CAP Ventures Releases On-Demand Book Production Industry Report

Posted on September 29, 1999

CAP Ventures has announced the release of their newest report focusing on the On Demand Industry: Exploiting On-Demand Book Production: Opportunities, Strategies, and Practices. The publishing industry today is undergoing rapid transformation from forces inside and outside the industry. The merger and acquisition trend that has transformed many U.S. industries is also transforming the publishing industry. The high level of publishing merger & acquisition activity in the past five years has resulted in most publishing industry segments having five or fewer major players. The traditional publishing distribution channels (college and trade bookstores) are coming under pressure as new online booksellers pop-up almost weekly. According to industry research, in 1998 books of all kinds were the second most purchased item on the Internet (computer hardware was first) at over $600 Million. This figure is expected to double in 1999. The Internet itself is both a threat and an opportunity to publishers as it promises faster more efficient way for publishers to distribute content, but the Internet also allows authors and would-be authors to more easily find audiences for their works bypassing the traditional publisher channel. And increasingly, content is being distributed electronically.

CAP Ventures has been closely following this rapidly-changing market space, particularly as it relates to the opportunities these changes provide for print service providers to add book printing and related services to their offerings. The US publishing industry reached $23.0 billion is sales according to the Association of American Publisher 1998 annual statistics survey, representing an increase of 6.4% over 1997. CAP Ventures research estimates that in 1998, printers of all types shared in over $5 billion in paper, printing and binding purchases by book publishers. CAP Ventures estimates that on-demand printers captured just over $250 million of the total publishers spent on paper, printing and binding.

Over 95% of the books produced today are printed via the traditional offset process with a minimum run length of roughly 750-1,250 copies and maximum run lengths limited only by the publisher's optimism and budget. With traditional offset manufacturing processes, publishers rarely produce books in quantities lower then the 750-1,250 level because of the inherent fixed costs associated with offset.