Book Printing Outlook : An Education in Printing

If the 2014 campaign taught us anything, it's not to underestimate the value of a good education. And, from the book manufacturing point of view, the clamoring of presses could only mean one thing: Adoption cycles are back in full force.

Yes, the elementary-high school (el-hi) segment bounced back strongly in 2014 as states dug deep to invest in educational materials. The higher ed market also witnessed a strong upswing to highlight a solid, if unspectacular, year for book printers across the country.

Most segments served by Chicago-based RR Donnelley enjoyed moderate to strong performances across the board in 2014. Children's/young adult and the religious space welcomed banner performances while, in the trade segment—where e-book encroachment has leveled off—RR Donnelley noted strong title lists from many of its key customers, according to Dave McCree, senior vice president of the Book & Directory Group. The el-hi market saw a robust performance thanks to a strong adoption cycle in key markets in 2014.

While volume is always an indicator of solid performance, managing inventories and cash costs are critical to segment success. McCree says that continued focus on inventory planning and supply chain management drives winning solutions for both book printers and publishers.

"The RR Donnelley global manufacturing platform, which spans domestic offset assets, digital capabilities and overseas manufacturing options, assists in helping our customers maintain tighter controls while, at the same time, offering the ability to deliver product quickly when demand spikes," he says.

Many clients in religious, juvenile and education sectors availed themselves of RR Donnelley's Asia platform. "Publishers in each segment continue to see advantages in managing their supply chain using a more global model," McCree notes. "With the ability to take advantage of different geographies and the ability to react quickly with U.S. assets when needed, RR Donnelley continues to be well-positioned to serve our customers' needs."

The education sector was aided by RR Donnelley's flexible platform and its mix of digital, offset printing and print-on-demand assets. This enables publishers to produce multiple formats and quantities, plus allows them more effective cost management capabilities. The college space, for example, saw students' desire for e-books, rentals and integrated learning systems, which challenge the traditional text model. Donnelley's capabilities in custom publishing, digital print texts and e-book distribution through LibreDigital underscores the company's responsiveness to multiple formats.

The printer recently added four-color ProteusJet digital inkjet capacity in order to meet the growing demand from book publishers. The addition complements recent acquisitions of integrated, automated binding lines and piezo inkjet heads. And, with one-color digital demand on the rise, the printer has also expanded its toner capacity at one of its digital centers and extended its distributed print offering in multiple sites across the country.

RR Donnelley also bolstered its book fulfillment prowess, augmenting its platform across Indiana, Virginia and Wisconsin. "In combining this fulfillment business with our logistics capability, we bring our customers additional ways to improve efficiencies and move fixed costs to a variable model," McCree points out.

All indicators point to a successful 2015 for RR Donnelley and its publishing customers, as the printer focuses on assisting customers in creating, managing, delivering and optimizing content. Part of that entails calibrating production quantities with fast-changing demand. As titles take off, Donnelley can transition work from digital to conventional production, and vice versa for works that are witnessing a reduction in orders.

The 2014 campaign could be characterized as surprisingly good, given the historical projections of a steep decline in book printing that are proving to be somewhat premature, notes Ray Minturn, general manager of Special Interest Publications and Books for Sussex, WI-based Quad/Graphics. He notes the industry was tracking increases in printed book sales throughout most of the year.

"We saw a lot of strength in the children's and young adult markets, as well as in the educational markets," he says. "The printed book is showing staying power in many of the markets where the transition to e-books was supposed to be most compelling."

One of the strongest performing areas falls under the heading of "me-books," where people print one-off and personalized times. To that end, Minturn notes that the rapid evolution of digital book printing is creating new markets and ways to create and sell books.

"The combination of continuing demand for traditional books and growing demand for digital books is giving us all a chance, as book printers, to manage our businesses in a more strategic and thoughtful way, knowing that printed books have a longer shelf life than some would have forecast just a few years ago," he says.

Minturn notes that Quad/Graphics continues to invest in its book platform, particularly in digital presses and related front- and back-end systems that allow clients to more efficiently and easily get books printed and delivered how, when and where they want them.

The key to 2015 and beyond, Minturn concludes, is developing and adding all of the content solutions and services that will complement print and enable Quad/Graphics to remain relevant.

"Open, ongoing and opportunistic discussions are key to a mutually beneficial publisher and printer evolution of thinking about what's possible," Minturn observes. "We are investing in a model that will give book publishers, big and small, a full range of options to manage their book production and fulfillment in ways that will increase flexibility, quality and response times while minimizing inventory costs and better controlling overall costs."

It was also a banner year for Courier Corp. of North Chelmsford, MA. Part of the success is attributed to the fact that a considerable amount of capacity came off the market toward the latter end of 2013—particularly in the higher education sector—and spilled over into this year, providing a strong and steady offset printing load. The book specialist experienced an increase in high-speed inkjet printing and has, in turn, bolstered its capacity.

The el-hi market was brisk with business, with a sharp increase in K-12 instruction materials, and the higher ed space enjoyed similar success, notes Michael Shea, vice president of Courier. The religious market also contributed its typical level of consistency.

While the company is cognizant of the potential of digital devices increasing their roles as learning aides, their encroachment appears to be facing its share of challenges. A number of schools that instituted digital device programs have encountered growing pains due to insufficient IT and infrastructure issues.

"Recent studies show…that students who read printed books develop a greater love for reading than those who engage with digital technology at an early age," Shea says. "There's also research that illustrates the speed and depth in which students ingest content in printed form is superior to e-texts. So, we're seeing the emergence of a hybrid approach of printed and digital materials, with some content presented in printed textbook form, and other rich media and interactive content like animations, videos and assessments presented in digital form. Various content types are present in the medium where they're best suited."

Peter Conway, vice president of sales for Courier, notes that adoption cycles have been quite active across the country, with heavier spending taking place than in years past. Citing Association of American Publishers (AAP) statistics, he points out that K-12 is up 21.5 percent year-to-date through July, and higher ed is experiencing a 10.9 percent bump. The trade market, which Courier addresses at the small- to mid-range publisher level, did not provide the same splash as education.

"I was a little bit surprised by what we saw with education…surprised the el-hi market came back so strongly in the print world," Conway admits. "Most educational publishers were focusing on new content development for digital delivery. Given all the attention to digital, I'm happy that print was so robust."

Courier Corp. recently bolstered its custom publishing platform with an investment in an inkjet book manufacturing plant in Sao Paulo, Brazil. Private schools provide one of the more aggressive buying sectors as these institutions go head-to-head in competition for students. Custom publishing enables customers to brand the curriculum to a particular school.

"In the Brazilian market, customization is driving the business," adds Steve Franzino, vice president of technology at Courier Corp. "Inkjet is driving a lot of it. Digital in that marketplace…the infrastructure is not what it is here. It probably lags a good 8-10 years behind where we're at. It's primarily a printed product."

Looking ahead, Conway sees more success in the educational sectors, with respectable growth in religious and trade. One of the keys to success will be Courier's ability to fill the non-peak period of January through April. "In fact, we are providing incentives to our customers to help us level load our plants and to allow us to have more capacity in our busy fourth quarter (July to September). If we can do that, then we'll have a pretty good year." PI