The virtues of print on demand (aka POD) are well known.  Publishers no longer have to store books in warehouses, waiting for an order to come in.  Instead, systems are set up that take advantage of digital files.  When an order comes in, a copy of a book is printed.  This arrangement reduces the cost of carrying inventory and has made it possible to make many books, old and new, available even in the absence of a strong, ongoing market.  This is an instance of Long Tail publishing, and it is hard to find anything about it not to like.

There is another, emerging POD, however:  purchase on demand.  While print on demand (I will be careful about using the abbreviation here, as it can lead to confusion in this context) changes the economics of book production, purchase on demand changes the economics of book consumption.  Both forms of POD are likely to grow in the next few years and their development will increasingly be linked.

Consumers are used to purchasing things on demand, so what’s the fuss?  Someone walks into a bookstore, eyes a copy of The World Without Us or Sense and Sensibility, picks it up, and steps to the cash register, where it is purchased–on demand.  In this situation, the burden of maintaining the inventory lies with the bookseller, not the consumer.  The bookseller provides the necessary aggregation (the huge stock of titles in a bricks-and-mortar store), and the consumer plucks one copy out of that aggregation for purchase.

Not all books are sold one at a time, however; in not all instances is there a bookseller or an equivalent who is willing to bear the cost of carrying inventory.  In academic publishing, for example, one marketing practice is the standing-order plan.  For this kind of service, libraries fill out a profile (“Send me all books on American history, but do not include titles from the following list of publishers”), which is filed by a wholesaler.  The wholesaler then ships all books that fit the profile to the customer.  In this instance the cost of carrying the inventory is borne by the library, which receives hundreds, even thousands of titles, none of which have been individually examined by a librarian.

Purchase on demand arises when a subscription service such as a standing-order plan is already in place.  The aim of the purchaser is to disaggregate the subscription and pay only for specific titles.  This practice, which is just now beginning in the book industry, shifts the inventory risk from the library back to the wholesaler–and the wholesaler may in turn shift it back to the publisher.  The full economic implications of this are not known, but it is likely to result in fewer books being published, fewer copies of books being printed, and higher prices for the books that do get published.

Subscription bookselling is not new (think of the Book of the Month Club), but in a digital age, it is becoming more common.  One growing practice is the sale of digital aggregations of books to libraries, for which Oxford Scholarship Online is the model.  If OSO were to be moved to a purchase-on-demand program, the many titles in the collection would not be paid for until a library patron actually wanted to look at them.  Many publishers are now launching services very much like OSO’s, and Google is arranging to market even larger aggregations as an outcome of its recent legal settlement with publishers.  Will libraries want to acquire the entire collections, or will they determine to pick and choose, letting patron demand drive purchases?  It’s useful to ponder what purchase on demand will mean in the context of the recent Google-publisher settlement. 

For a library to move to purchase on demand, it will have to make a comprehensive catalogue available to its patrons, with instructions on making requests (“only two purchase requests per patron per week,” etc.).  The catalogue will serve as a front end to book acquisition (and it should be noted that many of the acquired books will be printed on demand).  There is no catalogue in existence today with sufficient information to support the various requirements of purchase on demand.  Amazon’s catalogue covers too much territory  for academic libraries and lacks summaries and other essential metadata; the catalogues of the wholesalers themselves are highly compressed; the catalogues of individual publishers are not aggregated in a single place.

While these examples are from institutional markets, it is likely that some of the same forces will apply as consumer subscription services are established.  We have already seen this in the music business, where consumers have gleefully been disaggregating the collections of songs stored on a single CD.  For producers of intellectual property everywhere, it is useful to bear in mind that digital technology can be applied to every point of the supply chain.  The use of bits over atoms does not put an end to the economic jockeying of producers, distributors, and customers.

 

 

Posted: 02|13|09 at 7:07 am. Filed under: Bookstores, Digital Libraries, Publishers, Publishing, eBooks. New here? Follow this entry via RSS 2.0. Comments and pings are currently closed.