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Printing

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Submitted By hyderabad3
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A popular chart going around shows that since 2001, college textbooks have increased in price more than 100% while recreational books have fallen in price by a little more than 1%. The consumer price index, meanwhile, has only increased about 30%. Have writing, printing, and supplying higher-education materials increased in cost so much that producers are just trying to pass on the expenses? Likely not.
The fact is that consumers of college textbooks typically don't have a choice, making the demand inelastic and allowing publishers to charge prices well above what the consumer may value. While fantastic for publishers' margins, is this bubbly business sustainable?
Let's analyze it.
The rotating roster of publishers
McGraw-Hill Education, now owned by Apollo Group (NASDAQ: APOL ) , Pearson (NYSE: PSO ) , and Houghton Mifflin Harcourt make up the three largest educational publishers. The previous owner of McGraw-Hill Education, McGraw Hill Financial (NYSE:MHFI ) , completed the sale of its textbook segment in March for $2.4 billion in cash, which it is using for share buybacks.
Why did McGraw Hill want to divest from its education segment? The company's press release positions the slimmer group as "a high-growth, high-margin benchmarks, content and analytics company." And since completing the sale in March, McGraw Hill's stock has outperformed the S&P 500 by 14%. But was the segment that big of a drag?
Not too much. In 2011, its education business brought in 37% of its total revenue, with a 14% operating margin -- what could be considered a healthy business. However, compared to its other businesses, like the S&P Ratings segment, which packs an operating margin of more than 40%, the education segment was the slowest and least flashy of them all.
Pearson, meanwhile, takes in 50% of revenue from its North American Education segment, at an operating margin around 17%. In its annual report, Pearson trumpeted its 2% increase in this segment's revenue compared to the industry's total decline of 10%. However, being the best player in a losing industry is never an enviable position.
Digital trends: Boon or boondoggle
The focus now for textbook publishers is to attempt to control the industry shift toward digital solutions. Both McGraw-Hill Education and Pearson offer a bevy of digital products. This includes McGraw-Hill's Connect, Learnsmart, Cinch Learning, and Acuity, and Pearson's eCollege, MyLab, and OpenClass. The summary of all of these products is increased interactivity and engagement and more modular and bite-size chunks compared to the all-encompassing textbook.
However, even with a litany of catchy brand names, the digital market may never replace the revenue from pulp books. In an interview with Education Week, one school district superintendent states, "We used to invest hundreds of thousands of dollars every year in the textbook cycle, but we don't do that anymore."
Looking at other examples from history, the recording industry fumbled the digital transition as they sought to litigate their stronghold against music downloading. Television and movies learned from this, and the networks created Hulu, where they were able to offer a solution that consumers could turn to instead of pirating content while they collected some additional advertising revenue. And now in education, one of the slowest industries to accept change and transform, textbook publishers must find a favorable outcome.
A market top or industry lull
It's possible McGraw Hill Financial sold its education arm at the top of the market. But with recent acquisitions like Pearson's purchase of EmbanetCompass, which helps colleges move classes online, there's a sense that one company can become the iTunes of curriculums. And, if so, providing digital services could have much higher margins than printing a book.

ARTICLE 2
When you’re trying to build a competitive business, you want to build a barrier to entry that’s as high as possible. This stops any old Jonny-come-lately competing with you. Traditional publishers have had a long time to build that barrier. Here’s what they have:
1. Editorial staff – they have the best. After university, when I became a scientist and then started an IT business, I wondered what had happened to all those brilliant English Lit students. I never came across them in science, healthcare or business. They’d simply vanished! Then I became a published author, working with brilliant editors like Elv Moody, Polly Nolan, Clare Argar and Jessica White at Scholastic Children’s Books UK. Suddenly the answer to ‘what did you study at university’ was invariably ‘English’.
The best and brightest English Lit. graduates often aspire to work in publishing. They get paid in sixpences and have to work in That London. And still, it’s devilish hard to find a good job. You’d better believe that traditional publishers employ the best editors you will ever meet.
What you could do: However, some great editors have been laid off. Many now work freelance. You can find them via various literary consultancies. There’s never enough money in publishing – your coin will be as good as anyone’s.
2. Designers – Similarly, some terrific artists work in publishing. Book jacket design is a real skill. However, there are plenty of freelance graphic designers, too.
3. Supplier relationships. Traditional publishers know who are the best printers, they have contracts with the distributors, warehousing, etc.
What you could do. I checked the website of Bookmarque, the printers who print Joshua Files. They’ll print short runs (say, 1000 copies) of offset-printed books and deal with indie publishers. They can hook you up with a warehousing-distribution supplier to handle fulfilment. Even Scholastic Children’s Books now use Harper Collins for fulfilment.
4. Bookseller relationships. When I was first published, SCB took me to the Galaxy Book Awards, specifically so that I could meet the key buyers of children’s books from WHSmith, Waterstones, Gardners and Borders. It was quite a revelation to realise that the key decisions in children’s books were made by a small handful of people. Publishers have those relationships. You don’t. It’s theoretically possible that I myself could work the phone to persuade Sainsbury’s to buy my next book directly from me. But I’m putting all my eggs in the online retail market. You have to draw the line somewhere, or hire a salesperson.
5. Opinion-former relationships: Excellent relationships with critics and the key opinion-formers in fiction have a lot to do with books getting good reviews. It’s not that critics are having their arm twisted. It’s simply that if you are my friend, you are more likely to look kindly on a book that is close to my heart, in which my employer has invested major moolah, and you may be less likely to point out any hideous flaws. Friends are inclined to be nice to their friends. Publishers take pains to be nice to opinion-formers, invite them to dinners, conferences, etc. This is simply good business practice. It’s not ever going to reach the levels of charm-offensive as the pharmaceutical industry schmoozing doctors at sales conferences in Cancun. But it’s on the same continuum.
What you could do: Not much. If your book is truly brilliant (e.g. you are Junot Diaz, Mario Vargas Llosa, etc) and you persuade a critic to review it, you may get a good review. You can pay for aKirkus Review, if you have a strong nerve. Kirkus Reviewers are famously brutal. (A Kirkus reviewer disliked Invisible City but was rather more favourably impressed with Ice Shock.)
6. Media contacts: We live in an age that values the written word less than ever before. No sense throwing your hands up in disgust about how society is going to hell in a handcart. Computer games and YouTube and social networking were not available in Dickens’s time, there was little enough entertainment that his sometimes intractable and always colourful tales were blockbusters. When I was at high school I used to scribble bawdy Blake’s 7 scripts in the central pages of my maths books, rip them out and pass them round my classmates, who were always demanding more. Intelligent people, when bored, will read almost anything. Nowadays they can just check out their friends on Facebook.Therefore, it’s not easy to get the attention of media for a books. There are channels, including specialist TV and radio shows. But they preach to the converted. Harry Potter didn’t get huge by preaching to the choir – the story of a children’s book selling 30,00 copies burst onto the mainstream media. (When Invisible City sold 40,000 in the first four months, the media reaction was a big, fat meh.) By the time Twilight went mainstream in the US it had already sold around a million copies. The bar is higher now.
What you could do: Publishers employ dedicated publicists to get their authors media coverage. If you want media coverage, you need to, too. Not cheap, but this is where you might want to put your third thousand pounds. Don’t expect magic, but if you are a nobody (not already a household name) this will level the playing field against traditionally-published nobodies, i.e., most fiction authors.
7. Literary festivals: It’s not clear how many copies are shifted as a result of an appearance at a literary festival. Unless you are already a Name, you’re unlikely to garner any publicity from the appearance. Publishers are probably quietly on the fence about whether they should continue to throw budget at sending authors to Edinburgh, Hay, etc. However, I was surprised to hear that it’s not just up to the publisher whether an author is invited to a literary festival. My friend Professor Paul Broda, a molecular biologist who published a beautiful volume of biography about his parents being Soviet spies (Scientist Spies), told me that anyone could apply to go to most literary festivals, and he was planning on doing just that.
What you could do: Like Paul, you could apply to the literary festivals to appear on their programme. The fee (usually around £150) would probably cover your travel expenses.
8. Foreign Rights: Publishers and agents have the foreign rights marketplace sewn up. They have relationships with dozens of foreign language publishers and party with them at trade fairs in London, Frankfurt and Bologna. Many a book advance is actually paid for by the sales of foreign rights, sometimes to publishers who themselves fail to recoup the advances. So long as your originating publisher makes money, you will probably continue to have a good relationship with your publisher. Business is all about relationships and those with people who lives thousands of miles away take careful nurturing. A self-publisher can rule out foreign rights sales, unless their book hits it big, which is unlikely.
What you could do: If you’re feeling very energetic, you could try getting in as an indie-publisher to the International Rights section of a major book trade fair and hustling 40 publishers over two days. This is well beyond most authors I know. Even some agents prefer not to engage and leave the foreign rights sales to the originating publisher. Your best bet here is to have a literary agent who handles foreign sales, doesn’t mind you self-publishing a book they might have sold and agrees to handle your foreign rights. You can find them in the telephone book next to the Tooth Fairy. (actually, seriously, I can see literary agents increasingly agreeing to do this.)
As a self-publisher you will probably be looking at accessing only about 30% of the retail market (i.e. the online sector). You won’t see much media coverage (neither do most traditionally-published authors). Like all but the front-list authors, you won’t be invited to dinners, conferences or literary festivals unless you work the phone very hard. You won’t meet the opinion-formers and if you do, you will be a self-pubbed author, ewww. (‘Not that there’s anything wrong with that’ is not yet politically de rigeur in publishing.)
Good luck if you’re prepared to try all this, but like hiring a sales force, I draw the line at much of this. I prefer to work the 30% online retail sector hard and use aggressive pricing, like million-selling self-publisher John Locke.
Access to 30% of the paperback retail outlets, 100% of the digital outlets, your own marketing efforts and the opinions of ‘ordinary’ readers (i.e. not critics) are all you have. However, you get to keep 35% royalties as opposed to 7.5%. So you have to sell five times fewer* copies to make the same as you would from sales of a traditionally published book.
Even five-times fewer will be difficult, without the boost of proper marketing. That’s why you need to do some.
Time to market: I'm not exactly the patient type who'll wait for a release window that will fit my publisher.
Pricing: I don't want to compete against well-established authors releasing their opus in the same format for the same price. Mine has to be lower.
Size and scope: I want to be able to publish a book with a number of pages based on the subject's scope, as opposed to antediluvian dictates saying books should have x hundreds of pages.
Updating capabilities: for a business book, being able to quickly make a new version with fresher data (or thoughts) is a must.
Control: I like the idea of picking the professionals who will help me with editing and design; no such freedom with a traditional publisher. Same for marketing and promotion; there, given the level of frustration I often see authors endure, I'd rather go by myself, or hire the right person to do it.
Permanence: an ebook never dies; it's as easy to find as a new release in digital bookstores. Great for personal branding.

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