E-books: 
Doom or Opportunity?

AN ANCIENT saying attributed to Chinese author, philosopher and general Sun Tzu offers great insight into the attitude the printing industry should take toward electronic readers, smart phones and iPads: Keep your friends close and your enemies closer. In other words, it pays to know your enemy (and, if necessary, put him to work for you).

Fact of the matter is, printing has been under attack almost from the moment that Johannes Gutenberg kicked off the moveable type printing era in the 15th century. Radio, television, the Internet, the George Foreman grill—all the revolutions of the past 100 years—have threatened to steal away print's market share. While each revolution has been met with an evolution of print, the current wave of electronic devices—e-readers, smart phones, tablets—threatens to provide the stiffest test yet, and harvest the greatest market share.

Still, opportunities abound for printers to leverage electronic alternatives, particularly for clients who want to have multi-channel connectivity with consumers, be it in books, magazines, advertisements or direct mail. Let's face it, consumers want what they want, when they want it and how they want it presented to them. The likelihood of a single platform being recognized as the sacred cow across any segment is doubtful. To appease the masses across numerous platforms, printers need to become adept at as many technologies as possible.

The Writing is on the Wall

In the book business, the Amazon Kindle, Barnes & Noble Nook and Sony Reader are three of the leading devices in the e-reader space—but by no means are they the only ones. About 10 percent of consumer trade book sales are digital, and certainly much of that growth can be attributed to hard-core readers who are taking advantage of another outlet to satiate their thirst for literature.

Perhaps the greater impact is seen in the offset vs. digital printing battle, with book publishers increasingly seeking shorter runs and going back on press more frequently in an effort to do away with the dreaded inventorying and waste. Digital printing enables shorter run lengths that are simply not cost-feasible with conventional printing. Converting hard copy into digital formats has become a modest revenue generator for many book manufacturers.

As for e-readers, the question is whether the rise in market share will be at the expense of hard copy, or if it represents a new sector that doesn't thrive on the demise of the printed word. Some feel the truth lies somewhere in between.

One segment of the book industry that has the potential to lose significant printing share is education, particularly in the high school and collegiate sectors. Frank Romano, professor emeritus at the Rochester Institute of Technology (RIT), notes that a number of universities are already giving out computers to incoming students, and some (including RIT) distribute course materials via PDFs and other digital formats. In fact, says Romano, every RIT class has an online component—reading materials, tests, videos—and, increasingly, the paper/book aspect is shrinking.

"For a particular course, a student might have to buy three textbooks and may only read two chapters out of each one, which I think is obscene," Romano relates. "It's entirely possible we're going to see the publishers modularize what they offer, so you can essentially buy a chapter."

Going by the E-book

The younger the student, it stands to reason, the less practical it would be to introduce an electronic device, be it a laptop, iPad or e-reader, for individual use. The cost of a lost textbook would pale in comparison to replacing an electronic device. A new iPad2 starts at $499, for example. But, considering the cost to outfit a student with books for a year's worth of classes, Romano believes it's not out of the question that subsequent, less-expensive generations of such devices could, within the next 10 years, make the electronic classroom viable.

"If you look over the horizon, at the el-hi level, the iPad or a machine like it will become the de facto textbook of the future," he predicts. "And, that's going to have a devastating effect on the textbook industry."

The process has certainly begun. The school district in Auburn, Maine, voted in early April to give 285 incoming kindergartners an iPad2 this fall—a program that will cost the district about $200,000. School superintendent Tom Morrill told the Lewiston Sun Journal that his goal is to increase literacy rates from 62 percent to 90 percent by 2012. Ten years ago, the state issued laptop computers to all seventh graders, a move that educators feel was highly successful.

Bruce Jensen, group vice president of sales for Transcontinental's Magazine, Book and Catalog Group, questions whether the electronic device is poised to be a threat, especially at the elementary grade level. He notes that, given most states' current inability to embark on printed textbook purchasing initiatives, a mass migration to digital alternatives isn't in the offing.

"We're just at the beginning of the bell curve with the technology," he says. "There are more than 50 e-book or notebook-type products out there. There will be a movement in that direction, but just how quickly it will go, and how well it works, remains to be seen."

The 800-lb. gorilla in the room, not surprisingly, is the availability of titles for any/all devices, along with the standardization of file formats. Given how quickly the iPad and other devices have exploded on the scene, these issues seem to be relatively solvable. Again, it would take a concerted effort by most states to recognize an individual platform.

The Move Toward Electronic Versions

In the magazine world, Romano notes that many publishers are prodding readers toward the electronic versions of their publications in order to reduce print runs.

"What the magazines have to do is more introspective, research-oriented, opinion-oriented materials," he says. "But even there, why do I need print?

"Over the next decade, we'll see a reduction in the size (page counts) of magazines and the number of publications in print, as more and more content goes online. It will be more gradual than in the book industry, but it will happen."

Many publishers are leaning on printers for advice as they ponder their digital futures, thus providing printers with an opportunity to furnish solutions that allow customer content to be disseminated via a number of vehicles. The smart printers are arming themselves with solutions.

Move to Hybrid Printing

Romano isn't worried about print going away, but he does caution book, publication and catalog printers to be mindful of the role that digital printing will play in these segments. Much has been written about the influence of digital printing on the book market's on-demand production trend during the past five years. But as the page counts in magazines dwindle and publishers churn out fewer copies, that segment could entertain a significant role for the digital press. He envisions magazines with offset-printed versions for long runs and digitally printed copies for personalization, as well as online content/e-magazine versions.

Visibility is important, according to Romano—peppering readers on a regular basis with multi-channel content to attract and engage them indefinitely. The same push campaign is seen in the catalog market. The great whales, such as the once-iconic Sears catalog, have given way to smaller, more targeted print pieces issued more frequently, driving buyers to go to the local store or a Web site.

Technology providers are arming printers with the right tools, Romano notes, as evidenced by the new HP T400 inkjet web press, for example. Given the 42˝ width and 600 feet per minute output parameters of such a press, he is excited at how far the bar could be raised over the next two years. With electronic devices proliferating, printers will need all the technological advantages they can muster.

"Book printers have been stuck in that market for a long time but, with new digital printing technology, they can move into new markets," Romano says. "With digital printing, a good fit is the photo book/memory book market. Digital printing is going to open up new markets for many printers."IPG