The problems and possibilities of POD

Big publishers like bestsellers. They have the marketing, warehousing and distribution systems in place to make money from this type of book even when retailers such as the supermarkets are allegedly demanding 65-70% discounts. Sadly for the publishers, there is a limit to the number of bestsellers that can be manufactured each year.

According to a survey conducted by the UK Arts Council, 80% of the books sold in UK bookshops were from the backlist. Book buyers do look beyond the tempting tables of special offers at the thousands of spines of backlist titles arranged along the shelves. These require a very different marketing approach. They can’t be delivered by the pallet-load from the publisher’s warehouse.

These troublesome titles that sell one copy a month in thousands of separate bookshops have led the industry to take a fresh look at the print on demand (POD) model. Corporations, driven by the demands of the balance sheet, have recognised that printing small quantities of a title can make financial sense. With the right computer ordering system POD can become ‘print to order’.

The logic behind POD is compelling. Let’s look at the sums.

The print-on-demand model:

Selling price of a book = Printing + Distribution + Margins (from which the writer gets their royalty)

The traditional print model has more steps:

Selling price of a book = Printing + Transport & Storage + Cost of capital tied up + Distribution + Margins (from which the writer gets their rather smaller share) + The cost of returns and remainders (and it is impossible to get figures, which suggests it is embarrassingly high)

If we assume for the moment that the margins and distribution costs are the same in both models, the difference in the unit printing cost has to carry all of the traditional costs. The cost of capital tied up plus two extra moves into and out of the warehouse could add 50% to the unit cost before the incalculable cost of writing off unsold stock has been added into the equation.

The unit print cost of POD compared with long-run batch printing is around 3:1 at present and is unlikely to change much, as mass-production will always provide a lower unit cost. So a POD title costs up to three times as much as a conventional title to print. The print component for a low-cost title will be around 40% of the cover price. But with a book costing £12 ($22), the POD print cost falls to 25% while the cost for the mass produced title falls to about 9%.

So POD cannot compete in the mass market or rack size paperback area, where a long print run can reduce the cost to 10-15% of the cover price. But the more expensive the cover price, the better the figures look for POD, which explains why it is now the recognised way to print academic titles selling at over £20($36).

The temptation for publishers is to print in very large batches and use the books as expensive wallpaper in shops. This works if readers can be impressed by a title’s apparent popularity – or if the book is already a bestseller - and buy books simply because they are on display. This approach is not attractive to smaller bookshops where shelf space is at a premium, which might be one reason why the smaller shops are suffering. In the wonderful small shops where enthusiastic booksellers manage to survive, every book has to compete for very limited face-out display. Most titles have to rely on spine-out display alone to capture the interest of the browser.

The printing process employed for print on demand is very similar to laser printing, so quality is not an issue. Indeed, grey images can be rendered better using dry, laser powder than traditional, wet ink. Print on demand promises other potential benefits. When printing is localised, delivery times and cost will be lower. This is particularly important in smaller and more remote markets around the world. As energy and resources become more expensive, the ability to print precisely what is required as close to the end users as possible will have economic and environmental benefits. Anybody who has tried shipping books to some parts of Africa will appreciate the problem and the potential for local printing.

At present the publishing business rations the choice of format to hardback or paperback. Digital technology could permit a book to be rendered in a font and format to suit the reader, although issues of ISBN and rights currently complicate this option. This type of printing already calls for digital distribution so titles set up for POD are well placed to exploit whatever technology emerges.

So don’t expect the world of bookselling or book production to stand still. The food retailers went through a phase of ‘stack it high and sell it cheap’ but have moved on to deliver a range of products and qualities, which is what their customers demanded. Using POD, the publishers, driven by the demands of book buyers rather then bookshops, will eventually allow more of the 750 titles published each working day in the UK to find a slot on the shelves. How long will it be before bookshops are printing their own books?

With Google Print, Amazon, readers’ groups and other sophisticated tools to help readers find the books they want to read, the marketing-led model of the big publishers is beginning to look rather old-fashioned.

Print on demand and how it can make more money for you

Read our article by Morris Rosenthal of Foner Books