1. Understanding Profitable New Business
Dynamics for Publishers
(Thanks to Digital Printing, and Beyond…)
This BISG WEBCAST took place
Wednesday, March 30, 2011 at 1:00 p.m. Eastern
To register for future BISG Webcasts, please visit:
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2. 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
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3. Today’s presenters…
ANGELA BOLE
Deputy Executive Director
Book Industry Study Group, Inc.
JIM LICHTENBERG
President
Lightspeed, LLC
JOE UPTON
Principal/Vice President, Sales and Marketing
Malloy Incorporated
KENT LARSON
Vice President, Print-On-Demand
Bridgeport National Bindery (BNB)
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4. BISG WEBCAST
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5. Jim Lichtenberg
President
Lightspeed, LLC
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6. BISG WEBCAST
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8. “The way content is
being exchanged
among us is
changing radically.
This is driving AN EARLY BOOK PRINTING SHOP
work-process Image courtesy of Blair Hedges, Penn State
An early book-printing shop illustrated in a copperplate
change.” print by Stradanus (1590).
Copyright S. Blair Hedges
A multi-channel, multi-format
rapidly-changing industry.
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9. “I used to be asked to make
1000 copies of one thing…
Now I’m asked to make one copy
of a thousand things!”
Comment at the digital roundtable in October 2010
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10. Publishing grew out of
printing.
What
For the last 250 years, this is a
has been the key printer
relationship. in the
digital
Going forward, does all this age?
change?
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11. The Challenges
Publisher business models built around
revenues from print.
Established publishers under pressure
to 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.
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12. 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 productive
relationship moving forward?
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13. Joe Upton
Principal/VP,
Sales and Marketing
Malloy Incorporated
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14. Malloy Incorporated
1960
Today

15. 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

16. Old Supply Chain

17. Change Drivers
 Digital printing and POD
 Web Commerce:
• Paperless information flow
• Retail—Amazon
• Direct to consumer

18. New Supply Chain

19. Fragmentation Causes Complexity
and Opportunity
“Publishers have yet to  POD – Deep back list
integrate long run, short run, or micro-demand
ultra-short, and POD to
maximize revenue over title  Short run and ultra-short
lifetime” run (digital short-run) –
Minimize inventory cost
and cash outlay
 Long run – Minimize
printing cost per unit /
maximize profit on sales

20. 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

21. Cost Efficiency
Unit Cost
256 pp | soft cover | 4/c cover
Offset 1st Printing
Digital Short Run
Offset Reprint
Reprint breakeven
Digital vs. Offset ~ 400
New title breakeven
Digital vs. Offset ~ 750
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
00
50
00
50
00
50
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10
20
30
40
50
60
70
80
90
1,
1,
2,
2,
3,
3,
4,

22. 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

23. 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

24. Books When Needed—Case Study
The Book of Awakening
(448 pp, soft cover)
Copies Start Date Cycle Time*
6,000 23-Aug 12
30,000 13-Oct 9
10,000 4-Nov 8
50,000 23-Nov 5
37,500 30-Nov 4
5,000 7-Dec 4
15,000 14-Dec 8
15,000 27-Dec 5
15,000 19-Jan 9
7,500 23-Feb 11
191,000
*Working Days

25. Easy to Manage
 Simplified – Automated Transactions
 Web service tools for:
• Pricing
• Ordering
• Job tracking
• Inventory management

26. “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

27. Flow from printer/distributor to the world
•Optimize the
whole
•Simplicity: makes
the publisher’s job
easier
•Maximize revenue
per sale

28. Kent Larson
VP, Print-On-Demand
Bridgeport National
Bindery (BNB)
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30. 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

31. 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.

32. 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.

33. 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

34. 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

35. 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.

36. 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.

37. 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

42. 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.

43. 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.

44. Thank you!
We’ll now take questions
ANGELA BOLE
Deputy Executive Director
Book Industry Study Group, Inc.
angela@bisg.org
JIM LICHTENBERG
President
Lightspeed, LLC
jimlichtenberg@mac.com
JOE UPTON
Principal/Vice President, Sales and Marketing
Malloy Incorporated
joe_upton@malloy.com
KENT LARSON
Vice President, Print-On-Demand
Bridgeport National Bindery (BNB)
KentL@BNBindery.com
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