Ever since Gutenberg invented the printing press in 1440, books have been a staple product in the arsenal of commercial printers the world over. Australians consumed books by the millions every year and many of them were printed locally – either by home-grown authors like Colleen McCullough, David Mallouf, Thomas Kenealey and Tim Winton, or reprints of overseas titles.
But as with many long run print products, high production costs sent publishers running for Asia from the 1990s onwards. Then the popularisation of the e-book and online ordering from Amazon in the past decade saw the collapse of Borders and Angus & Robertson in 2011, and had some predicting bricks and mortar bookstores and paper books would be gone by 2016.
More recent trends, however, have turned this narrative on its head and printed books are making a comeback, both in sales and Australian print volumes. Local sales figures are lower than five years ago but rose two per cent to $937m last year, with bookstores reporting some of their best Christmas sales ever, and new independent bookstores popping up around the country. At the same time, e-book sales – which in 2011 were forecast to grow 70 per cent a year – appear to have plateaued as consumers return to the format they grew up reading.
Australia’s biggest book printers are already noticing, with Peter George, chief executive of the country’s biggest book printer PMP, saying: “People are going back to the printed book, digital book reading platforms have peaked and worldwide books sales have increased in the past two years.”
The trend is being driven the hardest by the demographics you would least expect to opt for the printed page over a computer or tablet screen. The first is children’s books, which have been doing really well in Australia with printed sales at Dymocks up 30 per cent sales since 2010, up 14 per cent in 2014 alone. Sarah Hatton, publicity manager at major children’s book publisher Scholastic, says it is driven by the runaway success of the Harry Potter series. “No one used to pay attention to kids books but Harry Potter became such a craze that publishers realised they have to be taken seriously, because they are big money,” she says. “Book festivals are finally backing children’s books like never before.”
The biggest growth is in young adult novels, up a staggering 43 per cent in 2014, from top-selling authors like Any Griffith, which are mostly printed onshore by Opus subsidiary McPhersons – unlike colour picture books which are still produced offshore. Hatton says parents prefer to give their children printed books and that while Scholastic has e-book versions the print versions overwhelmingly sell better. “Kids like fiction series and parents see buying a book as something worthwhile unlike buying them lollies or games,” she says. As a wider trend, Hatton says after the initial rush to buy e-readers those who want them have them and some have then decided they like print better.
Another surprise is the popularity of printed books among Generation Y, a demographic known more for its tech savvy than a love of books. International research shows those aged 18 to 29 are the biggest print readers and still use public libraries in large numbers, and a University of Washington study found that a quarter of students still buy print versions of e-textbooks that they are given for free. Last year 87 per cent of student textbooks were print versions despite most being available in electronic form with the average student spending $320 for five of them.
In her book on the reading preferences of US university students, linguist Naomi Baron says students told her printed books are easier to read than digital versions and they absorb more information from a page than a screen and have better recollection of it. She says only 16 per cent of people read web pages word-by-word and 90 per cent of the students she surveyed multitasked while reading a screen compared to just one per cent in print. The cut through of printed books with a generation living increasingly digital lives squares with research into the power of direct mail and catalogues to command more attention by bypassing the digital saturation of modern life.
Sales will be further buoyed this year by the adult colouring book craze that has gripped the world in the past six months. Costing as much as $30, they feature complicated patterns or pictures with an infinite variety of themes and are touted as an effective relaxation therapy. Half the books on the Australian bestseller list are adult colouring books and big business has even started handing them out to staff. Usually colour books like cookbooks and children’s picture books are printed offshore, but magazine publishers like Bauer and Pacific are rapidly getting in on the action with $10 tie in books, giving Australian printers like Hannanprint, PMP and Blue Star Web big opportunities. The new high-margin work does not look like drying up any time soon and even when the craze subsides analysts predict the market will remain strong enough to be a significant source of revenue of publishers and their printers.
Perhaps more significant for Australian printers is the increasing on-shoring of work back to Australia from Asia, with its lower production costs, and the UK where big publishers print titles in bulk locally and export around the world. The falling Australian dollar is contributing, but the main cause is a shift to on-demand book printing by publishers seeking to save on warehouse space and be more flexible in responding to sales trends. Smaller runs changes the economics of offshore printing with lead time, freight costs, reprints from mistakes, and lost sales opportunity from not being on shelves on time creating an opening for Australian printers.
George says much of PMP’s future revenue growth will be driven by book printing coming back to Australia, and that the development of fast, high-quality digital printing equipment has driven publisher decision making as an on-demand strategy far more difficult with offset. “In the old days you would get a publisher say go print 50,000 copies and they would sit in a warehouse somewhere until Angus & Robertson rung up and said ‘send me 100 of those’,’ he says.
“The average order size now is about 100 and as low as 10, and that makes it uneconomical to print them in Asia and ship them over. Digital print technology has made this process economical enough to facilitate the shift in business model.
“I think we will see this trend continue and the whole industry will benefit from it and the recent increased sales of books.”
Financial impacts at the country’s biggest book printers PMP and Opus is readily apparent. Griffin Press, the book printing operation of PMP, was the standout in the company’s 2015 annual report, with sales up 13 per cent. Over at Opus, revenue from its publishing services division grew two per cent.
Opus chief executive Cliff Brigstocke saying the company has won several contracts to print for clients that had previously used overseas suppliers, and he says it is doing more work for existing clients that sourced some print offshore.He says consumers are moving back towards printed books, in part because as tangible goods they are fantastic gifts, unlike e-books.
This is also driving a resurgence in hardcover books which are easy to wrap and better presented to for the recipient. They are often embellished, which is yet another reason to utilise local production.
The two big guns are investing heavily in digital printers to capitalise on the new reality. Opus has installed Fuji Xerox 1400 20-inch and an HP T410 high-speed inkjet printers and is planning to spend some of the $3.9m earmarked for upgrades this year on more to keep it well-positioned in the rebounding market. “The trend of shorter runs, printed more frequently and ordered later continues to develop rapidly. We are well placed for print on demand, or just in time, which is clearly the future for our industry,” Brigstocke says. “We are making it easier to print locally with turnaround at attractive prices. Our equipment investments are aimed at helping our clients improve their speed to market.” PMP is also on the digital buying trail, with the high volume inkjet webs HP T260 and T350 installed at Griffin Press alongside its offset hardware, and a Fuji Xerox 288 for really short runs. George says this investment will continue and over time PMP’s book operations will use more digital.
Books, outdoor buck print falls
Print’s share of ad dollars will be slashed in the next five years as digital takes over, with only books and outdoor weathering the storm, analysts predict.
The latest PricewaterhouseCoopers Australian Entertainment and Media Outlook projects the internet will make up 51 per cent of the ad market by 2019, with huge falls for newspapers and magazines.
It says newspaper revenue will be slashed 23.8 per cent from $1.93bn to $1.47bn, with circulation and ad sales both halving from $1.218bn to $612m and $1.66bn to $833m respectively.
Newspaper ad revenue is down from $2.8bn in 2010 to $1.7bn in 2014.
The outlook for magazines is less gloomy, falling 8.7 per cent from $503m to $461m, with PwC saying digital will make up for print circulation declines – but not ad sales.
Newspaper share of ad dollars will plummet from 13 per cent to five per cent while magazines will halve from its present four per cent.
Books are expected to buck the trend, growing from $1.97bn to $2.16bn and while e-books will continue their growth they will only reach 20 per cent of sales and print will remain the ‘dominant’ format.
Out-of-home is tipped to continue its record growth, but not to the $1bn predicted by Outdoor Media Association chief executive Charmaine Moldrich – up 14.7 per cent from $746m to $856m.
OMA figures have the revenue at about $600m – but that only includes its members, not the entire market.
However, digital will continue to encroach on print’s revenue with sales from printed panels will fall from $609m to $560m, while digital panels grow from $101m to $296m.
PwC says government regulation will lead to ‘very few’ new billboards so the revenue movement is likely to come from converting billboards – as the big players are already doing.
The report says media spending in Australia will grow 4.8 per cent to about $16bn, with the internet making up more than half of that at $8.2bn.
Keeping publishing inhouse
While the big end of town gains work from major publishers, small family printer InHouse Print & Design is making its own book boom by becoming a hub for self-publishing. In March 2014 the company launched InHouse Publishing – its own indie publishing house that can take a fledgling author from their first manuscript to a bookstore shelf. It now has four staff led by 16-year publishing veteran Ocean Reeve, and has now published 350 authors, and is worth $500,000 without even counting the printing. The authors include Lindsay Chamberlain, and Reeve is in negotiations to bring William Shatner’s self-help book Catch Me Up to Australia, after saving the e-book version from a formatting disaster. Reeve says he regularly works 13 hours a day as business is booming. So far about 100 authors have sold more than 500 copies and some have sold more than 2000.
Short-run book printing has long been the Brisbane firm’s biggest market, worth 40 per cent of the company’s print revenue. It has multiple Ricoh digital production printers churning out ten new titles a week with average runs of 200-300 and up to 3000. The printers include a new Pro C7100 bought earlier this year and was soon to be joined by Australia’s first Pro C9100. But printing is only one part of the process from when an author gets a cracking idea to when it entertains a reader sitting in the sun flipping the pages. “You don’t have as much control over the process, and there is always a lot of drama communicating between the author and the publisher,” InHouse general manager Nevada Matthews says. “Our success is built on going the extra mile for clients and if someone else messes something up we can’t deliver.”
Matthews says part of the appeal for its clients, like a lot of first-time authors and religious groups, is they do not want to be taken advantage of by big publishing companies and want to keep the rights to their work and see meaningful returns. “We always liked the idea of self-published books because it keeps the rights in the author’s name,” he says. “This is a way of doing that while helping them distribute to a wider audience.” Like the rest of InHouse, the business has grown almost entirely from word of mouth as clients see results and tell their friends. “Clients trust us to advise them because we have built relationships on honesty and telling them how it is,” Matthews says. “We are the most passionate about this part of our business because it such a deep and real thing and so important to the people who come to us and entrust us with their work.”
Reeves says the team will first do an appraisal of the manuscript to assess its quality and then either send it back for rewriting or move it to editing and proofreading. InHouse will then design the cover and format the book to a standard you would expect to see in a library or bookshop, and send it to printing for a proof copy. “That is when the author gets to physically see their baby in their hands. It is a pretty big moment that many are not prepared for,” he says. Reeves will work with them to set retail price, work out a target audience, and a strategy to make their money back in the first print run. The books are mainly sold to libraries and independent bookshops, but on the morning ProPrint visited he was in negotiations to distributed through QBD bookshops, and has just closed a deal to sell to all libraries in New Zealand. Like the direction Opus and PMP are heading in, everything is done print on demand, instead of on consignment, so books are not sent back, unless damaged, if they are not sold. “Most self-publishing services leave authors on their own for marketing, but we don’t,” he says. “We need the authors to be selling with confidence because that is how everyone makes money.”
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