For some years now we have been automating the process of pre-press (and now pre-media) to make it super efficient -some opted for outsourcing whilst others opted for setting up business units in far away lands where the cost of labour is really cheap, unfortunately it’s a far cry from Sean’s beach photo in the Hot At Vyre post and more like mine here.
The focus moved onto improving the process within the manufacturing facilities to ensure that the capacity could be managed with fewer staff and thus allow the company to remain competitive on price. More and more technology was deployed to allow greater savings on the actual cost of production ensuring that the quality of the separations that are going to plate providing a good amount of ink optimization (previously done at repro stage) that provided an equally as good cost saving on ink, but never at the expenses of the quality of the final product.
As the business requirements change for all types of printed materials, with marketing now requiring their campaigns to target audiences that no longer want the nuisance of paper, and with the need for packaging to be sustainable, we see new business models emerging into market verticles that were traditionally bulk print channels. To add to this, there is a growing trend in personalization; this without fail requires a minimum order quantity of one!
So lets take a snapshot of a few markets that have been affected over the last 5 years by the decline of the bulk order.
Books & the raise of self publishing
There was once a time when publishers would sign an author against an estimated volume of sales and pay the author an advance before he/she had even written a word. Today it’s possible for anyone to write his or her own book and publish it with ease using everyday sites like Amazon, Barnes & Nobel and Lulu. How is the possible? In the complex world of book publishing, companies like Lightning Source or The Book Printing Company provide retailers the ability to order minimum quantities, even Ingram the largest US distributor of books will carry stock of POD items to ensure they can supply the stores the required quantity on demand.
The ability to Print On Demand for the book industry opened a new business model that wasn’t based on the traditional need to warehouse, ship and return unsold of books, the cost of the actual print was, although higher than the bulk as an immediate cost, it actually would take a run of around 750 copies to get the offset printing cost per book down to the print-on-demand cost. Here’s where the print-on-demand and traditional publishing models diverge. There never are “large quantities” involved with POD, there are never books to warehouse or cash to tie up in inventory. Even more important for a small publisher using a service such as Lightning Source or The Book Printing Company, there is no shipping cost for books sold into the distribution channels.
One company is working on bringing print on demand to the out of print book market, KirtasBooks.com has a collect of 235,000 books, all pre-1923 and plan to more than double that in the coming weeks, what’s more their innovative scanning methods and the use of the Cooliris technology allows them to provide a free online viewing, but not stopping there they also have an Invest In Knowledge program that allows you to subsidize the cost of digitizing the book in return for 5% of the future books takings. Content providers can partner with KirtasBooks and provide their MARC records to make them instantly available for sale, the books are then digitized on demand as well!
The decline of music sales
Ok so moving from the printed word to the vibrating sound waves of music, I won’t cover the raise and fall of the music industry, Steve Knopper did a well enough job of that in his book Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age But the rollercoster ride that saw the music industry change from the large format vinyl printed on stiff board and cassette inlays with double sided 18 folded paper, into the era of the CD then onto the digital download has had a massive impact on the pre-media industry. Once an industry of double time overtime and over night “must have” campaigns followed by print runs into the 100’s of thousands, now we see that the distuptive force of the internet and the raise of broadband speed access as all but removed the quantity order. It hasn’t completely removed the requirement for the printed copy that people can buy instore or online, but the sales of this format are in a decline and new business models need to be found inorder for the music companies to maintain this retail channel, no longer can they afford to print and replicate 100’s of thousands of copies to sit in warehouses or on shop shelfs unsold, even worse to be returned to the distributors when the shop needs the shelf space for stock rotation. Lower cost options need to happen and Print On Demand for lower quantities with no wastage and less material costs.
We all read that magazine readership is down, and publishers are producing less magazines and sure we have seen some of our favorites disappear, but has the consumer actually been affected by at least 2 forces? Firstly the amount of choice the readers have, you only need to walk into a newsagents and look at the amount of women’s gossip magazines there are to see that there is an abundance of choice, the second is manufacturing and distribution costs.
You would think that as the years have gone by the the cost of producing the printed matter has been reduced, and for sure it has been, pre-media automation, manufacturing automation, digital photograpghy etc etc the list will go on for ever, but the cost of distribution and the fight for shelf space is leading publishers to take a look at new output streams, still produced by the traditional pre-media suppliers and still printed, just in smaller quantities and also provided in the new form of a digital magazine. Yesterday I was flicking through one of our industry magazines…. online! No printed matter what so ever, yet I can assure you it is still printed and sent if it’s subscribers.
Another example of how the printed pages are also available online is with Ceros, with over 100 titles available in a slick digital viewing format. It has the ability to add interactivity and moving adverts into what seems like the same as the static content you would get from a printed copy. One of my favourites that isn’t available in printed form is IGizmo, yes not available in printed form and yes it’s free!
These new output streams are undoubtedly distrupting the printed versions reducing the order quantities, but new models for distribution to reach the reader base need to be explored, it’s not that people are anti printed material, but they want the convience to get it when and where they want, why is it that subscription prices are so much lower that the shop shelf price…. and maybe it could fit into my vision of a possible future of news print…..
Distribution of home entertainment
As with the music industry, the home entertainment has also been through the mill with a number of format wars over the past decade, when DVD burst onto the scene and the cost of the consumer home units reached prices that the masses could afford, so the demand for DVD rocketed. Sales were through the roof as consumers were happy to pay a premium for films they owned and watched on their ropey VHS player, people proceeded to replenish their collections with the pristine picture quality of DVD. Then the slump hit, stocks piled up around the globe and reorders slowed down; the replicators begun to suffer and some had to shut up shop….. along comes another format war to disrupt both consumer and manufacturing, the Bluray – HD-DVD formats paved the way to wastage on an astronomical scale that again (remeber the DAT tape or the minidisc that consumers invested in only to slip away un-noticed) hit the consumers who backed HD-DVD, who would have known which way it would go, and people were holding onto their pennies to be safe, thus neither format was moving in any sort of quantity….. Was it the inclusion of Bluray into the PS3 that tipped the scales, or was it the sheer power of the studio’s that backed the format?
With a new format, a decline in sales of the old format, new manufacturing models and a reduction of orders a new business model needs to be formulated to move away from the 1000 unit order and move towards smaller minimum quantities…. The studios need to move away from the old paradigm of manufacturing and into an ondemad one to reduce the cost of production.
In just 4 examples of consumer facing products that have been disrrupted by the changing times, all have had an impact on the pre-media and print world of manufacturing we see the need for new business models to handle the changing distribution requirements that fill now just one of the consumer engagement output stream. Print On Demand has never been so relevant to reduce the manufacturing costs and allow smaller order quantities. The increase of personlization will fuel a new wave of consumer driven products and manufacturers are able to make the most of todays technology. Those that struggle to move forward wont’ be left behind, but will suffer from a decline in their consumer support and awareness.
Author: Gary George
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