During the meeting we heard a couple of presentations about Print On Demand technology from Caty Millar, CFO, Johns Hopkins University Press, and from David Prentice, Account Executive, from Lightning Source. David calls it Print to Order, but both were extolling the virtues of keeping books in print by keeping only virtual revenue. The key elements of the Lightning/Ingram program are:
- Books in the program are given an artificial inventory level of 100 copies at Ingram, so Amazon's website will read that the book can ship within 24 hours.
- Orders that come in for the book are printed within 8 - 12 hours after the receipt of the electronic order.
- Only the number of books ordered are printed. None go onto a shelf. (This is a huge difference from the ultra short runs they used to do).
- List price and Ingram Discount is set by the publisher.
- Publisher receives a monthly report along with a check for the price received, net Ingram's discount, and Lightnings printing costs.
- Books that work in this program should sell more than 13 per year, otherwise the storage charges will bring the entire cost structure negative for the publisher.
- Books in this program need to fit into one of the 12 standard trim sizes offered by Lightning.
This was all very compelling for the audience, as they see no cost of goods, no WIP, no Inventory, and maybe more importantly, no work for their production departments. It was clear from the conversation as well that the technology for POD (or PTO) is getting better and better, and that for scholarly texts, they could change the entire publishing budget plan for some books. It is possible to see a day, where the book is never done on a web or sheet fed press, ever.
This kind of print on demand has a few flavors, all in the category of digital printing. There is Print-to-Order (PTO), meaning one copy at a time. There is also ultra short run digital printing(USRDP), which for the sake of discussion should mean 2 - 10 copies. Lastly, there is short run digital printing (SRDP), which for the sake of discussion means 250 - 500 copies.
Now for some scholarly books SRDP is a good strategy for the first printing of a book that is not expected to sell well. While the unit cost is high, the overall cash exposure is relatively low, and if the books take off, then going to a web press is still an option. But, for most books, all the different flavors of digital printing are happening mostly on the second and subsequent printings. And this brought us to an interesting dilemma. Do we increase the "Printing Number" every time the book goes back for a reprint anymore? If a book is in the PTO program and sells 20 copies, does that mean it went back for 20 printings?
These question cropped up during the discussion of the AAUP annual Survey, where it was clear that a) there was no consensus on this topic, and b) it looked like most of the publishers felt that there was a clear distinction between the PTO model and the USRDP and SRDP models except that they didn't all make the same distinctions I made earlier - in terms of quantities. Here were the results:
out of 63 presses reporting, 20 considered each printing of POD or PTO as a unique printing, while 37 thought that SRDP should be considered a unique printing, and 43 thought that USRDP should be a distinct printing number. The only explanation I have for these results is that people didn't use the same definitions.
In the old world of four years ago when everything was printed in traditional methods, the "printing number" meant something. If a book was in its fourth printing, that was important for marketing bragging rights, as well as for citation purposes. If the book is cited in a scholarly paper, the footnote always displays the printing number of the book so as to distinguish it from earlier versions.
Also in the old world there was always a correction cut in to the film, minimally on the copyright page, but often on many other pages as well. In the digital world, the text is fixed by the publisher, and a new PDF is sent to the printer. But with USRDP/PTO, it is not always clear that new files are sent in advance of the printing. So the copyright page isn't updated. So is it really a new printing?
Bill Lindsay of Harvard University Press said that they rarely ever put printing numbers on the copyright page anymore, and they haven't seen any citation issues. Lain Adkins of Southern Illinois University Press was pretty vehement about the citation problem, and that a book can't be called a new printing if the underlying digital file hasn't changed. As the discussion continued, it appeared that the word 'printing' was the problem.
From a financial perspective, in the old world, printings had to be 'closed out'. Final costs had to be reconciled against the original estimates, WIP systems needed to be updated, and Inventory valuation had to be adjusted for the new books in the warehouse. How do you close out a printing without an estimate, without inventory, and without an invoice from the printer? Plus if a publisher has to close out 20 PTO printings a year, the overhead in the production department would cost more than the actual printing, binding, and shipping costs of the title.
This discussion never quite got finished, but it was clear that no consensus was possible on this day, and the discussion was put on the agenda for next years meeting. And I think more than a few of these CFOs are going to be wondering if they need the same production staffing levels in the future, if all the accounting, and overhead of producing reprints gets dramatically easier.