Book Printing Industry Recap 2004

2004 was a mediocre year for book printers—though not all printers fared badly. The sales and performance measures of the various printers show the divisions that are developing in the book printing trade. It is clear that the digital, short-run printers are the ones that are succeeding.

In trade book printing, for instance, a lot of printing has been driven by a small number of big books, while backlist printing is down. This hurt the large book printers. The four-color children’s business and, to some extent, the low-end and high-end Bible business continue to be affected by the ongoing exodus to Asia. With time to market being the first priority on many jobs, however, Asia is not always the solution for four-color work. See the March 11 posting for the opportunity in four-color children’s book printing.

Much of the printing in 2004 came at the cost of reduced margins. While pricing pressures have been significant in the past, 2004 margin pressure was tighter as little sales growth in publishing plus overcapacity in the manufacturing sector made a very tough market.

The various book printing companies posted varied results for 2004. Arvato, Bertlesman’s book printing division, had a good year in the Offset Paperback Manufacturing and Berryville Graphics divisions, according to Randy Xenakis, executive vice-president of sales and marketing. Banta Book Group generated approximately $400 million in sales, with segments split almost evenly between educational, trade and catalog printing. A smaller segment, about 10%-12% comes from the tech business, according to Bob Kreider, president of the book group. For the most part, though, sales for the traditional, large book printers were flat to declining.

What is noteworthy, however, is digital printing Edwards Brothers president, John Edwards, said the Digital Book Center is the company’s fastest growing area. It gets a lot of attention both for its present business models and its future promise. Currently, the Digital Book Center is running three models for ultra-short-run printing: print to order; print to a minimum quantity; and print to order and ship directly to the customer. Mr. Edwards said nothing about their traditional book printing business, however.

Lightning Source president, Kirby Best, declared 2004 “spectacular.” Lightning Source has printed more than 14 million books since its launch, with an average print run of one to eight copies. Lightning’s record for a single day’s production is 41,000 books that was achieved in 2004. Typically, however, the average daily book production is up to 25,000. Lightning Source offers three different business models to its customers. In the distribution model, all orders are routed to Lightning, which prints and ships directly to the customer. Lightning then sends the publishers a check. In the drop-ship model, Lightning prints and ships according to the publisher’s instructions. The third is a short-run model, in which Lightning prints and ships the books to the publisher’s warehouse.

What does 2004 say about the book printing industry? Print runs are down which hurts large book printers. Margins are tighter which also hurts the large printers who have invested heavily in expensive press and bindery equipment. Work is fleeing to Asia in some categories of book printing. This kills those US printers competing in those categories such as children’s books and Bibles. Finally, digital printing is on the rise. Edwards Brothers, a large, “traditional” book printer has a thriving digital printing division. And Lightning Source continues to grow and prosper.

The market is shifting towards short-run, digitally printed books. The “traditional” book printers cannot or will not move quickly enough to capture the market. Upstarts, such as Edwards Brothers’ Digital Book Center and Lightning Source, are capturing some of the market, but there is more market to left to capture. Printers that move quickly enough will capture that market share. Those that do not will consolidate or disappear.