Everyone's a Publisher

Baldwin Louie — Fri, 02 Apr 1999 17:00:00 -0500

The MP3 digital-audio format rocked the entertainment world by letting artists end-run the hoops and hurdles of music publishing. A year ago, MP3 was hardly a blip on the oscilloscope. Today it accounts for 23 percent of all antacid sales to high-level music industry execs. It can't happen here, they thought. But it did. And it's about to happen again, this time to the $20 billion book-publishing business.

The driving force is publishing-on-demand, hardly a new concept. Textbook publishers have experimented for years with just-in-time production of books tailored to specific course requirements. McGraw-Hill pioneered this technology with its Primis database-publishing system. While interesting, the results have not caused any noticeable seismic activity.

But add a little Net savvy, stir and stand back. Through a combination of on-demand printing, digital production, traditional distribution and online marketing, upstart Internet outfits such as Xlibris and ToExcel.com are radically revising the way books are produced and marketed. "We're filling niches previously untouched or underutilized by the publishing industry today," says Nick Bogaty, ToExcel.com's managing editor. And, for once, it's no hype.

For a few hundred dollars, these sites enable authors to publish their books without dealing with finicky agents or being hassled with such unwriterly concerns as print-run sizes, market demographics and retail shelf space. Authors get a percentage of sales equivalent to or better than traditional book royalties. While John Grisham is unlikely to jump at the prospect, many less established writers will.

ToExcel.com first converts an author's manuscript into Quark (dossier) files to drive one-off printing and into HTML to create an instant Web site. Customers peruse the book online or even read the whole thing for free. If they like what they see, they can purchase a hard copy, which is then custom printed: one order, one book, no warehouse, no inventory.

Of course, the material could be gold or purest dreck. Like arbiters of taste in the music biz, "legitimate" publishers like to pretend this is a big deal. However, it's surprising how often literary judgment is shaped by a marketer's spreadsheet. In the vanity press model, authors pay for print runs up front. Such publishers don't much care whether the product ever sells. In contrast, on-demand publishing shares the risk with authors and leaves aesthetics to the market. ToExcel.com starts making a profit after a book sells a mere 100 copies.

Publishing-on-demand is not just for aspiring writers. To get his out-of-print AppleScript and HyperCard books back on the market, best-selling author Danny Goodman was one of the first to sign up with ToExcel.com. There is still demand for his books, but not enough to entice traditional publishers. "It was a no-brainer," says Goodman. "I sent them copies of each book and voila, the titles were available for sale online. It's like magic."

Xlibris offers a similar suite of on-demand publishing services. But having a Web site and the ability to print books to order are only half the battle. In addition, ToExcel.com has established relationships that reduce manufacturing costs and broaden market reach. Hard-copy production and fulfillment are outsourced to Lightning Print, which could have perceived the company as a competitor. Instead, it saw a natural partner with sufficient Internet acumen to develop a lucrative new revenue stream.

Not incidentally, Lightning is a subsidiary of Ingram Books, the world's largest book distributor. Ingram's database is regularly uploaded to the Amazon.com (AMZN) and Barnes & Noble (dossier) sites. Despite ToExcel.com's proximate ties with Ingram, both companies are well represented in these online outlets. Searching Amazon.com for "Xlibris" turns up 303 titles. The score for ToExcel.com is 128.

Let's review then, shall we? Book retailers didn't see Amazon.com coming until it was too late to do much about it. In the same way, the music industry got blindsided by MP3. In the latter case, the parallels with on-demand publishing are striking. Both offer free downloadable content, market exposure and a way to sell products online with offline delivery.

CDs crammed with MP3s are more convenient than low-bandwidth downloads. People will buy them. Books are more convenient than screens of text. They're so handy in the bathroom. Are Scribners and Random House (dossier) quaking in their boots at the prospect of widespread publishing-on-demand? Probably not yet. But given recent Internet upsets and surprises, perhaps they should be.

Before creating Entropy Gradient Reversals (www.rageboy.com), Christopher Locke developed Internet businesses for CMP Publications, Mecklermedia, MCI and IBM (IBM). Reach him at clocke@panix.com.

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Everyone's a Publisher