March 27, 2000

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New Technologies Transform Publishing Industry
Production time and costs are being cut while publishers gain more flexibility

By Barbara DePompa Reimers

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n March 14, Simon & Schuster Inc. published Stephen King's 66-page novella Riding The Bullet exclusively as an electronic book. More than 400,000 copies were downloaded in the first 48 hours--overwhelming some Web sites and online publishers.

The success of this breakthrough effort shows that there's a bright future for publishing electronic books, at least if you're a best-selling author with a massive worldwide following. What may be more important to the publishing industry is what happened before King's story was released: The entire process of editing, proofing, cover design, and marketing took only two weeks from the time King delivered the manuscript.

The gestation cycle for a book normally ranges from nine months to one year; condensing that span to two weeks is considered a publishing miracle. But it wasn't easy. "If we worked the way we did in that two-week period putting every book out, I'd have to quit and go live in a tree," says Kate Tentler, publisher of Simon & Schuster Online.

Technologies such as the Internet, the Web, electronic editing, print-on-demand, online subscription services, and E-books are beginning to transform the publishing industry. These technologies can save time, cut costs, and give publishers greater options and flexibility. They also hold the potential to make any information ever written available at any time to a much wider audience at a lower cost.

The high-profile success of Riding The Bullet has "galvanized Simon & Schuster's electronic book-creating efforts," Tentler says. And E-books aren't the only strategy. Simon & Schuster also plans to format about 4,000 titles for print-on-demand in the next year. Tentler says each book is its own case study: King's enormous popularity and this relatively short story made a perfect test case for a first online-only product and demonstrated that indeed many of his fans welcome the idea of reading a book online.

There are many reasons why book publishers are embracing new technologies. The most obvious is cost savings. A typical hardcover best-seller costs around $25. Printing and binding costs $2 to $3, and warehousing costs another $2. Going completely digital would eliminate those costs, as well as shipping and distribution costs, which could produce savings of almost 40%, analysts say.

Even without going fully electronic, technology can speed the turnaround from manuscript to printed volumes and improve a publisher's flexibility to make changes to content later in the production cycle. This is especially true for books and other materials that have a short shelf life, such as textbooks, academic journals, and computer books.

That's why professional and scientific journals, product manuals and documentation, and other kinds of printed material--not books--are leading the way, according to Marta Nichols, an analyst with Wall Street investment firm Donaldson, Lufkin & Jenrette. "Scientists and other professionals simply demanded to see this information in a more timely manner than quarterly or monthly," Nichols says.

SoftBook Press Inc., which makes devices to read electronic books, is focusing on the business publishing market. "Of the $60 billion that made up the U.S. publishing industry in 1999, $30 billion was spent on professional references and another $7 billion on textbooks," says James Sachs, CEO and chairman of the company.

In addition, another $30 billion was spent on training manuals, white papers, database reports, and other types of documentation. "The documentation needed to build a single battleship would fill 27 military helicopters," Sachs says.

But before book publishers can save money or boost sales by going electronic, they must spend money. For now, it costs more to offer online versions and print versions. First there are the costs associated with ramping up electronic production and delivery. Second, "as online readership increases in the next few years, print readership will contract. But printing costs will grow because it costs more [per copy] to print fewer copies," Nichols says.

But things are changing. Bob Ipsen, publisher of the Wiley Computer Publishing division of John Wiley & Sons Inc., a major New York publishing company, says the Web "has resulted in a more empowering and collaborative working relationship" among authors, editors, and designers.

"The Web, particularly when coupled with the File Transfer Protocol, has accelerated the traffic of content and reduced production schedules through all stages of production editing. Off-site copy editors and desktop paginators can upload and download assignments, saving considerable surface and air-mail traffic," Ipsen says.

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Photo of Ipsen by Edward Santalone

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