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Establishing a Digital Publishing Enterprise:How Advances in Technology Can Help You Succeed

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The new corporate structure has been termed a Digital Enterprise.1 The digital revolution has invaded most every segment of corporate America. Sales, marketing, accounting, engineering, production, and shipping departments can all be facilitated with software programs. A Digital Enterprise has these functions combined in an integrated system. The publishing industry has made inroads to digital technology, and this trend will continue and probably accelerate. Therefore, it is advantageous to be aware of the trends that are taking place.

As we approach the year 2000, many amazing new developments are appearing. A large segment of the population has home computers, many of which are connected to the Internet. Dick Tracy’s wrist radio has now become a reality with Samsung’s new digital wireless wristwatch/radio. Frigidaire has produced a prototype refrigerator with a computer in the door. The next generation of wristwatches will change displays and will include computing functions.

Looking Back

Was all of this foreseeable, even in the recent past? Some of it was, because some 50 years ago I read about it in my comic books. Not all of it, however. They left out the personal computer (PC). IBM pioneered the mainframe computer in the ’50s and the personal computer in the late ’70s. The PC might not exist if it were not for the microcomputer, which was developed and marketed by Intel in the early ’70s. Apple computers did not exist until several years after the personal computer was established as a solid product. I’d like to share a short anecdotal story relating to this subject:

In the late 1960s, I was working for a company in the Washington, DC area that was developing infrared devices for Night Vision Laboratories. It seemed obvious that fiberoptics would eventually have a large market due to the wide information bandwidth of these systems. In 1972, after moving to Fort Lauderdale, Florida, I formed a company called Adaptive Systems, Inc., to produce fiberoptic communications devices at a small fraction of the price that other companies were offering. However, after several unsuccessful attempts at finding venture capital to fund the effort (“Come back and see us when your company gets to $10M,” they’d say), we put the fiberoptics effort on the shelf and began developing products for other companies. One of these was a battery-operated portable computer, possibly the first of its time. Curiously enough, the first model of this type was used for betting at the horse track. Hewlett Packard, back then, was making calculators and desktop computers, and none of the large companies were advertising battery-operated portable computers. We later obtained the rights to manufacture and sell the computer. Another of our efforts was to build and sell home computers. Again, we were unsuccessful in obtaining operating capital. The venture capitalists that we talked to “couldn’t see much use for a home computer.” Consequently this effort was abandoned, and we went into the laundry control equipment manufacturing business. We sold our company in 1978, and I went to work for a manufacturing division of a very large company, designing microcomputers for manufacturing process control.

It has now been 30 years since I first began using and designing computers. However, with the fast pace of advancements in computer technology, it is very difficult to keep current with all of the changes. New computer languages are continually born. We have had “binary,””assembly,””machine” (PLM, CPL, HPL), “operating system” (OS and DOS), “Fortran,””Basic,””Cobol,””C+,””Windows,””HTML,””LINUX,” and a host of other dedicated languages. Most technicians and engineers are now specialists in some area, such as hardware design or software programming. Some might rate Bill Gates as a computer expert, for instance. I would assert, quite frankly, that he is an expert in marketing unreliable software (he admits that his newest software release, Microsoft Office 2000, may have a Y2K flaw). It is even more difficult for the average person to keep up with these advancements. The purpose of this article is to offer a perspective viewpoint of current computer technology that is available for publishers and writers.

Adapting to the Changes

 

The new computer capabilities that are becoming available, in some cases at very low cost, are having a tremendous impact on our industry and will alter our future methodology quite drastically. These new developments extend the ability of small firms to perform such functions as layouts, drafting, typesetting, etc., more efficiently. Medium-sized and large firms have the capital to establish digital technology of a higher level than small firms and can afford to utilize consultants. The small firms, self-publishers, and writers can benefit by establishing digital capability but will have to go through a learning process. It seems clear that self-publishing is particularly worthwhile for the first-time author. Once you have entered the field of self-publishing, it is not likely that you will change to another method of producing and marketing your books. Editors, printers, marketeers, publishers, and virtually everyone involved in our profession will find it to their advantage to become educated as to the emerging transformations of methodology that are taking place and adapt to these changes in order to survive.

 

The realities of the book market can prove to be quite sobering. Most books that are written simply do not get published. Of those that are published, the recognized or renowned writers get prime consideration by leading firms. The remaining manuscripts go to lesser known publishers, vanity publishers, or are self-published. Many of the books in these latter categories will end up selling for a fraction of the cost that has been expended by the writer. While the profits on a best-seller can be remarkably high, a little research and some arithmetic will tell you that a considerable amount of money is being expended on books that do not sell in high volume. It would therefore seem that all portions of the publishing business that provide services to writers and publishers should be aware of the tradeoffs that must be made.The book business has become highly volatile. We now have the Internet and a host of digital equipment and software that will inevitably change both our methods and the way that business will be conducted. As a self-publishing firm, these new changes have had a direct impact on our methods. When we upgraded to a new computer system, a little over two years ago, it came with a program called Microsoft Voice. As I have found with other Microsoft software, it didn’t work reliably. The continual lockup of my computer was attributed to this program by the troubleshooters of the manufacturer from whom the machine was purchased, and they suggested that this program not be used. One of the problems with any voice recognition program is the large amount of memory and computation time that it consumes. Due to these troubles, I chose not to opt for the Corel version of voice recognition when upgrading to their latest word-processing program. Corel has always produced software of high quality and reliability. I just didn’t want to take the chance of the continual problems that I had with Microsoft’s program. Computer capabilities are advancing rapidly, and this problem is now of less consequence than it was several years ago, since computers now have much more memory capacity.But voice recognition is only one of the new software tools that is becoming available. Corel’s WordPerfect word-processing program has proven to be a delight in its capability and ease of use. In their Version 8, there are tools called Spell Check, for checking and correcting spelling; Grammatik, for checking and correcting grammar; QuickCorrect for automatic correction of typos; a Thesaurus, for providing synonyms and antonyms; a Proofreader; language settings; drawing capability; a spreadsheet; presentations; and a host of other functions. Corel’s latest upgrade, Office 2000, is designed for the office and comes complete with voice recognition, a spreadsheet, business forms, presentations, and multimedia. Microsoft is in competition for this portion of the computer market with their Microsoft Office 2000 software, and they have remedied some of their problems, according to the reports that one reads in computer trade magazines. These new developments can be a blessing for the writer and self-publisher. The editor or proofreader may not see it quite this way, since they supply similar services which could affect their market share. Adapting to these changes is a challenge. If these specialists choose the best, and most efficient software programs to accomplish similar results, then they may very well be able to maintain their positions in the industry and supply a much-needed function at a reasonable cost. In WordPerfect, for instance, it is possible to review, and redline, a document, mark strikeouts, and compare two documents. These are functions designed specifically for editors and reviewers. Higher level programs, such as Adobe’s Pagemaker, CorelDRAW, and QuarkXPress, which are much more expensive and more complex, are for the trained professional. The time and effort required to learn all of these software methods may discourage a writer or self-publisher, while it is more feasible for the seasoned editor to become proficient in the art and operate more efficiently.Other, more sophisticated software is also available to help you write your story. Not just a story, but also a play, novel, or a screenplay. Prices for these programs run from $79 for Storycraft, to $399 for Dramatica Pro. These programs provide thousands of “situations” to establish your characters and story, and include tutorials. The expected benefits are time savings and the similar type of advice that you might get from an editor. Check with your Internet software supplier for a list of available software, and read PC magazines for their evaluations.The capability of new hardware is also advancing rapidly. My two gigabit hard drive is now full. The newer drives can store over ten gigabits of data, which is sufficient to store over a thousand books (depending on the graphics). Laser printers are available for as low as $500. Inkjet printers are even cheaper. Fax capability is becoming a must for the publishing office, and there are several ways to add this function. My first choice was a software program, Microsoft Fax, which did not work properly. Even Norton’s Winfax also exhibited problems. A local fax service was tried, but this proved to be slow, inconvenient, and costly. Most of these difficulties can be avoided by opting for a self-contained fax machine. If you are a self-publisher, you may want to consider a multifunction machine that can provide both copies and faxes for your publishing office, since it is possible to receive faxes on the same phone line as your telephone. One of these machines was purchased for our office at a very low price, so it pays to watch the ads. In my opinion, the foil-typN xdchines do not have sufficient quality, while the thermal machines cost about 10 cents a page and usually have high resolution, but they have a tendency to cause page curl, and the pages have a yellowish tinge. Another consideration, when shopping, is a computer interface which makes it possible for your multifunction machine to copy a page and transfer it to your computer. Then you can print it out on an Inkjet or laser printer for about two cents a page, thus producing excellent copy for a fifth the price of the thermal print. The laser printer is the most desirable, since it produces better print at low cost per page, while the initial hardware costs the most. The medium-sized office can now incorporate a shared laser printer for as low as $500. My multifunction machine is made by Brother International Corporation, and has performed quite well so far.

Considering Printing Options

The technology is also evolving for commercial printing services. A self-publisher can reduce the first edition printing costs quite substantially by printing a minimal number of copies and opting for a soft cover over a hard cover. For example, the cost of producing my first book was over $10,000, and this was the initial cost before adding the marketing costs, which can be substantial. Following the recommendations listed in the literature on the subject of self-publishing, I ended up with more books than I could sell, although the book had a hard cover and was of high quality. The printer returned the layouts and original artwork, so future copies can be printed if desired. This approach doesn’t really make much sense for the first-time writer/publisher. The odds of your first book selling in large numbers is very low. Therefore, a short first printing run can be used to test the market. The newer and different lithographic equipment and software is emerging that will change printing methods and affect price factors. Now, for my third and forthcoming book, Secrets of the Atom, a total cost for short run of (250) books will be a small fraction of the amount that I paid for my first book. The tradeoff is that I will not get back the text layouts.Printing firms have various types of equipment that provide different capabilities, and publishers can make individual evaluations of the various tradeoffs. Here are some brief examples:1. The printing cost for a four-color, hardcover book in a quantity of 2,000 copies may be in the range of $4/book. Editing and proofreading will likely cost $1,000 up, thus adding $0.50/book. Color layouts, copyright, bar code, lithography, and other printing services will add several hundred dollars more, say $500. Then you will need paper to print your manuscript versions, printing ink, postage, telephone services, etc. The total production cost ends up at a little over $10,000, or $5/book. Marketing costs can be all over the place. Adding a minimum of $2,000 for marketing, the total expenditure is at least $12,000 or $6/book. Then you must set the price of your book, which should be low enough to be in the range of competitive books. Say you decide on a retail price of $12.95. Your distributor’s discount will probably be 55%, resulting in a return of $5.83/book. Already you are losing money, and the loss will be even higher if all of your books do not sell. If you sell only (1,000) books, then you will lose over $6,000, etc. The above figures were obtained using very conservative shopping methods, so it is not likely that you will do much better on pricing.2. If you opt for a two-color, softcover book, the cost can be as low as $3.75/book to print in (250) quantity from a printer using a different printing process. By establishing your own digital enterprise system, the editing and proofreading cost may be reduced to $500, and another $500 for the overhead costs of your system, and the total cost ends up around $1,100, or $4.40/book. If the retail price is $10.95/book, then you will still lose $0.50/book, but your total loss is only $125 plus your marketing costs. Thus marketing becomes a very important consideration for this example.Costs can change for a variety of reasons, and estimates can vary over a 2:1 range, so the various elements of the quotes should be carefully examined.

Producing Books on CDs

Another new and upcoming approach is to publish using electronic media. A single CD writer can be obtained for as low as $200, and a multiple CD writer can be purchased for less than $1,000. Blank write-only CD discs can be obtained for less than $2.00 in modest quantity and will undoubtedly continue to decline in cost. The discs can also be written by a company that specializes in this service. Multimedia CD is unquestionably the least expensive way to produce your book, and even the shipping costs are lower. Animation clips can be included to produce dynamic effects. The downside is that the potential market volume is lower, since not everyone has a CD player, and the book can easily be copied and sold on the black market.

Tapping into Electronic Support

With all of the computer hardware and software that is emerging, self-publishing is destined to become much more practical. A small office can be equipped for a small amount of capital by utilizing computer hardware, and the services that have been provided by various service companies can be partially supplanted by software. As to marketing, you can get on the Internet and establish your own bookstore. A Yahoo store cost me $100 per month but had a very modest number of “hits.” You can establish your own bookstore, for free, at bcity.com, and there are several other Internet sites that will do the same. There are also sites that will provide various services for your home page at modest cost ($6.95/month up). When you have all of these functional areas working together, you will then have established your own Digital Enterprise.

Conclusion

Scientific progress will be affecting the publishing industry at an ever increasing rate. Publishers who become attuned to the newest technology will have an edge on future developments. My best to all of those of you who are struggling to get ahead in this rapidly changing and difficult, but also most interesting profession. As ever, you are invited to contact me to comment or ask questions.1 R. Mills, The Digital Chain, Computer-Aided Engineering Editorial, June, 1999.

 

Weldon Vlasak can be reached via e-mail at adaptent@navix.net.

This article is from thePMA Newsletterfor August, 1999, and is reprinted with permission of Publishers Marketing Association.

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