Lightning Source E-fulfilment deal for S&S, USA: by Gayle Feldman, 14th July
Simon & Schuster and Lightning Source, the Ingram Industries subsidiary, have entered into "the first major systematic alliance" for digitisation, e-book and print-on-demand fulfilment, Lightning Source c.e.o. Ed Marino has announced.
S&S has an active backlist of 12,000 titles and publishes 2,000 new titles annually. Lightning Source, as S&S's "preferred and primary digital fulfilment company", will begin to digitise "the majority" of the backlist - "at least 6,000 titles", S&S Online publisher Kate Tentler said.
S&S, Random House and McGraw-Hill have for some time been very proactive in forging digitisation and e-book alliances. But others are soon to follow. "Time Warner is really ramping up as we speak," Mr Marino said, hinting that an announcement would likely come in days. "Holtzbrinck will be accelerating," he added, "in a matter of weeks". Since October 1997, Ingram has digitised 10,000 titles (4,500 of them in the past 12 months) for 600 publishers. The company's Lightning Print print-on-demand service was consolidated in May with a complete e-book fulfilment service to create Lightning Source.
Until now, S&S "has been handling digital fulfilment ourselves on a title-by-title, company-by-company basis", Ms Tentler said. The new agreement will enable it "to streamline the whole process, which up to now has been extremely time-consuming", she added. "Instead of delivering seven different titles to seven different e-companies, we can go via Lightning Source and others can get our titles through them, very much like what happens in the print world. But if a retailer or e-provider does not have a relationship with Lightning Source, we'll find some other way to get them our titles. It's all so new. You figure out one piece of the puzzle and questions arise about a whole new piece. We take each piece as we can."
[Whatever can she mean? - A. M.]
LEAD STORY Print-on-demand company announces UK subsidiary and tie-ups with Bertrams and Blackwell 's
by Andrew Stone, 28th July
US print-on-demand and e-book company Lightning Source is to offer single-copy printing and short print-run services to UK publishers from next month. It has signed a deal with wholesaler Bertrams to handle the fulfilment to customers of single-copy orders.
Lightning Source plans to set up a print-on-demand (p.o.d.) facility in the UK by early 2001, offering titles within 48 hours. Before that it will ship orders to Bertrams through its Us operations. One of the first UK customers will be the publishing arm of Blackwell's, with which Lightning UK, the company's new subsidiary, has formed an alliance.
Lightning Source said the opening of its UK subsidiary and the agreement with Bertrams would give it the "technology, market presence and infrastructure" to deliver books on demand and economically. It would provide "unprecedented opportunities" for authors, publishers, libraries, retailers and consumers. Larry Brewster, Lightning Source chief operating officer, said that the company's facilities would make the production of low-volume titles and the reprinting of many out-of-print and hard-to-find titles commercially viable.
The UK market - where more than 100,000 titles are published each year - could benefit substantially from such a service, Mr Brewster said. Titles that sold fewer than 1,000 units a year would be most suitable for on-demand printing. "The UK market is a huge opportunity for us." Printing to order would also enable publishers to test the market for some titles without the expense of conventional print-runs. Moreover, it would enable them to reprint in smaller quantities and to hold and handle less inventory. "The end cost is higher, but when you take into account all the other savings in terms of not having to tie up capital [in pysical print-runs (sic)] it becomes a very interesting model. There's also a much lower barrier to entry. You can set up a book digitally for £94.
The Internet was proving a significant source of p.o.d. orders in the US, said Mr Brewster. Orders from Internet-based booksellers, such as Amazon.com, barnesandnoble.com, and from online publishing companies including iUniverse and XLibris, were the source of 45% to 50% of all Lightning Print's US orders. He added that he expected to extend the company's relationship with Amazon to its UK arm. The company is also close to signing a non-exclusive agreement with Macmillan. Ian Jacobs, m.d. of Macmillan Reference, said the two companies had agreed terms to provide print on demand as well as e-book fulfilment. "It's a really interesting development. It will help us get into the e-book business in a big way and expand our print-on-demand offering much quicker than we would otherwise have been able to."
Lightning Source, which launched in 1998, is a subsidiary of US wholesaler Ingram. It has agreements with more than 600 US publishers, holds more than 10,000 titles digitally, and is adding 1,000 titles each month. In May it was reorganised to form Ingram's joint e-book and p.o.d. business unit, able to provide a complete digital fulfilment service.
Lightning/Blackwell's, 4th August
Blackwell Ltd will work in partnership with Lightning UK, the e-book and print-on-demand publisher, and wholesaler Bertrams to sell an enhanced range of specialist academic titles.
The deal with Lightning UK is good news for Blackwell's, offering reduced print and production costs on books in its core academic and professional markets. "Print-on-demand technology is particularly relevant for our markets, which have seen print-runs for many specialist materials declining over a number of years," Philip Blackwell, Blackwell c.e.o. said. Blackwell Publishers and Blackwell Science, the sister companies of Blackwell Ltd, are also examining business opportunities with print-on-demand technology.
< b> Letter from Philip Blackwell, 4th August
Please allow me to clarify a potentially misleading aspect to your announcement (News, 28 July) about the UK launch of Lightning Source.
While our sister companies Blackwell Publishers and Blackwell Science, are both actively exploring the potential of new print-on-demand technology, the third partner in the new strategic alliance with Lightning UK and Bertrams is actually Blackwell Ltd, representing our UK bookshop chain (Blackwell Retail Ltd), global library distribution business (Blackwell's Book Services) and online bookshop operations. The Blackwell's offer, both on and offline, is about providing our customers with access to the most comprehensive range of books.
Print-on-demand technology is particularly relevant for our core academic and professional markets, which are heavily dependent on specialist information but which have seen print runs for many such materials steadily declining over a number of years. Working with Lightning UK will help us to make more titles more easily available to more customers, improving our service to them and driving additional sales across all channels. The introduction of this new resource naturally complements our existing bookshops stockholdings, specialist services to libraries and bibliographical/ordering facilities, and represents another important piece in our evolving digital strategy.
Print-on-demand offers many commercial opportunities to increase sales and reduce costs. We hope that Blackwell's involvement will encourage more suppliers to make their books available in the new electronic format.
Philip Blackwell, C E O, Blackwell Ltd, Hyde Bridge Street, Oxford
THE RISE AND RISE OR PRINT-ON-DEMAND
Production News piece by John W. Birkenshaw, 29th September
Commercial on-demand book production services are now widely available, but until recently the prevalent view was that on-demand production was a niche activity only relevant to out-of-print books, specialist academic books, vanity publishing and customised productions.
A study by Pira International has revealed that the key book production producers in the on-demand market in Germany, Holland, US and the UK are finding the scope of application is much wider, and that a large proportion of their production (more than 50 per cent in some cases) is now of frontlist titles.
To understand why this is the case, it is necessary to take a closer look at the attributes of on-demand production. Certainly, p.o.d. (print-on-demand) is applicable to the short-run, specialist areas listed. A book's life can be prolonged and additional sales revenues secured for a marginal increase in costs. But at the start of a book's life, especially if total sales are rather uncertain, p.o.d. provides a means of minimising risk.
Life-cycle costs
These observations are not new, but the Pira study demonstrates that these advantages can be obtained at little loss to the publisher's profitability, especially when one takes a realistic view of what has become known as the life-cycle cost. The life-cycle cost of the book includes not only production cost but also warehousing, distribution, costs of capital tied up in stock, retailing, and the cost of handling returns. It includes costs associated with the books that are sold, and also the costs of those books that are not, and as this often amounts to 20 per cent to 30 per cent of total production, it is clearly a substantial sum.
The Pira study has constructed financial models of the different supply chain structures that are possible with p.o.d. production, and compared the traditional unit cost of production point of view with the life-cycle cost view. Where book sales are 1,000 or less per annum, the p.o.d. production is similar to conventional production in total life-cycle costs (and hence gross profit for the publisher) but with reduced risk and capital employed. This has the advantage of enabling sales to continue at a low level, thus maximising revenue overall.
Supply chain variables
The study has also examined different supply chain structures that are possible with p.o.d. production and the associated business models. There are a number of variations in use for each of the main supply chain models that provide different benefits for the players. One observation is that p.o.d. facilitates the bringing together of previously separate functions.
So we find examples of warehousing and production being combined, publishing and production being combined, retailing and production being combined into a single company (or at least into a close alliance or partnership). By pursuing this approach, the combined operation gains the profit margin of the previously separate function and increases its own added value generation. A summary report of the Pira study will be published shortly containing the main findings.
An international conference is taking place in London on 29th and 30th November during which the leading exponents of p.o.d. from around the world will present their business models and explain how they see the business developing.
Click for An Ultra Short Run (print-on-demand) or OUP's & CUP's licensed p.o.d. website Lightningsource.com or Akme's collated list of OUP and CUP p.o.d. authors and titles, other p.o.d. publishers and notes.