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Lightning Source And Print On Demand: 'Cost Saving Breakthrough For Publishers'

Dec 23 2013, 4:46am CST | by

Lightning Source And Print On Demand: 'Cost Saving Breakthrough For Publishers'
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“We turn fixed costs into variable costs,” explains  John Ingram, the Chairman & CEO of privately held Ingram Content Group, about what the company’s division Lightning Source  does for its customers.

In a recent interview with the CEO about his company’s print on demand (POD) division Lightning Source,  Ingram says that POD “offers publishers the opportunity to fundamentally change the nature of their business” by taking capital out of “dusty books in a warehouse so they can redeploy it into higher valued uses – physical and digital.”

To clarify, a print on demand printer, as opposed to a short-run printer, is one that will print as few as one copy of a title at a go. According to John Ingram, Lightning Source makes “millions of units per month” with the “average number of the same book that we make at any one time is less than two.”

Brian O’Leary, my colleague at Quantum and the  Principal of Magellan Media Consulting Partners, speaks and works widely in the digital publishing field; he shared a presentation about digital printing,  making the distinctions and showing the overlap among Pure POD, short run and offset printers.

O’Leary said by email that  he has a sense that “POD is gaining more mainstream use as a production tool, both to manage down inventory costs and to keep small-sale titles ‘in print.’ I know of examples of companies which handed their entire lists to Lightning Source and now does POD pretty much exclusively for its list.”

John Ingram explains how this works for a mid-sized technical publisher that is their customer. “They outsource 100% of their inventory management to Ingram. It means for the books that they publish, they figure out how many they are going to sell initially. And we go out and broker offset printing on their behalf for those books. That is traditional printing.” He continues, “Once the initial lay down happens, all these titles switch to print on demand, so that any updates that happen – and certainly in technology changes are happening all the time – all they have to do is send us the updates to files. So any of the books that we make thereafter are the latest version.”

The benefits are very clear, says John Ingram. “In effect, we gave them the best price in the industry. We gave them 100% availability – they miss zero sales, and they were able to take millions of dollars out of inventory and turn that around and invest that back into programs. That’s pretty compelling. They’ve outsourced the responsibility of inventory management, production, logistics – the whole enchilada.”

O’Leary states these benefits slightly differently. “The key thing to measure is not the cost per unit printed; on that measure, POD will always be higher. Publishers should examine the cost per unit sold, as that covers excess printing, spoilage and carrying costs.”

POD is not new. Lightning Source was a pioneer in the technique, printing its first title 15 years ago. John Ingram says it took seven years for the division to become profitable. “It’s been a long slog. It’s one of the virtues of being a private company. We were able to really build something new and stay with it until enough of the market place really got it and understood how they could use it to help them.”

Ingram Content Group is part of Ingram Industries , which was founded by John Ingram’s grandfather in 1946. According to the CEO, the enterprise is entirely family funded, with some executives also holding equity stakes. He says that the Ingram Content Group has annual revenues of about $1.5 billion and employs about 3,000 people.

Ingram Industries’ other big division is a commodities’ barge business. “There are a lot of days that I leave the office and I am sure glad we are also in the barge business, because I know these are big hunks of steel, and no one is trying to digitize grain,” says John Ingram.

This is the first of two posts reporting on a recent interview with John Ingram, Chairman and CEO  of Ingram Content Group, parent of the print on demand (POD) business, Lightning Source.

Source: Forbes

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