Late last night I got an email from Alan Beatts, the owner of Borderland Books. He's the one who had posted the profitability analysis which I used to justify the point that bookstores couldn't afford the EBM. The data he used was a little old (but the most current available). That changed this week following his talks with OnDemand Books, the company behind the EBM. Alan has posted a new analysis of the EBM and how bookstores are currently using it to make money.
First, Alan now has current info on the costs of the EBM and how it's generating money. It turns out his older info was heavily pessimistic; the device is more profitable than he calculated. According to OnDemand Books, most bookstores with an EBM use it to create between 7 thousand and 14 thousand books a year. Based on current cost estimates, that's enough income to pay off the investment in one to two years. This makes it a far better investment than before.
But there's a catch. It turns out that the booksellers aren't using the EBMs to print books from the OnDemand Books catalog (HarperCollins, Lightning Source, Google Books); no, most are operating the device as a mini print shop. It looks like 90% or so the books printed the first year come from walk-ins - local folks who bring their own file and want a few copies of their own book.
Interesting, no? This was an aspect that I hadn't anticipated. I had looked at this from the same viewpoint as Alan, where a bookstore would continue to sell books from the same sources they always had. Instead the EBM is opening up a whole new possible income source.
But again, that new income source is closer to being a print shop than it is a bookstore. It brings with it all the headaches of dealing with the author as a customer. This is not criticism, but authors naturally tend to have a lot of emotional investment in their work. This can lead to a heated situation if things don't go well.
And there's also the issue of having to lay out the manuscript for the print run; a good portion of authors might not have a print ready file. But I don't think this will matter as much as Alan did; there are many conversion specialists online who can do it for a fee.
So where does this leave the bookstore?
Well, I think there's still an opportunity here, is it really one that they're going to want? Booksellers have been forced to diversify their activities beyond selling books, so they could always add one more. But do they really want to become a print shop?
What's more, now that the "EBM as a print shop" model is well defined, there's an excellent opportunity for one of the major chains to enter the market. Like I said before, Fedex Office could enter this niche and basically run away with it.They already have a lot of the tech to do it; they just need to build the new platform.
image by avinashkunnath