According to Wikipedia, Lightning Source, the biggest print-on-demand press, "has printed over 41 million books for over five thousand publishers." An essential component of POD publishing is no returns. LS doesn't print the book until it's ordered.

Like the increasingly all-digital music industry, POD technology is changing the tradition publishing business model. HarperCollins recently announced a new book imprint that "won't accept returns from retailers and will pay little or no advances to authors."

If publishers "won't accept returns from retailers and will pay little or no advances to authors," then what, Roger Simon asks, "What's the point of the publisher?" Answering his own question, he muses:

Well, there's editing (which one can get elsewhere) and the fancy publishing house imprimatur, maybe a little help with production and publicity (again available elsewhere—many authors pay for their own publicists anyway).

Simon, an established writer, is being a bit too glib. A publisher that pays no advances but offer the same traditional editorial services is giving the author a huge advance in goods and services. Small publishers stay in business by paying themselves a fraction of what their labor is worth on the open market.

Even if your manuscript has "bestseller" written all over it, copyediting and proofreading are time-consuming and labor-intensive tasks. Add to that layout, typesetting and cover design. Not to mention publicity. Publishers aren't going away any time soon.

This makes the "no returns" policy more important in changing the business model. Dumping a lot of product in one quarter with the explicit expectation that much of it will be returned the next is generally considered accounting gimmickry or cooking the books—unless you're selling books.

A few months ago at a local writer's conference, a Utah publisher described the classic book distribution model as something akin to Click & Clack's "Car Talk Capital Depreciation Fund," which guarantees a "50 percent return of a person's investment."

Meaning that a year later you'd get half out of what you put in. In other words, ship off a thousand books, get half of those back, half of which have been damaged and have to be shredded, send the remaining books out, get half of them back, etc.

A year later, your inventory of a thousand books has been reduced to a few hundred sales. However, making bookstores purchase stocks of non-returnable books would be equally ruinous. Forcing retailers to warehouse and remainder product is the same shell game turned upside down.

Publishers used to have to guess at the expected demand for a book and then ship the pallets in big trucks to their distributors, who then delivered them to the bookstores. Inventory control software combined with POD should make this a thing of the past.

What if you went into a bookstore and there were Kindles everywhere (attached to sturdy chains) on which you could review any book in the inventory? And every bookstore had its own POD press?

This is what I sense Amazon is getting at with BookSurge. Though its decision to prefer BookSurge books over LS—and not to treat LS books as POD—can't but appear predatory in nature. And could cripple the business model in its infancy.

The other big hurdle that remains is the relatively high unit cost of POD book (an almost 100 percent markup) when compared to offset runs in the thousands.

But just as the CD replication costs have dropped to a small fraction of the retail price, even for short runs, I see POD costs falling as well. Kodak's new continuous-feed inkjet digital presses promise to be cost-competitive with full-color offset.

One thing I've noticed buying books in Japan—where most media costs significantly more than in the U.S., especially CDs and DVDs—is that mass market paperbacks are usually cheaper, despite Japan's notoriously inefficient retail sector.

Japanese publishers are probably doing a lot of outsourcing to China and printing shorter runs. But in any case, there's still some give left in the dead tree business.

Labels: publishing