Several speakers at BISG's Making Information Pay seminar last Thursday offered examples of how the growth of the Internet and technological advances in printing have opened markets for deep backlist and titles with small but steady sales--in line with Long Tail theory, discussed here on Friday. As J. Kirby Best, CEO of Lightning Source, the print on demand company owned by Ingram, put it, "Lightning is living the Long Tail now." And rather than cannibalizing the market, POD is expanding the market, he emphasized.
Started in 1997, Lightning has printed more than 27 million books "one at a time." It now has some 350,000 titles in its digital library, 12 printing "lines," 4,200 publishing partners and is manufacturing more than a million books a month. The average print run, Best said, is "1.8 copies." Some 81% of the books have retail prices between $9 and $25.99.
Publishers set the retail price and on a typical $24.95 title, after the 55% wholesale discount and printing cost of about $3.50, $7.73 is remitted to the publisher. "It's cheaper to print with Donnelly," Best acknowledged. "But then on most of these titles, the publisher would miss the sale."
Best estimated that about 720,000 books out of some 1.1 million surveyed "fit our current manufacturing capabilities." Trim size, binding type, page counts and other reasons make some titles bad fits although as technology improves, that changes. Best noted that "Harry Potter and some other titles will always be printed offset."
Traditional publishers, including Perseus, Cambridge, Wiley, HarperCollins and Simon & Schuster, make up 59% of customers, while "author services," including iUniverse, Lulu and PublishAmerica, represent 38% of users. What Best called "content aggregators" make up the other 3%, and "are getting to be quite large."
Lightning's distribution partners in the U.S. include Amazon.com, Baker & Taylor, Barnes & Noble, Holt Jackson, Matthews Medical, NACSCORP and, of course, Ingram. With Ingram, Lightning has developed what it calls the print to order (PTO) program, which solves the longtime problem of wholesaler inventory showing only a copy or two of a POD title in stock without recognizing it as a title capable of being printed quickly. Under the PTO system, Ingram shows the title in inventory in larger quantities and Lightning agrees that if an order comes in before 6 p.m., it will ship it complete to Ingram before 4:30 a.m. "It's been an exciting program, and we can see dramatic results," Best said. In 2005, PTO grew 110%.
Now that a federal appellate court has thrown out the patent suit against Lightning Source and Ingram filed by On Demand Machine Corp., Lightning Source intends to add facilities in the U.S. and abroad "where needed."
From Shelf Awareness