Monday, March 09, 2009



Book publishing is going through a period of "disruptive innovation," a term popularized by Clayton Christensen in his book
The Innovator's Dilemma. A plethora of new technologies have rocked the foundations of this mature, $25 billion industry. But they are also opening up new opportunities for successful ventures.

One such opportunity can be termed "micro-publishing." We would love to say that we invented the term, but Wikipedia already has an entry on it! See:

This article will focus on a particular piece of new technology, and the opportunities that it affords to libraries, university presses, bookstores, and copy shops. The technology is the Espresso Book Machine, version 2.0, from On Demand Books (ODB).

The Espresso Book Machine

The Espresso Book Machine (EBM) is a miniaturized printing press. It combines within a footprint of 6' x 3' a high-speed printer and a color cover printer, a binder, and a trimmer. It produces a 300-page paperback book in less than five minutes—indistinguishable from a conventional paperback—and for a materials cost of under $3.00. The EBM’s “iTunes-like” software system connects the book machine to a vast network of content, both in-copyright and out, and remits all publisher royalties (public-domain titles, naturally, require no royalty payment).

An example: suppose that you have scanned, as we have, the out-of-copyright book
Caroline at College, by Lela Horn Richards. Your total cost to produce this book will be $3.08 (a penny a page for consumables, including cover), since there is no royalty due. Sell the book for $11.95 and you have quadrupled your money.

At the Penn Libraries we have formed a small team to explore entrepreneurial ideas, including the use of the EBM. This effort is supported by student researchers from the Wharton School's Sol C. Snider Entrepreneurial Research Center . Our analysis indicates that the EBM can "break even" with a relatively low output per day. If the machine "takes hold," as it has at the University of Alberta campus bookstore, it could produce a gross profit in excess of $100,000.

New Work

While printing an existing book may provide profit, the more intriguing and exciting use of the machine is to produce new work. When we spoke with Todd Anderson, director of the bookstore at the University of Alberta, he told us that they had anticipated their new EBM, which has now been in place since November 2007, with this list of possible applications:

• Cost-savings for students on textbooks and course-related materials
• Printing professor-generated books
• Doing custom reading anthologies
• Printing public domain books at low cost
• Replacing books for the library
• Printing library-generated facsimiles for courses
• Printing the bookstore's own scans

He said that
Time Magazine came out on November 2, 2007, calling the EBM the invention of the year. The local press picked up the fact that UA had an early machine and gave them lots of publicity. “We got 224 emails in the first month, and ten times that in phone calls. Everyone was interested in what the machine could do for them.”

He was surprised to find that for-profit, author-originated books have come to dominate their use of the machine. This includes works of poetry and fiction, handbooks for conferences, publication of graduate work, customized textbooks, research studies, out-of-print books where the rights have reverted to the author, and family histories. He finds that he is not competing with local printers, since 400 copies is about the break-even point between the EBM and a short print press run. So he refers authors to printers if they want more than 400, and the print shops refer smaller orders to him.

He runs the machine from 9-5, seven days a week. He has a full-time operator, a 20-year old cashier who he reassigned to the machine. She has learned the machine so well that she is creating a training manual for it. He wants to get a second machine soon.

They have developed ancillary services, at a profit. This includes proofing and editing, jacket and interior design, scanning. They charge from $40-70 per hour for these services. He says that the demand is so high for new work that he could significantly increase his per-page printing fees and still have a backlog.

Todd says they took the first three months to experiment with the EBM. "We used it as a lab." They charged 5 cents a page, and had plenty of work. They produced 2,364 books. This represented 50 different titles:

13 new works by local authors
12 textbooks
6 out-of-print books
3 books for writing courses
13 books that they were asked to scan and print
2 research papers
1 presidential address

A faculty member brought him a nursing text that had reverted to her. The original list price was $76. He was able to sell it to students for $16 and make a handy profit. They have been able to print and sell a $160 chemistry textbook to students at $37.00.

He says that they have an agreement with McGraw-Hill, using the “primus” service. This allows them to select chapters from a text, and combine and print only the ones that the professor wants for his/her class. This saves students considerable money. He expects to do the same with “My Springer.”

He said that the machine “sells itself.” He has it out in the bookstore where people can see it operate, and seeing it inspires people to think of creative ways to use it:
• One science fiction writer had 50 copies done, traveled to NYC, hit the publishing houses with his copies, and got a contract with a major publishing house.
• Printing 300 copies of advance conference papers for an academic conference held at UA.
• Printing a version of Macbeth, with professorial annotations, for use in the Professor's course.

He says “Once people get the idea, you won’t lack for business. It’s amazing what perfect binding can do for an author.” Anderson reports that authors will often ask for an initial run of 5 copies; then come back for 25 more. One new book of poetry was printed at 100 copies, then again, then again. They have now printed over 500 copies, each copy at a good margin.

We asked Todd about the potential of the Google Book Settlement--which has identified a vast corpus of out-of-print work that may have reverted to the author—to produce faculty requests to reprint their older work. “They will be coming out of the woodwork,” he said. “They will dig them out from under the bed.”

Here at Penn, we have begun discussions with faculty and departmental administrators to see if there is interest in using our micro-publishing capacity. We hope to have a 2.0 machine in place this summer. We have already turned up interest, simply based upon a brief description via email.

One promising partnership has already begun to emerge, with Knowledge@Wharton. This pioneering online business journal, launched in 1999, now has over 4,000 articles in its database. The editor, Mukul Pandya, says that he has over 100 thematic compilations in his mind, all of them suitable for production on the Espresso Book Machine. We have agreed to test the concept by producing a full-length book on the current financial crisis, drawing from K@W. This book will be edited by Pandya and Wharton professor Yoram (Jerry) Wind.

Pandya imagines that the EBM will allow the production of customized reading books for Wharton's Executive Education program, where the average class is 30 participants.

This is the beauty of micro-publishing: that you can produce a run of 30 books, completely customized for the class, and still show a profit. Indeed, micro-publishing can be economical for an audience of one: Pandya imagines the idea of putting all 4,000 articles in a database, and allowing a patron to create his or her own book, based upon articles of interest.

Micro-publishing is in its infancy. As of this writing, only 15 installations of the Espresso Book Machines have occurred (or will shortly occur), in bookstores and libraries. Four of these include the first full-production version, the EBM 2.0. Watch for a publishing revolution happening soon in a location near you!


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Ronald Clark said...
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Ronald Clark said...
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