Changes in the US printing market may leave book publishers with higher prices and restricted print volumes
Book printing and manufacturing (aside from the fortunes of print-on-demand services popular with self-publishing authors) is not a topic we’ve covered before in Hot Sheet. But as consolidation among printers increases, you’ll hear more concern among traditional publishers at industry trade shows and groups about book-printing supply and demand.
A good barometer of this concern is the frequency of its appearance in an industry newsletter like Publishers Lunch. In December 2018, Michael Cader wrote (subscription required) that the year was notable for tight markets in both paper and book printing, which “had publishers juggling all the time to keep popular titles and steady backlist alike in stock.” He said the issues look systemic but are complicated by the closure of a major printer, tariffs on paper, and the potential merger (at the time) of the two biggest printers in the United States. Cader’s conclusion: The problem would continue into 2019. Tight capacity is the new normal, and there’s no slack in the system. Since then, Publishers Lunch has revisited the supply-and-demand problem multiple times.
Publishers’ printing woes—which, for most authors, is very insider baseball—came into the limelight in 2018 when two well-known six-figure authors wrote an article complaining about the seeming incompetence of their publisher, Harper Business. No print copies of their book were available five days after launch (the first modest print run sold out), and the authors were livid: “[We were given] every possible excuse except ‘the dog ate my homework.’ Which, really, would have been a more compelling excuse than ‘tariffs.’”
When, last year, the two biggest US printers, LSC Communications and Quad/Graphics, announced a potential merger, the Department of Justice filed an antitrust suit to block the deal. PEN America and the Authors Guild wrote a letter to the Department of Justice supporting the antitrust suit, since LSC and Quad are the only two options in the US for printing books and long-run magazines. (No publishers wanted to go on the record as opposing the deal due to fear of reprisals, their letter says.) Soon, Quad and LSC terminated their merger plan rather than fight an antitrust suit.
Well, be careful what you wish for.
Quad/Graphics, the second-largest book printer in the US, has announced it will exit the book business entirely. That may sound dramatic—and it is, for book publishers—but Quad won’t miss the revenue and, in fact, its profits ought to improve. Quad’s annual net sales are around $4 billion, of which $200 million is book printing, with the book-printing segment losing money. Quad is selling (or hopes to sell) the division. At Publishers Lunch, Sara Grace writes, “Book publishers thought they were relieved when the Quad-LSC merger was terminated in July, but the community faces the more existential question of who wants to own and invest in these critically needed but financially unappealing assets.”
Meanwhile, LSC struggles with a drop in printing demand across multiple sectors. Their most recent quarterly report blames their current earnings decline on digital disruption in magazine and catalog printing as well as fewer educational book sales. In addition, they recently announced the closing of two printing plants—one of them a Gideon Bible printer, the other a printer of retail inserts and Sunday magazines. Their difficulties even extend to Dover Publications, which they bought in 2015. This February, Dover will eliminate 22 of 37 positions, extending across editorial, art, sales, and marketing.
We talked to Bo Sacks about the current environment and how we reached this point. Sacks is a veteran of the printing and publishing industry—primarily on the magazine side of the business—who has observed the evolution, growth, and decline of printers for the last 50 years. “They’re in serious debt, which is part of the problem,” he tells us. There’s been a long, ongoing race between the two printers to buy up market share. Sacks says sometimes the printers would buy a company just to get the clients, then shut down plants. Quad, in fact, only entered the book-printing business in 2010, and through just that type of scenario. But these decisions were made in another era, Sacks says: “2010 seems a lot longer than 10 years ago. The difference from that moment … until now is unbelievable.”
Sacks says that Quad built the company on the expectation that long-run magazines would go on forever. Long-run magazines are titles that get printed in extremely high quantities. But that’s not a business model that works today. “The long-run titles are diminishing and dying left and right,” Sacks says. “So what they’ve done in the last decade is buy plants that focus on short-run printing.” He says that getting quality workers—productivity—has also been part of the problem. And indeed, at the Book Industry Study Group annual meeting this year, an industry expert on book manufacturing said that a tight labor market is one of the industry’s biggest problems, and perhaps only automation can solve it.
Bottom line: Book publishing is just a fraction of the overall printing and paper business in the US, and it will continue to be at the mercy of bigger marketplace changes. In the Nov. 12 issue of Publishers Lunch (subscription required), Carolyn Reidy, CEO of Simon & Schuster, says the effect of Quad’s sale will be “a higher cost for publishers across the board” due to limited capacity and printers under financial pressure. Printers now seek revenue streams to help them grow and service their debt; the CEO of Quad said their decision is part of a larger “transformation strategy” (dubbed Quad 3.0) that goes beyond printing and offers integrated marketing solutions. One anonymous magazine-industry blogger wrote, “Book publishers may not fit the 3.0 strategy because, unlike retailers and magazine publishers, they are likely to have little use for Quad’s non-printing offerings.” However, LSC is also definitively moving into the “solutions” business to help publishers increase sales. Sacks tells us that the printers are ultimately doing what they must: “Every year we print less pages. … You need alternative revenue streams, even a printer. Every competent company is seeking them.”
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
