Is Amazon Poised to Steal Print On Demand?

Many saw Print On Demand (POD) as the ultimate ‘just in time’ production solution to book publishing, which would wipe out all the inefficiencies of the ‘just in case’ approach that plagues the book supply chain. So why didn’t it happen, or did it happen for some and not for others? Is there a new dawn, or just a new set of people who have been sold a pup and not looked hard at the facts?

Today we read that Barnes and Noble are installing Espresso Book Machines in three of their store, including their New York flagship in Union Square. Books-a-Million also has installed two in its stores last year and Powells has one in Portland. But are all these genuine investment cases or mere subsidised trails? 

   

We are all aware of the huge success Ingram have made with Lightning Source both in the US and UK and the substantial side benefit this has given them with Ingram Digital and in acquiring digital content. Some would suggest that other more single focused operations such as Rowe’s in the UK have been less successful and in general, the main production presses have continued to plough their own furrows. Amazon acquired Booksurge which has now morphed into CreateSpace and has been aligned closely with their Kindle KDP and Audible self-publishing offers. In 2012 Kodak entered into the space with a strategic alliance with Espresso to site POD machine in non book outlets to also service their picture kiosk offer and although two machines were installed in Bartell Drug Stores near Seattle, this apparently has failed to impress Kodak.

In the UK Blackwells installed an Espresso POD machine in their Charring Cross store. There were many mistakes made, with the machine not only taking up valuable retail space, but often being unmanned, as staff wanted to sell books and didn’t want that ‘monitor’ position. The customer also had to often wait, either for someone to operate it, or just for a book to be spat out. Best of all, they had so much faith in its ability to drive sales, they tried to hide the machine around a corner. They didn’t know its audience and it was poorly marketed both within the store and to a wider audience.

The challenge is not the technology, it’s with its adaption and adoption, subsequent return on investment for all and perceived added consumer value. It’s also like eInk technology, in that it looks great and is capable of delivering, but if it takes too long, or the wrong strategy is adopted, it can be overtaken and merely becomes transient technology.

Many suggested that POD would solve many environmental issues but we would suggest that they first may wish to also look closer at the technology and paper stock used in the current machines.

The challenge is that POD means many things to many people.

To some it is a substitute for short print runs. One academic publisher very successfully could predict sales of its back list, so it set thresholds at which POD kicked in and replenished inventory according to forecasted demand and in doing so kept high priced books in stock. It even only had one location worldwide to service distributed hubs and they could afford to fly it around the world once sold. POD can work on predicable sale patterns and high ticket books.

Others waited until the backlist book inventory hit the bottom and operated on sell one make one basis, again ensuring the book remained in stock and obviated the ‘reprint under consideration’ lost orders and print gambles.

Some printed more POD stock than was healthy and used POD to simply reduce their print run exposure and inflated the price to pay for this higher ticket item. Interestingly, ask those POD operators if the print singles or bulk orders first? Also like any machine they return the best investment if they operate flat out and not intermittently between the hours of 9 till 5. 

However, the big challenge for many was the basic model. All tended to stick with the print and distribute model and this was personified by Ingram who printed and then distributed, either on a pick, pack and dispatch direct to order, or more frequently indirect to stock. The real opportunity was to flip from ‘print and distribute’ to ‘distribute and print’ and bring the manufacture closer to the consumer. But to do so one now has to ask what is ‘local’ in a world were delivery is shrinking to same day?

So why do we think that the Barnes and Noble ‘test’ is irrelevant? Firstly, unless the service is perceived as universal then it has questionable marketing advantage and real cost and service issues as there will be more ‘only available at limited stores’ and less ‘available here.’ We don’t envisage a return to the 17 and 18th printer within the shop and the machines are not going to shrink to a desktop today. We do however see it working within institutions and public libraries who often have different needs, service offers and return on investment critique.  

So who could be a winner apart from Ingram? Well this is yet another lesson being taught by Amazon, who, by reducing their delivery times to even same day, have potentially removed the ‘local’ issue. If the can buy online and have it turned around in the same timescale as a traditionally printed book, will the customer care if it’s POD or traditional? Amazon has also gone for the classic sell one make one model that aligns to self publishing and positioned it alongside KDP and their Audible self publishing offers. Tomorrow they are in a great position to now offer the same service to publishers and retailers who wish to reduce stock but increase availability. Maybe Booksurge was a very canny buy and under CreateSpace can become another part of an increasingly well thought through and formidable holistic offer.

Digital Evolution: Part 2 Images

Yesterday we explored the evolution and impact of digital music and today we look at Images. This can be ‘still images’ such as photography, or ‘moving images’ such as film, animation and television.

We now all take television, photography and film for granted, but it was less than 200 years ago that the only way to capture images was literally with a pen, ink and paint. It wasn’t until the 19^th century that photography, followed later by film was invented. Many of the technologies first adopted were time consuming, proprietary and gave low quality results but the seeds of mass adoption and audience were sown.

Although Kodak proudly boasted of their camera in 1889, ‘you press the button we do the rest,’ the rest was what made companies such as Kodak very rich.  The first movie camera didn’t appear until 1880 but it wasn’t until ‘The Jazz Singer’ in 1927 that sound on film became reality. Ironically, at the same time in the ‘20s, Logie Baird was creating the very first television signals.

The digital evolution which began 1957 with Kirch’s first digital picture (176 x 176 pixels) and later with Kodak’s first megapixel sensor in 1969. The next decades have somewhat mirrored the experimentation phases of the 19^th century and at the same time have had the same profound impact on how we now, create, develop, share, distribute and consume images.

Tim Berners-Lee published the first photo on the web in 1992. Today we all post our pictures on the likes of Facebook and store our digital libraries on the likes of Instagram. The once mighty Kodak has fallen and technology has consolidated and shrunk into the smartphone we all carry. This means that we are all now capable of capturing that moment and instantly posting it, not just to friends, but to everyone connected to the net.

We witnessed the bloody video wars between VHS and Betamax which were won by the availability of the first consumer camera and some would suggest the take up of the technology by the porn industry.

Television is no longer restricted to the schedule. The likes of Tivo and later BBC iPlayer have redefined TV on demand. The increased capacity of today’s network means we don’t have to buy the DVD, or the lost Blue ray, we can click and watch almost anything on demand when we want, where we want and on what we want. This is now resulting in the merging of services. The likes of Netflix, iPlayer, Sky and others are commissioning their own unique material to supplement their existing content. Film channels that were once provided on the back of a connection service, such as Sky, now have to compete with services such as Netflix who don’t have the same infrastructure. TV schedules and ratings have become less important and the money is shifting to the value of the rights, content and brands.

We have seen the production experts and expert tools continually fall. To alter an image you once needed an expert, then you needed very expensive and complex software tools, now the likes of Adobe Photoshop, digital publishing and movie publishing software is freely available to all. Even the relatively new world of CGI, which commanded an expensive software price, has now plummeted down in price and is available for all at £5K and falling. Technology, or its cost is no longer a barrier to creative entry.

YouTube has not only started to redefine music consumption it has helped redefine moving image quality. What once would have been frowned upon as sub standard filming is now more acceptable. Even the movie industry has made ‘hand held’ films and recognised that everything doesn't have to be perfect. CCTV surrounds us and what appears to be our every move. The smartphone has also started to redefine news coverage, where news can be instantly capture and contrary to the words of Gil Scott Heron, the news will be televised.

However, finding a digital needle in a digital haystack still requires effort. Still images are all too often badly indexed and their rights unclear. Semantic tagging is still a holy grail with one person seeing ‘Hay’ and another a ‘straw hat’ and another seeing neither and just a painting by Van Gogh.

So what is the future of imagery? Sharing and distributing and being able to consume content has never been simpler and available to all. However, a good photograph still requires a photographer, a good film a director, script and actors.

It’s not so much about technology, it’s about human creativity.

A 100,000 Picture Kiosks Don't Make a Digital Summer

The recent news that Espresso Book Machine suppliers, On Demand Books, were to partner with Eastman Kodak and ReaderLink Distribution Services to distribute book production to potentially 105,000 locations was greeted by many smaller presses and self publishing houses with great enthusiasm.  Kodak is reportedly working with On Demand to integrate the Espresso Book Machine with the widely available KODAK Picture Kiosk and potentially provide 7 million titles on the long awaited ‘distribute and print’. ReaderLink open this opportunity further to include some 24,000 retail outlets (drugstores, groceries, etc).

However, since it conception the On Demand model has failed to take off at the direct to consumer end. POD (Print on Demand) has made it mark on the traditional production cycle, helping some to reduce risk with smaller and more frequent print runs and to keep titles effectively in print and negate rights being reverted.  Smaller presses and self publishing ventures have clearly benefited but at has been at a higher unit cost, environmental impact and mainly restricted to monochrome. In essence the market remains one of 'print and distribute' and not 'distribute and print.' The POD market is now dominated by the likes of Ingram and not On Demand who have failed to sell but a small number of machines and make any real market penetration.

Since the Espresso first appeared the digital market has exploded and the impact of this must reduce the opportunity both in terms of genre and consumer appeal. It also assumes consumers will want to go to Kodak locations and not bookstores, which may be achievable but at what cost to the already ailing bookstore.

We don’t know the economic model, pricing and what the turnaround and service offer will be today. but these will greatly determine its appeal and success. The trick will still be to get the machines into bookstores, libraries, schools etc and apart from content what do On Demand offer that others could not do more effectively?

We can’t help thinking this is somewhat of a marriage of convenience between two potential digital 'losers' and just having Picture kiosks in many locations is nothing if it’s the wrong location, wrong price, wrong service offer and its an inferior offer. 

All Change!

We often assume the future is a linear path and change is never going to be that disruptive and even if it is we have time to adapt. There have been many ‘black swan’ changes introduced by a completely new entrant, the shift to a new model, new technology and even a widespread change in consumer attitude and culture. What drives what may be clear in some cases and in others it appears to just happen.

Last night I spent time with an ex senior executive of Kodak and found it fascinating to hear how they failed to read the signs and even attempt to adapt. They basically didn’t believe that the film processing model would change. They had many smart innovators and even introduced much of the digital technology, they certainly had a swath of patents, they experimented with social web libraries. Unfortunately, the core business thought that change would be slower than it was and they just didn’t have the change culture and couldn’t adapt fast enough. Some five years ago they were even investing and developing a huge processing plant in China and my friend was out there helping establish it. Would they have been wiser spending that money in setting up an Instagram photo sharing  service?

Today we can see many industrial giants who are stumbling. We assume that they will always be there but they often will not. Some may be relatively new such as RIM Blackberry, others older and more diverse such as Sony and others such as the Royal Mail just hanging in there. Rarely does disruptive change right itself without a reactive action and even sometimes the reaction taken can itself can bring down the house of cards.

The question within the publishing trade is not so much about the digital change that is now sweeping through the market,  but on who the winners and survivours  will be. In some cases that is about companies , in others it is about removing, or significantly changing, established links in the value chain.

We have seen a significant consolidation in the distribution and consumer facing digital market space with new entrants dominating over traditional players. Will this and the inevitable shrinking of the traditional channel lead to large casualties or will they merely all shrink in a uniform manner? Some would suggest casualties are inevitable as survivours via for economies of scale and scope and the further investment that is required just to remain in the race.

We are seeing everybody trying to take on other roles as an extension of their own. Authors are increasingly looking to become self sufficient and that movement itself may not mean that everyone has to self publish, but it does lead to a questioning of  that the relationship authors have with others. Do authors still need the same agent relationship when the prize may be not so much in securing the best advance and publishing deal as much as establishing and managing the brand. After all musicians now need a different style of management than they did say 30 years ago.

We see printers having to offer more service than a bound book. Some would suggest  that  they should have been the people who grabbed the digital conversion and composition business by the throat, but like Kodak they all too often thought that there would always be the same demand for their traditional services. They al too often saw themselves in the production and not the content business.

Booksellers are wakening up to the reality that it says ‘books’ over the door and not ‘new books only’ and this means a change to what they buy, where they by , how they merchandise their consumer offer and relationship. Sale or return may become a weight around the necks of those who cling to it instead of adapting.

Finally, we have the role or roles of the publisher which will differ by sector but will change. We have seen the move from an editorial to a sales driven business, from mass marketing towards direct marketing and much more. The challenge here maybe, in how we introduce uniform practice and processes and tighter control to gain greater cost efficiency, whilst continuing to harness  that creativity and individual focus that adds real value.

Richard Charkin recently said that publishers need to work and think as start-ups. This may be a hairy prospect for some and will not suit all. What is certain is that everyone needs to get the basics right, constantly understand what is happening, not just around them, but across the total market space and be prepared to experiment and react swiftly to change.

The only thing that is certain is that there is no groundhog day and tomorrow will be different from today.

That Was The Week That Was: Apple, Kodak and a Blackout

So what was the biggest news story this week? The filing for Bankruptcy of that previously leading technology giant Kodak, the Presidential launch and hype of Apple’s grab for textbooks and to create an exclusive iWorld or the darkness created by the likes of Wikipedia and others and resultant climb-down of US legislators to their ill conceived SOPA and PIPA bills?

Kodak clearly teaches us that no one is immune to disruptive change and the emergence of digital technology and integrated video and photography in every smartphone simple by passed them. It is a very real lesson and one we should rank alongside many others who failed to adapt. In any value chain we all have to add value to survive.

The Apple launch will have significant repercussions far wider than the intended textbook market. Apple has not thrown a people into the pond but a whacking great bolder, that forces us to question much of what we do between author and reader. The one thing that is certain is that it will change not only what we do but how we do it and what we trade moving forward. Apple is not the winner merely the one to throw the first stone.

So what about the lights that went out over the Internet and the ensuing recreation of what, would have been bad law. This was a relatively quiet but significant revolution. Backed largely by big media and content producers such as the movie studios, record labels it is seen by them as their way to control and fight piracy and by many others as going too far the bills would have gone too far and with the capacity to created a nightmare.

The Stop Online Piracy Act (SOPA) was going to be bad law and along with its Senate cousin, the Protect IP Act,(PIPA) have galvanised protests across a very wide spectrum of companies and have been controversial from the beginning. Site such as Wikipedia and Reddit switched themselves of in protest. The object was to demonstrate what could easily happen under these ill conceived laws.

Under SOPA, a rights holder can take steps to shut that site off from search engines, ad networks, even Internet service providers and basically starve the offending site out of existence.

But critics see as being to easy to close down a supposedly offending site by just writing a strongly worded letter and would give legitimate sites a huge new set of legal obligations. Like a 21st century McCarthy witch hunt on the Internet.

On Wednesday U.S. lawmakers' websites were inundated with messages and Google delivered a 4-million-name petition against SOPA and even before the switch off, President Obama declared that he didn’t support SOPA. The silent majority stood up.

Is it the end, or will those experienced political wranglers and lobbyist divert their money to try and make some minor changes and push this bad law through?

This certainly was the week that was!