This is a transcript of talking points from "On the Same Page," a webcast by VoiceAmerica.com on January 20, 2004. Host Maxine Thompson interviewed Danny O. Snow about new publishing technologies, including Print-on-Demand, Dan Poynter's "New Book Model," e-Books, and the future of publishing. This is not a verbatim transcript of the broadcast, but rather a previously prepared summary of each point covered. Sound bytes from the actual webcast may be available at www.voiceamerica.com on request.

"Print-on-demand" is a new technology that makes it possible to manufacture real books in quantities as small as one at a time, as ordered by readers. The underlying concept of POD isn't new. Retail giants like Walmart have successfully used "Just-in-Time" (JIT) delivery methods for years, to move inventory from warehouses to stores in exact proportion to sales, eliminating costly overstocks of unsold goods. POD simply takes the JIT concept to the next level: both manufacturing AND delivering the product in a matter of days. But it's essentially the same no-waste strategy. And that's a good thing: reducing waste means reducing risk. Reducing risk means more opportunity, and more choices, for everyone.

Although POD was a radical new concept in the world of publishing just a couple years ago, it has matured impressively. For example, in 2003 the leading POD printer (LightningSource, Inc, www.lightningsource.com) announced the printing of its 10 millionth book, often one copy at a time, clearly demonstrating the growth of the technology.

As a POD publisher (www.unlimitedpublishing.com) my confidence in Lightning and other POD printers has grown steadily. For example, in November a small distributor ordered 50 copies of a POD title from my company on a Tuesday. LSI printed and shipped the books next day, and the entire order was delivered on Friday. When you consider that these 50 books did not exist on Tuesday and were delivered on Friday, it's really remarkable… and it's so much better than filling up a warehouse with books in the vague hope that someone will buy them!

On the downside, many bookstores still consider POD a technology dominated by vanity presses that flood the market with thousands of unedited, marginal releases that hold little, if any, real appeal to the reading public. For this reason, many booksellers are still understandably reluctant to stock, or even order, POD books. In addition, few POD publishers accept returns, while few bookstores will stock non-returnable books.

However, there are more and more exceptions every day: quality-conscious POD publishers and their printers are gaining increased confidence from booksellers, and getting more and more attention from major media, book clubs, and other players in the mainstream book industry. Meanwhile, POD printers and major distributors like Ingram and Baker & Taylor are doing a remarkable job, producing professional quality books and moving them quickly to retailers.

What's really exciting is the impact that greater acceptance of POD in the traditional book trade could bring. The 'eighties and 'nineties witnessed the demise of the so-called "mid-list" book: the book with legitimate literary merit but limited commercial potential, as opposed to mass-market books that sell millions of copies. In recent decades, major publishers have focused more and more exclusively on the next bestseller, at the expense of the mid-list title. The big houses go fishing for the next Harry Potter, and throw everything else back without a pause. As a result, I can't begin to guess how many good books went quickly out of print over the last 20 years, and it's a shame.

POD changes all that: a book that sells only a few hundred copies per year can actually make a profit. So I predict that we may see a revival of mid-list books as a result, and that's good for everyone: readers, writers and publishers.

According to Dan Poynter of Para Publishing (www.parapublishing.com), in the future few books other than sure-fire bestsellers will be initially printed in large numbers. Instead, small quantities will be produced at first, to test the market, and large quantities will not be printed until there is proven demand for them.

According to Poynter's model, you start with a digital manuscript that is prepared for both electronic distribution and traditional printing. In the guide for self-publishing that Poynter and I wrote together (www.u-publish.com) we discuss various file formats involved at various stages, but for today it's enough to say that it's increasingly possible to migrate almost seamlessly from one format to another.

The electronic version(s) can be used for advance/review copies, media coverage, sample chapters or free previews for prospective buyers, and even sold outright to a limited but growing number of e-book enthusiasts. The print version begins with only 500 copies, sometimes even fewer.

Once the book is publicly available, Poynter's model emphasizes "non-traditional" markets: outlets other than bookstores and libraries. Books can be sold directly to readers from the author's Web site, by mail, at live events, and through specialty stores whose products are somehow related to the subject of the book. For example, a book about gardening may sell much better at a tree nursery than a bookstore, because almost everyone who visits a tree nursery is interesting in gardening of some kind. Moreover, a tree nursery may pay a higher percentage of cover price than most bookstores, pay faster, and return fewer (if any) books. These are huge advantages compared to the traditional book trade, and Poynter's model shows how to tap these lucrative non-traditional markets effectively and economically.

Other books can be sold through the traditional book trade, mostly bookstores and libraries. Either way, very little if any of the original printing will go unused or unsold, which is a huge economic advantage, compared to traditional book publishing.

If public demand is good, the Poynter model also allows rapid (and economical) increases in quantity, using more traditional printing and distribution methods.

Most people (especially writers!) don't realize that 95% of books from major publishers don't even sell well enough to cover the author's advance, let alone earn a profit. Poynter's model shows how to lower costs to a bare minimum, while increasing potential sales. This makes alternative publishing much less risky; yet still allows the independent or self-publisher to realize meaningful rewards, if the book really takes off.

Monday, December 8, 2003 – Retail e-Book sales continued their strong growth into the third quarter of 2003 according to data released today by the Open e-Book Forum (www.openebook.org), the e-Book industry trade and standards organization. Cumulative units sold for the first three quarters of 2003 (Jan – Sept) have surpassed the one million mark for the first time in a single year and are up 64% over Q3 2002. Revenues reported by retailers for the third quarter of 2003 were up a solid 37% over the same period in 2002.

This is great news for e-Book enthusiasts, but let's be frank: a million books is virtually (pun intended) meaningless in the "tree-Book" world. Harry Potter alone sold a million copies within something like four hours of release.

However, there are many important areas, such as academic and reference books, where e-books already play a truly meaningful role. For example, several university presses are now starting to bring back older, out-of-print books in electronic form. Books like these may be unlikely to sell in meaningful numbers, yet they are important to scholars. Making them available as e-books is a great solution. Or think of the Oxford English Dictionary: the printed version usually costs more than a hundred dollars, but every year a few new words need to be added. Why reprint an expensive book like this, when an electronic version can be updated quickly and economically?

Another place where e-books are perfect is the library, and more and more libraries are using them every day. In 2003, the Cleveland Public Library opened the first circulating e-Book collection. Library patrons are now able to access and download books and periodicals without leaving home, without paying late fees, and without finding that something they want to read has already been checked out by another patron.

I predict that this kind of system will not be the exception, but become the norm, in the years ahead. eBookWeb (www.ebookweb.org) is a good source for news about e-Books, along with the Open e-Book Forum referenced earlier.

I always advise writers, both new and established, to watch the record and movie industries carefully. They are a few years ahead of the more conservative publishing industry in terms of technology, and the struggles faced in music and film today will impact authors and publishers in the years ahead.

For example: record labels are in serious trouble today because they ignored downloading music from the Internet until it was too late. You might conclude from this comment that e-Books pose a threat to publishers, but I don't think that's true. The problems faced by music companies are not strictly a result of downloading, per se. Bigger mistakes, like overpricing CDs and paying artists only a tiny percentage of profits, were factors that drove consumers to look the other way at piracy, and drove artists to distribute directly to the public, bypassing the record labels.

Now the major labels are trying to catch up, by offering legal downloads for 99 cents a song. I don't know how much the musician gets for each song, but it should be better than CD royalties, since there are no manufacturing costs, shipping expenses or unsold CDs involved. If music labels can convince the public to embrace legal downloads, I'll bet their revenues may even grow, by selling more units at a lower price.

We'll see the same kind of pattern emerge with movies, as broadband matures to the point where anyone can download a big file quickly and easily. If Hollywood has been paying attention to the music industry, hopefully they'll be smart enough not to rely solely on threatening consumers about piracy. Instead, they'll offer legal downloads at a reasonable price, giving consumers a tangible incentive to do the right thing.

Publishers are lucky to observe the problems in other industries beforehand, and hopefully avoid their mistakes. Personally, I see no reason why the lower cost of releasing a book (both in print and digitally) shouldn't allow publishers to charge readers less and pay writers more.

In the big picture, I see all of these developments as promising signs: the trend is toward new ways to publish books (both online and offline) with lower start-up costs, reduced waste and less economic risk. These changes are resulting in more choices for everyone (readers, writers and publishers) whether we are talking about giving more new books a chance, or bringing back older books that hold literary merit, regardless of commercial potential. Right now, self-publishing authors and smaller, entrepreneurial publishers are leading the way, but I predict we'll see more and more traditional publishers follow soon.

In addition to collaborating with Dan Poynter on the book titled U-Publish.com, Harvard graduate Danny O. Snow has been widely quoted about new publishing technologies by news media across the nation, including NPR, AP, UPI, Talk America Radio, Publishers Weekly, BookTech Magazine, Publishers Marketing Association Newsletter and others. A collection of his published articles and letters titled Steal this e-Book! was released in print and electronic form in 2002.

Snow was an early participant in the Open eBook Initiative, and served two years as a contributing editor for BookTech the Magazine for Publishers. He is now a full-time publisher with Unlimited Publishing LLC and appears as a panelist and moderator at national publishing events such as the BookTech Expos and PMA's "Publishing University."

eBookWeb

www.ebookweb.org

"A leading resource for news about electronic books and devices for reading them."

"e-Rights Update"

http://www.pma-online.org/scripts/shownews.cfm?id=556

Lightning Source, Inc.

www.lightningsource.com

"The leading POD printer."

Open eBook Forum

www.openebook.org

"International Trade and Standards Organization for the e-Book Industry."

Overdrive

www.overdrive.com

"Enterprise solutions for the digital media world."

Para Publishing

www.parapublishing.com

"The definitive resource for self-publishing."

Project Gutenberg

www.gutenberg.org

"The grandfather of e-libraries."

Steal this e-Book! By Danny O. Snow

www.u-publish.com/stealme

"A collection of articles and letters about electronic publishing that you are invited to steal … legally!"

By Dan Poynter and Danny O. Snow

www.u-publish.com