‘Transitioning’ to Digital Distribution

From Publishing Perspectives:

This month’s column describes Mensch Publishing’s transition from a mixture of traditional print and distribution to a wholly digitally driven model.

The Downsides

Change is hard and frequently expensive.

The files I’d created for the traditional route and held by my publishing partner were, it turned out, formatted to the first, normally hardback edition. This master file was used to hold any corrections or changes.

In moving to a print-on-demand solution, paperback is the preferred format for reasons of cost and author and customer pressure. I only discovered the problem when proofs, and in a couple of cases of finished book, were reformatted with illustrations in the wrong place and new pagination. We had to re-typeset most of the titles.

I was grateful that I’d taken an early decision that Mensch titles wouldn’t have indexes. If anyone really wanted help in finding a name or whatever, they could buy the ebook and search to their heart’s content, which would have entailed even more work and cost.

Even where there was no change in format, the paper used in on-demand printing is likely to be of a different thickness,  meaning that cover artwork had to be revised to take account of a changed spine width.

The next downside is the reluctance of retailers, both traditional and on the Internet, to stock print-on-demand titles because of perceived, although not actual, non-immediate availability; limited returnability; and typically lower discounts, lower retailer margins—all valid reasons from the retailers’ point of view: They’ve enjoyed increased discounts; increased stock security; and improved delivery schedules over the last few decades. They were obliged to resist, even at the expense of reducing the range available to their customers.

Of course there’s nothing about print-on-demand requiring a firm sale or lower discounts to retailers—these are publisher choices but my choices were and are driven by a commitment to reducing waste; maximizing author income; and focusing on marketing to drive sales rather than positioning in terrestrial bookshops.

The corollary of this lack of retail support has been a certain amount of author discomfort at not finding his or her books where they’d like to see them. My riposte that the proportion of new titles prominently displayed at traditional independent and chain bookshops is very small. Ask even the major publishers how many copies of non-automatic best sellers are subscribed into brick-and-mortar stores.

However, there are always exceptions, and launch parties in bookshops can happen if strict discount and returns policies are temporarily waived. The downside of this is that these special arrangements need to be separately accounted, thus undermining the overall pure simplicity of the new model by adding accounting complexity.

And of course right now, print-on-demand books cost more per copy to print, but the savings elsewhere in the supply chain are significant.


Every book is available in every market simultaneously without the need for special shipments or inter-warehouse arrangements. In a world of international media, this is, in my view, an essential service to authors. What would an author think of a great review in, say, the Guardian in the United Kingdom, a review downloaded hugely in the United States—but Americans couldn’t purchase the book because the US publication date was later than the UK’s?

With print-on-demand, there are no are no out-of-stock issues. Every book is constantly available. No need to cogitate on the size or practicality of a reprint. No need for the inevitability of the last reprint of a book never selling out (by definition). No stock wastage as there is no stock except where held and made available by retailers and wholesalers. Fewer trees need to be cut down.

Printing takes place mainly in the country of purchase: There are no shipments by sea or by air between continents; no unnecessary handling costs.

Most importantly perhaps, there are no unnecessary CO2 emissions. Production quality is superior to traditional litho. This came as a surprise to many of our authors but a pleasant surprise.

As part of this, I’ve signed up to automated advertising for the books in order to drive sales, rather than rely on retail displays.

Daily access to sales performance is a boon. Daily changes to metadata are feasible.

Most important of all to me is that I now have control and transparency, and this allows me to communicate with authors without having to adapt to any other organization’s time frame.

Link to the rest at Publishing Perspectives

SPD Client Presses Race to Claim Books as Ingram Drops a Tight Deadline

From Publishers Weekly:

An email sent by Ingram Publisher Services to former clients of the shuttered SPD Press Distribution is causing more panic in the independent publishing community. The email directs publishers to fill out a form by April 17, providing Ingram with instructions about where to send their titles—at the presses’ own cost. But what has publishers most anxious is Ingram’s plan to “recycle” any inventory remaining at the Ingram warehouse after 60 days.

Given the current state of confusion and uncertainty about future distribution arrangements, some publishers worry that two months isn’t nearly enough time to complete the process of finding a new home for their titles. Others on social media pointed out that some of the 300,000 books that were at the SPD warehouse likely belong to publishers that are no longer operating, and, without anyone around to claim them, will simply be destroyed.

The email also notified publishers that with the closure of SPD, Ingram’s warehouse and fulfillment agreement with the distributor has ended and that Ingram has stopped fulfilling orders. This puts publishers in a lose-lose situation: on the one hand, filling orders with no clear path for retailers to pay suppliers is a losing proposition; on the other, no new orders coming in means no cash flow.

The IPS email also says that Ingram will continue to process returns from the Ingram wholesale business for all titles associated with SPD for six months. After that point, all returns will be recycled “unless agreed otherwise.”

Responding to the urgency of the distribution question, Independent Publishers Group will participate in a webinar hosted by the Community of Literary Magazines and Presses on April 8 at 3:00 p.m. EDT, in order to provide information about its different services. CLMP is inviting all presses with at least $10,000 in annual sales and an ongoing publishing program to attend. On April 9, IPG will host its own online open house at 3:00 p.m. EDT.

Link to the rest at Publishers Weekly

Small Press Distribution Shuts Down

From Publishers Weekly:

Small Press Distribution, one of the last remaining independent book distributors in the United States, has closed. In an announcement made March 28, SPD executive director Kent Watson said that the closure is effective immediately, and that the staff is in the process of winding down the business.

Watson cited a decline in sales and a loss of institutional support as the reasons forcing the distributor, founded in 1969, to close. “Despite the heroic efforts of a tireless staff to raise new funds, find new sales channels for our presses, and move from our outdated Berkeley warehouse, we are simply no longer able to make ends meet,” said Watson in a statement. In February, SPD completed moving more than 300,000 titles from its Berkeley facility to warehouses owned by the Ingram Content Group and Publishers Storage and Shipping.

The transfer was part of Watson’s plan to keep the nonprofit distributor a viable option for small publishers by cutting operating costs while simultaneously increasing services such as access to print-on-demand facilities, e-book and audiobook distribution, and more extensive distribution in the U.S and worldwide.

The move from the Berkeley warehouse was facilitated by a GoFundMe campaign that raised $100,000. Watson launched a second effort last month in an attempt to raise another $75,000 to roll out the new services to publishers, but the campaign was having trouble gaining traction. In announcing the closing, Watson said that the warehouse shift took longer and cost more than SPD had planned for, while systems integration delays further strained SPD’s financial resources. Part of that strain, Watson elaborated, was due to a loss of $125,000 in annual grants SPD had previously received, a loss Watson attributed to “funders [moving] away from supporting the arts.”

At the moment, all SPD inventory remains at the Ingram and PSSC warehouses. In a post on its website, SPD said publishers will need to contact Ingram or PSSC to discuss distribution options and the return or disposition of their books.

The demise of SPD is another blow to independent publishers looking for distribution options to reach retail accounts.

Link to the rest at Publishers Weekly

PG says a lot of many small presses are operated by very conscious people who love books and will publish authors who can’t get a New York publishing contract. These authors are left out in the publishing cold because they write for a group of faithful readers that is too small to move any New York profit needle.

It’s not unusual for small businesses of all sorts to be thinly capitalized without any financial backup plan to weather a storm like that described in the OP.

Authors publishing through small presses provide writing is attractive, at times very attractive, to a small group of ardent book lovers. Again, unless such readers manage to gather hundreds of thousands of like-minded book lovers, big publishers are unlikely to fill a gap that has kept some small publishers in business.

Ingram may want to help, but they operate in large-volume printing and distribution that is designed to sell at least thousands of copies of a given book. PG notes that Ingram Lightning Source does provide print-on-demand service. PG understands that Ingram charges an annual Market Access Fee of $12 for each title a publisher places in the Lightning Source system.

He doesn’t know enough about Ingram’s real-world per-page fees and shipping fees to speculate if it can provide a profitable safety net for small independent publishers. However, he suspects that Small Press Distribution, the last distributor services small publishers that has closed its doors as described in the OP, must have had some significant benefits to small publishers that Ingram does not offer.

AAP StatShot: In 2023, US Revenues Were $12.6 Billion

From Publishing Perspectives:

In its release today (March 26) of its December 2023 StatShot report, the Association of American Publishers (AAP) the year-to-date figures cover last year, with total revenues across all categories in December 2023 down 2.5 percent as compared to December 2022, at US$970.7 million.
Year-to-date revenues, the AAP reports, for the overall industry were up 0.4 percent at US$12.6 billion.

As Publishing Perspectives readers know, the AAP’s numbers reflect reported revenue for tracked categories including trade (consumer books); higher education course materials; and professional publishing.

Trade Revenues

Calendar Year 2023

Trade revenues were down 0.3 percent at $8.9 billion for the calendar year.

In print formats:

  • Hardback revenues were up 0.4 percent, coming in at $3.3 billion
  • Paperbacks were down 2.0 percent, with $3.1 billion in revenue
  • Mass market was down 22.9 percent to $140.0 million
  • Special bindings were up 2.2 percent, with $210.0 million in revenue

In digital formats:

  • Ebook revenues were up 0.6 percent for the year as compared to the year 2022 for a total of $1.0 billion
  • The closely watched digital audio format was 14.9 percent for 2023, coming in at $864.0 million in revenue
  • Physical audio was down 16.2 percent, coming in at $12.9 million

December 2023
In December, the industry’s trade revenues were down  1.2 percent, at $719.0 million.

In print formats:

  • Hardback revenues were down 8.6 percent, coming in at $245.3 million
  • Paperbacks were down 7.2 percent, with $244.0 million in revenue
  • Mass market was up 5.4 percent to $11.0 million
  • Special bindings were down 14.2 percent, with $18.1 million in revenue

In digital formats:

  • Ebook revenues were up 16.3 percent as compared to December 2022, for a total $90.3 million
  • The digital audio format was up 24.5 percent for December, at $81.9 million in revenue
  • Physical audio was down 7.8 percent, coming in at $1.1 million

. . . .

AAP StatShot reports the monthly and yearly net revenue of publishing houses from US sales to bookstores, wholesalers, direct to consumer, online retailers, and other channels. StatShot draws revenue data from approximately 1,240 publishers, although participation may fluctuate slightly from report to report.

“StatShot reports are designed to give ongoing revenue snapshots across publishing sectors using the best data currently available. The reports reflect participants’ most recent reported revenue for current and previous periods, enabling readers to compare revenue on both a month-to-month and year-to-year basis within a given StatShot report.

“Monthly and yearly StatShot reports may not align completely across reporting periods, because:

  • “The pool of StatShot participants may fluctuate from report to report
  • “As in any business, it’s common accounting practice for publishing houses to update and restate their previously reported revenue data

“If, for example, a business learns that its revenues were greater in a given year than its reports first indicated, it will restate the revenues in subsequent reports to AAP, permitting AAP in turn to report information that is more accurate than previously reported.”

Link to the rest at Publishing Perspectives

PG is happy to be corrected by visitors to The Passive Voice who are more statistically literate than he is, but it appears that sales of digital books – ebooks and digital audio – are growing briskly while sales of physical books in all forms are in decline.

PG notes that this is only a snapshot of recent sales, but he doubts that sellers of physical books in any form have been dancing in the streets in recent weeks and months.

From the standpoint of a vendor, sales of digital books and digital audio have to be inherently more profitable because there are no expenses associated with physical stores to pay directly or indirectly.

Organized groups of electrons can be moved from place to place at an extremely low cost.