Competitive Landscape March 2007

This series focuses on thriving or up-and-coming companies in the print industry. Some are investor darlings, others have created industry buzz with technological innovations or a new approach to selling print. If you have suggestions for companies that should be profiled in this series, email them to abrown@PSDA.org.

Streaming In a Solution

Lightning Source uses print-on-demand technology to help its clients’ bottom lines.

Digital printing is a hot field with many sales opportunities, especially in the areas of VDP and print-on-demand. But some print providers have found it hard to get customers to realize the medium’s full potential. These print providers are still in search of the winning solution, the perfect answer to their clients’ problems.

Lightning Source, an on-demand book manufacturer based in La Vergne, Tenn., is not stuck in a digital rut. It does have a winning solution. Rather than purchasing printing equipment and figuring out how to make it fit customers’ needs, Lightning Source worked the other way around. It saw where book publishers were hurting and realized that digital printing and mailing and fulfillment services could create a magic balm.

“For the last seven to eight years, we went into meetings begging and pleading with publishers to use our resources and explaining our model and our capabilities,” says J. Kirby Best, president and CEO of Lightning Source Inc. and Lightning Source UK Ltd. “Now they come to us and tell us that this is the best thing since sliced bread.”

It all comes down to a monster sales pitch. “Publishers take an enormous amount of risk printing books and hoping that they sell,” he says. Best insists that his company offers a more economic alternative by printing those books on-demand. “We offer a pull instead of a push business dynamic.”

That dynamic seems to work. Since the company’s inception a decade ago, Lightning Source’s client list has expanded to trade giants such as Simon & Schuster Inc. and Harcourt Trade Publishers. Hoover’s lists Amazon.com, Quebecor World and Random House as the manufacturer’s top competitors. (Amazon.com and Amazon.co.uk are also partners of Lightning Source. The company is also a subsidiary of book distributor, Ingram Industries Inc.)

Though the privately-held company will not release official sales numbers, Best admitted that Lightning Source’s revenues are strong thanks to its production of one million books per month. “I’ve got our operations team under pressure to produce 1.3 million books per month,” he says.

Now the company is expanding into photo books through a partnership with Blurb, an online retailer that allows photographers, artists, and bloggers to upload photos and text online that can be formatted into hard copy. Lightning Source prints these books on demand. “We’re really jumping in with both feet,” Best says. “This goes well with the 4-color books that we publish.”

“For the last seven to eight years, we went into meetings begging and pleading with them to use our resources and explaining our model and our capabilities. Now they come to us and tell us that this is the best thing since sliced bread.”
J. Kirby Best, President and CEO Lightning Source, La Vergne, Tenn.

“Lightning Source was founded back in 1997 and as the story goes, John Ingram, chairman of Ingram Distributions Holdings, was walking around the warehouse and saw all these books just sitting around on the shelves,” Best says. “At that point, he came up with the idea to partner with IBM and Danka Services International to put together this company. We started with about three associates and now we’ve blossomed to about 450.”

Best says the company has about 15 salespeople who try to bring in new clients. “Most publishers try us with a few titles at first but it can get bigger and bigger over time,” he says. “It can go from one to 10,000 titles in some cases.”

Lightning Source’s client base is broken down into three segments. The first is the traditional publishers, “which would be the McGraw-Hills of the world,” Best says. Second are the non-traditional publishers that operate like author service companies where writers can publish independently. “This would include Author House and iUniverse,” he says. The third segment is the photo book publishers like Blurb. “But by far, our largest area right now is traditional print,” Best says.

Many traditional publishers use Lightning Source to revitalize their back lists—and their bottom lines. “When you make books available and make them quickly, the old titles start to see sales increase dramatically,” he says.

Writers who use Lightning Source through non-traditional publishers see it as a way to closely manage their product. “The Amy Fisher story was the first big blockbuster book we printed,” Best says. “Amy Fisher had gone to traditional publishers but she wanted the full editorial control that they couldn’t give to her. So she went through iUniverse to retain control. They couldn’t predict what the press run would be so we just printed it on demand. It went on to become a New York Times bestseller.”

How the System Works
Best emphasizes that Lightning Source “is not a publisher. We are a book manufacturer,” he says. “We also consider ourselves to be a technology company. We print 30,000 to 50,000 unique titles every day. The technology behind that system is really quite extraordinary.”

Books can be added to Lightning Source’s on-demand file repository in a number of ways. “They can come as actual books that can be scanned,” he says. “They can be electronic files or specs that are digitally certified. They can be sent online [through a secure website] or on disk. We once had someone send a file as a single cell in a spreadsheet, but people are getting more technologically savvy.”

Most of the books are printed in-house on the company’s digital and offset presses. “But we do outsource some of our larger runs,” Best says. “We sometimes outsource offset work based on how fast the customer wants it.”

Lightning Source also handles the mailing and fulfillment of the on-demand books. “We can ship them out many different ways,” Best says. “We can drop ship to locations. Sometimes when authors are at speaking events we’ve been known to bring the books there. They can be held at our warehouse. We can deliver it to retailers. This is all just part of our normal service.”

Expansion
In 2000, Lightning Source expanded into the United Kingdom when it formed a strategic alliance with Bertram Group, the UK’s largest book wholesaler, and Blackwell’s, a leading information distributor. Best says the company is seeking more opportunities for growth by building additional plants in the United States.

“We will build two plants in the United States in the next three years,” he says. “They will be in the Northeast and on the West Coast. Right now, we have two plants, one near Nashville and another in Milton Keynes in Northern England. But we’re still looking at more international and national sites.”

Best says that Lightning Source wants to keep its plants big. “It’s very hard to make little plants effective,” he says. “We’ve found that the larger plants can leverage equipment more effectively.”

They’ll need the space with the recent purchase of 15 Océ VarioStream 9210 black and color ready digital printers. “It ranks as one of the largest press acquisitions in this country,” Best says.

LaShell Stratton is assistant editor at Print Solutions magazine. Email comments to lstratton@PSDA.org.