bisg webcast -- understanding profitable business models (03.30.11)

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.


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)


Today’s presenters…


Jim LichtenbergPresident

Lightspeed, LLC



“The way content is being exchanged among us is changing radically.

This is drivingwork-process change.”

A multi-channel, multi-formatrapidly-changing industry.


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

BISG WEBCASTwww.bisg.orgBISG WEBCASTwww.bisg.org 9

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.


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?



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



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?

© 2011, the Book Industry Study Group, Inc. 12


Joe UptonPrincipal/VP,

Sales and MarketingMalloy Incorporated


1960

Today

Malloy Incorporated

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

Old Supply Chain

Change Drivers

Digital printing and POD Web Commerce:

• Paperless information flow• Retail—Amazon• Direct to consumer

New Supply Chain

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

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

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

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

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

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

Easy to Manage

Simplified – Automated Transactions Web service tools for:

• Pricing• Ordering • Job tracking• Inventory management

“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

Flow from printer/distributor to the world

•Optimize the whole

•Simplicity: makes the publisher’s job easier

•Maximize revenue per sale

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

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.

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.

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

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

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.

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.

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

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.

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.


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]

mailto:[email protected]�






bisg webcast -- understanding profitable business models (03.30.11)

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