Lulu Founder & CEO Bob Young keynotes the Digital Book Printing Forum 2011

Most stories on the blogs and Internet news feeds I read that pay any attention at all to the publishing world are focused on eBooks. Not particularly surprising, since I mostly read tech blogs. So I was thrilled to learn that while the eBook world is growing incredibly rapidly—and the growth is accelerating—the vast majority of books are still printed on paper. Of particularly more interest to me is that the percentage of books printed “on demand”, or digitally in small (less than 10,000) quantities, is very small, but also growing very rapidly. Not as fast as eBooks, but at a good clip. So it’s a robust segment of the printing business, and I like that.

Last Tuesday, April 5^th, I attended the Digital Book Printing Forum in New York. I’d never attended this event before and one big draw for me was Bob Young, who I recognized as the CEO of RedHat (the Linux company.) Bob was previously not someone I associated with the book business. I’m very glad I attended. I really enjoyed his talk. Here is some of what I captured. Bob is also the Founder and CEO of Lulu, a company founded in 2002 that continues to pioneering in the publishing and book business. According to the company's website, more than 1.1 million creators from more than 200 countries and territories have signed up them.

It was a small room at the Marriott Marquis, probably held about 200 people. But before Bob came on to give the keynote, the room was full. I was somewhat surprised, but it wasn't a high cost event, a one-day thing, and NYC is certainly a place where the topic of book printing is still popular.

Bob didn’t have slides. He started out by telling us a very “down home” kind of founding story about Lulu, telling us about how he started the company sort of on a whim in his wife's knitting closet. He further explained to the audience that “he's not a data guy”, so he can’t be held to the predictions and pronouncements he makes in the room.

However, Bob did go out on a limb, and what he said was fascinating. First, he explained that a company called Webcom (which happened to be attending the conference) had at one time printed 1 million manuals for RedHat Linux annually. They did this for 4 years, and then in year 5 of the relationship they printed zero. Computer software manuals had completely disappeared.

Moving on to the eBook market, he basically said Kindle is dead and the sales of the iPad to date prove this, although he and Interquest said that only 5% of iPad purchasers last year were planning to use them for eBook reading. He also said that he thinks that Android will be the dominant eBook platform within 12 months. That’s quite a pronouncement, we shall see!

Then he went on to tell us about Lulu’s business, which is evolving in a fascinating way. Bob said they have about $40M revenue, and publish 20,000 new titles per month. But the really interesting thing is that he said that "self-publishing", meaning "personal self-publishing", which Lulu and a couple of others pretty much invented, is tapped out. He said this has come about due to intense competition, notably from large companies like Amazon. This may also explain why he's cheer-leading the demise of Kindle.

Bob explained that Books are “sold”, not “bought”, like vegetables at the supermarket. He said that the publisher's primary role is sales efforts. I think this may have been part of a talk Bob gives regularly, because in the New York market, I am pretty sure everyone in the room found this very obvious.

But a really interesting thing Bob said about printed books is that they are the "same" as eBooks; I.e., the printed book is another type of delivery mechanism, just like the eBook reader. Only it is paper, and presumably disposable.

Explaining further, he pointed out that there is so much free, high quality content on the internet, on virtually any topic you wish to explore, that one can never consume it all. So for books to be relevant, authors need help selling. And that is Lulu’s role, to help an author sell whether e-delivery or physical delivery is most appropriate; not competing with the author. He was very specific about this.

Bob told us that this self-publishing market is a $200 million market with annual growth of 20% in a $10 billion global publishing business. This sounds pretty good on the surface, but he says that kind of growth is too gradual to be exciting to a company like Lulu (or perhaps, their investors). Interestingly, he says young people don't care much about books at all (it’s an “old school” format for content delivery), instead reading blogs and getting free content on the internet. Data backs this up so far, with eBook reader sales much more robust to older people (>35 years of age).

So where are the opportunities? Bob says newer or more precise content, is the growth area. He gave a very good example of a niche book about photography. Man goes into a camera store where they have 50 books about taking pictures. He wants one about taking pictures of the night sky and finds that such a book doesn't exist. Why doesn’t it exist? The reason, Bob explains, is that the author says "I have 300 pages on how to take pictures of the night sky"; the publisher responds by saying, "that sounds like a short chapter in the book we want you to write". So the book the consumer desired never gets published.

In the wrap up, Bob explains this is the problem Lulu wants to solve. And Bob thinks it’s an exciting, large market, growing rapidly. The company is going to help people, with specific content and their own specific audience (that is unattainable to general interest publishers,) use Lulu’s new APIs (Application Programming Interfaces) to create specific books and then market them. Lulu will be the production and distribution method. More on this as details emerge, great topic for this blog!