zondervan and HarperCollins Canada will be available early next year. Booksellers who are interested in exploring HarperCollins “Comprehensive Backlist” offer should contact their HarperCollins sales representative to determine the optimal level of core print books that stores should carry, relevant incentives, and merchandise opportunities. The program will be available to any bricks-and-mortar book retailers. Book retailers can work directly with On Demand Books, or the vendor of their choosing, to install the machine in stores. Booksellers can contact their HarperCollins sales rep for more information.

Though the technology hasn’t taken off as dramatically as expected, we have never abandoned our confidence that it must inevitably prevail.

Our optimism was reinforced by HarperCollins’ announcement of plans to upload into Espressos some 5000 backlist titles. “The program will enable bookstores to offer thousands of trade paperback books from the HarperCollins catalog through a mix of traditionally printed books and DPR [Digital-to-Print-Retail], as space and cash flow restrictions will no longer be a factor,” declared HarperCollins.

Details here.

RC

In a newsletter sent to Dorchester authors and agents the company described the course set by CEO Robert Anthony and his financial and editorial team.  Among the highlights are: bringing royalties up to date, improved e-book and trade paperback royalties, shift from mass market to print on demand trade paperbacks, more responsive royalty accounting including a clear statement of reserves against returns, and provisions for recovering rights in the event of Dorchester’s failure to report and pay royalties on a timely basis.

For the summary statement click here, and for the actual terms of the amendment, click here.

Anthony and his staff have expressed their determination to create a streamlined new company responsive to conditions of the 21st century. We hope this is the beginning of a turnaround for an excellent genre publisher that, like every other publisher today, is reinventing itself in the Digital Era.

Richard Curtis

No no no! We meant the Espresso printer!

Don Quixote’s demented crusade could not be more – er, quixotic – than our advocacy of print on demand kiosks.  We’ve promoted their installation not merely in bookstores and libraries – the logical place for them – but in such counterintuitive locations as drug stores, truck stops and bagel shops.

With the advent of print on demand technology there is no longer any reason for books to be sold only in bookstores, though certainly bookstores would be a good place to start. We  particularly urge the management of Borders to use its space (what remains of it) as a showroom for a million-book library that can be downloaded or manufactured on the spot.

If you want to see how our promotion of e-book and POD kiosks has nearly deranged us, click on this menu of coocoo articles dedicated to the subject.

Several factors have limited the adoption of POD on a mass commercial basis. One is the ungainly size of the printers (though that has not discouraged the Harvard Book Store in Cambridge, Mass.).  Another is the lack of an organized, gung-ho sales force.   These barriers however, may soon come down according to Publisher’s Weekly‘s Judith Rosen.

Rosen reports that “a new partnership with the American Booksellers Association to help get frontlist and midlist titles from mainstream houses (something that has eluded On Demand Books to date), an agreement with HarperCollins for some backlist titles with the promise of new releases at some point in the future, and more involvement from Xerox, the Espresso Book Machine could be poised to become a bookstore staple. The marketing arrangement with Xerox last March gives the On Demand Books a sales force of 4,000, and more financially attractive leasing options for the Espresso Book Machine.”

Which is why, despite our having been knocked off our horse so many times, we are ready to remount and charge the kiosk windmill yet again.

Details in Book Machines Near the Tipping Point?

Richard Curtis

Well, if I were in charge of Borders’ reorganization I’d urge the installation of e-book and print on demand kiosks. E-books could be viewed and sampled on the kiosk screen, purchased and downloaded directly into the customer’s Nook, Kindle or smart phone. Printed books?  Like the tiny Harvard Book Store about which we recently wrote, which offers a selection of 4 million titles on its Google-powered virtual bookshelf (every one of them turned face out), Borders could have Espresso Print on Demand presses on the premises that manufacture any book to order in the time it takes customers to have a snack in the coffee shop.  (See NYC Pharmacy Chain Installs DVD Kiosks and I’ll Have Four Sesames, Four Poppy Seeds, and One Copy of War and Peace.)

Richard Curtis

Customers access Google’s vast database of titles, many of which are facsimiles of antiquarian works worth a king’s ransom in the original but only a few dollars in replica. Writes Mayersohn: “The first book that we printed on Paige [the owners' nickname for their pet printing machine] was the Bay Psalm Book, the first book printed in English-speaking North America. The original was printed on Stephen Daye’s press in Cambridge, about a hundred yards from the location of our store, almost four centuries ago. There are 11 extant copies of Daye’s original printing. Now any customer can own a scan of the original book.”

Interestingly, though customers can download the Google  e-book versions of these editions free, they like the feel of a printed book in their hands, and the look of it on their shelves. “For many readers and for writers, the allure of paper remains,” says Mayersohn. ” Watching the joy on their faces leads one inevitably to the conclusion that we still cherish the experience of the printed word, preserved for eternity in the pages of a book.”

But reprints of ancient tomes are only one part of ye olde booke shoppe’s custom. Of the 1500 or so books that “Paige” prints monthly, three quarters are self-published works, Mayersohn explained in the “Soapbox” feature of a recent Publishers Weekly. You can read details in Hit ‘Print’: How One Bookstore Uses Its Espresso Book Machine.

You can expect to see more Espressos popping up in bookstores as the technology is perfected and miniaturized.  Indeed, as we recently pointed out, there’s no reason why POD kiosks need to be restricted to bookstores.  See I’ll Have Four Sesames, Four Poppy-Seeds, and One Copy of War and Peace

Richard Curtis

Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by Publishers Weekly.

FOR IMMEDIATE RELEASE

Challenging book publishers’ expectations, a new Report from Forrester Research forecasts slow growth for both eBooks and eBook reader devices. However, strong projected sales of custom-printed trade books and digitized textbooks will force publishers to dramatically restructure their processes and technologies.

Above, the opening paragraph of a report issued by Forrester Research -  in December 2000. To their credit, they got it half right: digital technology in the form of print on demand is revolutionizing the printed book industry.  As for e-books, here’s what Forrester’s senior analyst had to say: “Publishers are expecting trade eBook sales that won’t materialize — the drawbacks of reading onscreen will discourage all but the most motivated readers.”

Oh well, all of us prophets have an off-day

Read details in eBooks Will Flop, But Print-On-Demand And Digital Textbooks Will Thrive, Predicts Forrester Research

Richard Curtis

Every aspect except one, that is.

As the three day event progressed I realized that one subject was being overlooked. I pored over the conference schedule seeking programming about print on demand. I found none.

Why should I have expected any? It was an e-book conference, not a print conference, right? Well yes, unless you think of PODs as e-books that are printed and bound. And I happen to think that’s what they are.

It’s not surprising that few think of print on demand as a form of electronic publishing. Because POD produces a tangible object – a printed book – we lump it together with other machine-made goods.  Of course, all printed books are machine-made, whether offset in large quantities or printed on demand in small ones. But that’s where the resemblance stops.

Offset printing is designed to serve a traditional bookstore distribution model. After publishers make educated guesses about how many copies they can sell, they print copies to distribute in bookstores. Because they cannot predict how many copies will be sold, a great many will be returned to publishers for full credit. In the last few decades the return rate for trade books has soared to 50% and even higher, and if the decline of the publishing industry can be attributed to any single business practice, the consignment model of printing and distribution is it.

Contrast that with print on demand, in which copies are not printed until customers have ordered them on the Internet and paid for them in advance. Although books printed on demand are occasionally returned, the return rate in POD is negligible.

Unlike offset printing, POD is ideally suited for a book industry based on preordering – what might be called the Amazon model, a model that is transforming the retail landscape. (See A World without Inventory, Part 1 and Part 2)

The offset and on-demand business models could scarcely be more different from each other. On the other hand, POD and e-books are twins – fraternal twins perhaps, but twins nevertheless. (They were even born the same year, 1998.) The way you order a POD book is identical to the way you order an e-book. The only difference is that the printed volume is “uploaded” into your mailbox instead of your e-reading device.

When we founded E-Reads in 2000 we made POD one of our foundation stones. We were certain that until a viable popular e-reader was created, the reading device of choice would remain the printed book.  This turned out to be correct.  Until very recently, when the Kindle revolution took hold, POD sales represented about 50% of our revenues. It remains a significant contributor to our – and our authors’ – revenue stream. And of course it provides printed copies to those readers who prefer them to e-books. And there are still a lot of them.

It is also becoming a significant option for small presses and big publishers alike. David Taylor, President of Lightning Source Inc., arguably the largest POD press in the world, reported last spring that business was growing at a rate of 20% to 30% annually. Lightning prints, binds and ships 2 million copies a month on machines that run around the clock, a statistic all the more remarkable in view of the average number of copies per title they print on any given press run: two! And that’s just one POD company. There are others including one owned by a little outfit called Amazon. Many independent publishers are shifting to a purely POD model, and bigger houses use POD to keep books in print after inventories diminish and the cost of doing new print runs is prohibitive.

If we may therefore presume to make a suggestion to the program directors of Digital Book World, some attention to POD in 2012 would be welcome by many attendees. How do I know? Well, about 20,000 people have signed up for the On Demand Expo in Washington DC in March 2011.

Are POD’s e-books? Without a doubt.

Richard Curtis

Net sales of Amazon leaped by 39% in the third quarter of the year,  exceeding predictions of $7.35 billion. Fourth quarter revenues are estimated to be over $12 billion.  What happened to its stock on the day that news was announced?

1. It went up by 5%
2. It went up by 10%
3. It went up by 20%
4. It went down by 4%

If you guessed 1, 2 or 3 you don’t know jack about investing.  In fact it dropped 4.01% to $158.35, because investors were disappointed. Why?

According to Publishers Weekly‘s Jim Milliott it wasn’t the earnings. It was the spending. “Investors were disappointed,” he wrote, “with the company’s higher spending on new distribution centers. Analysts said they were concerned about the cost of the 10 giant warehouses that opened in the third quarter, which ended Sept. 30, and a handful more that are to open before the end of the year.”

In a publishing environment that has shifted to digital delivery – and who knows more about that than Amazon? – the construction of brick and mortar depots to contain printed books feels not just counterintuitive but downright perverse.  This is especially true because Amazon has the wherewithal to do away with warehouses altogether. It’s called print on demand, and Amazon has a division called CreateSpace devoted to printing books on demand.  Sometime back we speculated that Amazon’s POD operation could make warehousing a thing of the past. (See The Nine Gazillion Pound Gorilla Bares Its Fangs.)

Though Milliott points out other reasons that investors were not enchanted by a growth surge that would be the envy of any other company in the world, Amazon’s heavy bet on a fading world of tangible goods could continue to drag the stock down.

Read about it in detail in Print, Digital Book Sales Accelerated in Third Quarter, Amazon Says

Richard Curtis