On-Demand Titles Drive Jump in Book Output

by Jim Milliot -- Publishers Weekly, 5/28/2008 9:57:00 AM

The production of traditional books rose 1% in 2007, to 276,649 new titles and editions, but the output of on-demand, short run and unclassified titles soared from 21,936 in 2006 to 134,773 last year, according to preliminary figures released Wednesday by R.R. Bowker. The combination of the two categories results in a 39% increase in output to 411,422. Although it has tracked production of on-demand titles in the past, this is the first year the company has broken out the segment to better show the differences in the traditional categories (such as biography, fiction, juvenile) and the on-demand segment.

The new segment includes traditional books printed by mainstream publishers using print-on-demand technology, public domain titles published through p-o-d as well as titles from self publishers and very small independent press that use p-o-d. Kelly Gallagher, general manager of business intelligence for Bowker, said that all three areas played a role in the unprecedented jump in output. It’s not possible to determine at this point whether the spike in on-demand titles is an aberration or the beginning of a long-term trend.

Among the traditional categories, the biggest gain in output occurred in literature, which rose 19%, to 9,796 titles, while fiction was close behind at a 17% increase to 50,071 titles; fiction is also the single largest category. Seventeen categories had a drop in output, with the largest decline in business with title output down 12%, to 7,651. Output in personal/financial titles fell 8%, while publication of religious text dropped 5%. Juvenile title output fell 1%, to 30,063.

Between 2002 and 2007, production of traditional titles rose 29% compared to a 313% increase in the on-demand segment resulting in an overall increase of 66% in the five-year period.

05/31/08 4am

Authors Guild Looking at Antitrust Issue of Amazon’s POD Plan

By Jim Milliot -- Publishers Weekly, 4/6/2008 10:03:00 AM

Saying it is reviewing the antitrust and other legal implications of Amazon’s “bold move,” the Authors Guild sent an e-mail late Friday to its membership questioning the motives—and implications—of the e-tailer’s new position on print-on-demand that makes publishers use its BookSurge division if they want the sell their titles on Amazon in the traditional manner. While Amazon is pitching the move as a consumer-friendly change that will improve the speed of shipping books and other products, the Guild says it suspects the motivation has more to do with profit margin than customer service.

If Amazon is successful in wresting a large chunk of pod business away from current leader Lightning Source (which the Guild says does a good job), they will have taken a huge step in controlling publishing’s supply change and thus control much of the industry’s long tail business, the Guild said. “Once Amazon owns the supply chain, it has effective control of much of the "long tail" of publishing,” the statement reads. “Since Amazon has a firm grip on the retailing of these books (it's uneconomic for physical book stores to stock many of these titles), owning the supply chain would allow it to easily increase its profit margins on these books: it need only insist on buying at a deeper discount -- or it can choose to charge more for its printing of the books -- to increase its profits. Most publishers could do little but grumble and comply.”

If Amazon does impose deeper discounts, the big losers, other than Lightning, will be authors, since many are paid for on-demand sales based on the publisher’s gross revenues, as well as publishers, the Guild says.

The statement closes by inviting anyone who has information that could help the Guild investigate the matter to contact it by phone at 212-563-5904 or through its site, authorsguild.org.

On Demand Books Signs Agreement with Lightning Source

By Judith Rosen -- Publishers Weekly, 4/2/2008 7:33:00 AM

“It’s always been the holy grail of the book business to walk into a store and get any book,” said Kirby Best, president and CEO of Lightning Source. With the signing of today’s strategic agreement with On Demand Books, proprietor of the Espresso Book Machine, Best sees that goal coming a little bit closer.

“When we first got into this, we thought our technology would be ahead of the content. Now we have to catch up,” said Dane Neller, cofounder and CEO of On Demand Books. The Espresso Book Machine prints and binds inidividual books in about 15 minutes. The partnership with Lightning Source gives On Demand access to its scanning facilities, but it also gives the company access to copyrighted material through an opt in/opt out clause that Lightning Source will add to its publisher contracts. At present, the titles available through Espresso fall mainly in the public domain.

Just how much difference the agreement will make in the short term is debatable, given that there are only seven Espresso Book Machines in use, two in bookstores. One is at Northshire Bookstore in Manchester Center, Vt.; the other at the University of Alberta Bookstore in Edmonton, Canada. Of course, one of the possibilities that the Espresso Book Machine opens up is for libraries, which have also been early adopters of the machines, to sell books, not just lend them. As the machinery becomes cheaper and easier to operate, nonbook businesses could choose to become publishers and booksellers, as well.

In its current iteration, however, the Espresso Book Machine is costly, and it takes over a month to produce a single machine. “We’re building a new machine that’s much smaller that can be mass produced, version 2.0,” said cofounder and chairman Jason Epstein. Neller adds that a beta machine, which will be the size of a copier at Kinko’s (3’ X 2-1/2’ for the finishing unit with another 2’ for a duplex printer), will be ready in the fall. If all goes well, a less expensive model will begin leasing in 2009.

“The point of this machine is to represent the ultimate in POD,” said Epstein, who sees it as the best way to preserve backlist. If the machines catch on and proliferate like so many Starbucks outlets, the marketplace would become radically decentralized and book distribution would require simply an Internet connection.

Despite the fact that much of Ingram’s business relies on the very distribution methods that On Demand could destroy, Best has been in touch with the company for several years to find ways to work together. “The most important thing for us,” he said, “is to create more and different channels for our publishers.” By providing content through this alliance, Best wants to free up On Demand to focus on the technology.

Amazon Explains POD Move; Ingram Raises Questions

by Jim Milliot -- Publishers Weekly, 3/31/2008 1:56:00 PM

Amazon has sent an open letter to “interested parties,” explaining “what we’re changing with print on demand and why we are doing so.” Amazon has caused a major stir in the pod field with its decision to have publishers who want to sell pod titles directly through its Web site use its BookSurge pod subsidiary. And late Monday afternoon, Ingram, parent company of BookSurge rival Lightning Source, issued a statement from John Ingram noting the concerns it has fielded from publishers about Amazon’s actions.

In the letter from the Amazon.com books team, the company reiterated that by using machines that are located in its own fulfillment centers, Amazon can have a title ready for shipment quicker than if it needs to wait for a book to be shipped to its facility. The extra time will permit Amazon to “marry” a title with another product that will be shipped in the same box, in most cases hitting Amazon Prime shipping times. “It isn’t logical or efficient to print a POD book in a third place, and then physically ship the book to our fulfillment centers. It makes more sense to produce the books on site, saving transportation costs and transportation fuel, and significantly speeding the shipment to our customers,” the letter states.

Amazon further notes that if publishers do not want to use BookSurge for pod, they can still sell their titles through the e-tailer as part of it Advantage Program, provided they pre-produce five copies of each title that Amazon will stock in its warehouse. Publishers can also use Amazon’s third party marketplace option to list titles. Amazon is not requiring that pod titles be printed exclusively through BookSurge.

Amazon closed the letter by stating that it will only reconsider the policy “if we can find a better way to serve customers faster.” The company noted that while some of its earlier initiatives “caused consternation at times,” it has stuck with changes that it believed are good for customers. Amazon cited its decision to provide customer reviews on the site as one that was initially criticized by many publishers, but which led to more sales. A second controversial move, which caused “significant consternation,” was Amazon’s decision to sell used books along side new editions. Despite lots of protest, Amazon notes it “stood by the decision because we were convinced it was right for customers.”

In his statement, John Ingram said that while “the questions that are being raised about Amazon.com and its Booksurge division don't directly relate to Ingram - either Lightning Source Inc. or Ingram Book Group - it clearly is alarming many of our publisher partners.” According to John Ingram, “publishers are telling us they feel Amazon.com’s actions are not appropriate.” John Ingram’s statement adds that the company has been unable to get a direct response from Amazon about its pod shift.

“We all live in a world where decisions are made about insourcing and outsourcing, and free choice is important,” the statement continues. “At Ingram Book and Lightning Source, we are going to work really hard to continue to be the compelling choice as publishers make their outsourcing decisions. Our breadth of distribution channels including the online retailers remains the same, and Ingram still provides one day turnaround in the fulfillment of orders for books including print on demand titles.”

Amazon to Force POD Publishers to Use BookSurge

by Jim Milliot -- Publishers Weekly, 3/28/2008 8:34:00 AM

BookSurge, Amazon’s print-on-demand subsidiary, is making an offer that most publishers would like to refuse, but don’t feel they can. According to talks with several pod houses, BookSurge has told them that unless their titles are printed by BookSurge, the buy buttons on Amazon for their titles will be disabled. A detailed explanation of her how the new program was explained to her is provided by BookLocker.com co-owner Angela Hoy on her writersweekly.com blog.

Over the last year, BookSurge has been trying to cut into the market share of pod leader Lightning Source and is using the selling clout of Amazon to generate more business. “I feel like the flea between two giant elephants,” said the head of one pod publisher about the upcoming battle between Lightning Source and BookSurge/Amazon. He said although the deal with BookSurge will be more expensive, he has no choice but to make the move since most of his authors expect their titles to be for sale on Amazon. He added that his company will also continue to use Lightning Source for printing as well. Amazon's BookSurge mandate extends to traditional publishers as well as to online pod houses.

An Amazon spokesperson explained that the new policy will allow the company to "marry" books with other products that a customer might buy at Amazon, which would be combined in the same package. She said for publishers that don't use BookSurge for pod, they can still use Amazon's Advantage Program (which works on a consignment model) or third party vendors to sell their pod books.