Book Printing Outlook: Trade, Higher Ed Better

IT IS fascinating to note what market influence the recession has visited on the book market, beyond the tempering of consumer confidence. The 2009 campaign's slump has not only impacted how much we read, but what we read. But even in an atmosphere of printing platform right sizing and other business-related reconciliation, it is difficult to take any view but an optimistic one of the past year and the coming fortunes in 2010.

Some of North America's largest book manufacturers have instituted programs, installed equipment and forged partnerships with technology providers in an effort to stay several steps ahead of the needs of their clients, despite downward pressure on capex funds. These efforts seemed to have cushioned what could have been a truly atrocious 2009.

RR Donnelley of Chicago uses its domestic and Asian platforms to play ball in the trade and education sectors. According to Ed Lane, president of Book & Directory, the company enjoyed a solid performance in the trade realm. While Harry and his wizard friends didn't drive the trade sector's growth this year, the Windy City printer enjoyed work from the wave of vampires and werewolves that have caught the public's attention.

Needs Are Being Met

"We saw publishers requiring capabilities that coincided with our platform's strengths," Lane notes. "For example, inventory management is playing a greater role in helping to contain costs. The ability to respond quickly when titles take off, and the flexibility to use an international production resource in order to optimize cycle times and costs, are especially at a premium."

Lane feels the biggest book segment victim of the 2009 economy was the elementary-high school (el-hi) sector, with state budget shortfalls either delaying or eliminating adoptions. Increasing college enrollment enabled the overall higher education sector to enjoy growth, while the general economic doldrums retarded the growth rate of Asian production for RR Donnelley.

A range of one- and four-color digital solutions buoyed the printer's conventional offerings and allowed it to offer customers the ability to produce quantities from one to a million units as publishers sought to improve their turnaround times and reduce inventories. Included in these initiatives was the exclusive agreement with Muller Martini to create the first high-speed, in-line ink-jet printing and book binding system. RR Donnelley will take delivery of the first six integrated systems in the United States in 2010 and 2011, according to Lane.

"We believe that innovative technology such as this will deliver the potential for game-changing advantages for our customers, as well as for our cost, scheduling, production and quality dynamics," he says. "We've developed these innovations in response to publishers' demands for better inventory management, for ways to help mine value out of backlists, and for one-stop capabilities to produce and manage both short- and long-run volumes."

Courier Corp., of North Chelmsford, MA, also competes in the education and trade markets, along with religion. Like Donnelley, Courier enjoyed a strong effort in higher education, buoyed by a wave of people going back to school, notes Peter Tobin, vice president. Four-color textbook demand kept the presses humming at Courier's Kendallville, IN, plant. Textbook purchasing deferrals brought about by lackluster tax resources, however, have stymied the el-hi sector.

On the plus side, Tobin says the company has enjoyed nice growth in a number of areas on the trade front—traditional book staples such as cooking, crafts, gardening and business asserted themselves once more in 2009. The religious segment, which relies in part on charitable contributions from its membership, has seen its resources shrink; predominantly a function of the economy as opposed to a fundamental shift.

"We've been fortunate to bring in some new customers in the trade area this year," Tobin notes. "We actually did pretty well in trade with a mixture of the types of books we produce, and the new customers we were able to bring on board."

Courier has also positioned itself for positive growth in 2010 backed by a partnership with Hewlett-Packard to adapt its new HP T300 color ink-jet web press technology to the book market. Third-party technology providers will supply collating, folding and book block-building equipment and in-line binding for the manufacture of high-end one-, two- and four-color digital books in a broad range of run lengths. Courier will test the production line on its own publishing companies, particularly Dover Publications.

Courier was one of the first companies on board with the digital revolution back in 1993, when it invested in five networked Xerox DocuTechs. The T300 solution will allow the printer to address the needs of four-color, trade and textbook production in run lengths below the traditional offset threshold of 1,000.

"Until this equipment became available, unit costs were pretty high for a digitally produced four-color book in a run of 700 to 800 books," Tobin points out. "This will allow us to build a really nice business and to meet a need among higher ed publishers, as well as trade and el-hi publishers."

The name may be slightly different, but little has changed in the grand scheme for Worldcolor (nee Quebecor World) as it continues to seek out ways to differentiate itself among book printers. According to Kevin Clarke, president of Publishing Services, 2009 was a tale of two campaigns; the first, an ultra-conservative reaction to the economy, with a solid finish in the second half of the year buoyed by some big titles fueling the trade arena.

Worldcolor's educational fortunes mirrored their contemporaries; tempered adoptions at the el-hi level, but encouraging enrollment levels for higher education. Bibles, manufactured in the company's Bogota, Columbia, facility, were up significantly. Religious trade, led by significant growth in the self-help/inspirational/spiritual titles, proved to be another strong suit for Worldcolor.

Sean Twomey, executive vice president of market development, notes the company took a three-pronged approach toward the focus on publisher needs when it developed the Publishing Services Group. They are:

• Speed to market, with turnarounds in as little as 24 hours. Instant books have become popular, particularly when celebrities die.

• Digital solutions that complement the offset platform. Worldcolor has enhanced its Web-enabled interface to make it easier for publishers to manage inventory.

• A new e-publishing suite of services aimed at repurposing existing content. It recently announced a partnership with Mark Logic to create the Worldcolor Custom Publishing Engine. This allows publishers to repurpose existing content into new, targeted publications.

Heading into 2010, Clarke expects to see consolidation on the publisher end, which could represent more of an opportunity than a threat for Worldcolor. "There will be consolidation in all of our markets. We're seeing that now on the lower end," he says. "It will have downstream effects on other parts of our business.

"But we're positioned to take advantage when that happens."PI

Top 5

Book Printers*

Segment Sales Total Sales Rank Company (millions) (millions)

1 Worldcolor $482 $4,017
 Montreal

2 Courier Corp. $280 $280
 N. Chelmsford, MA

3 arvato AG $266 $321
 New York

4 Taylor Publishing $113 $113
 Dallas

5 Walsworth 
 Publishing $98 $115
 Marceline, MO

*Sales figures are based on above printers' self-reported total and market segment breakdowns.

RR Donnelley likely would have appeared on this list, but does not divulge a breakdown of its segment sales.