EDITOR'S note:

What if you could print a perfectly bound volume in as little time as it takes to brew a cup of coffee?

That is the premise behind the Espresso book machine, which turns digital PDF files into paperbacks in minutes.

Jason Epstein and Dane Neller, chairman and CEO respectively of On Demand Books in New York, the company behind the Espresso book machine, explains to Knowledge@Wharton how the technology has the potential to transform book publishing.



Q: What will a book be in the digital age? Will it simply be a traditional book digitalized?

Epstein: We are talking about two different things - content and format.

As far as content is concerned, that has been extraordinarily stable over centuries. A book will remain a book in that sense, no matter what the technology is.

Regarding format, eventually all the content will be digitized and available everywhere in the world in that format. It will be downloaded in one way or another - either to be read online or to be printed in book form by Espresso or similar devices.

What the proportion will be is impossible to say at this point.

My guess is that the dominant format will be the traditional codex (the format used for modern books), which is convenient, durable and portable.

At least in America, when you buy a physical book in the bookstore, you own it; you can do what you want with it. When you download a digital file onto your Kindle, you don't own it for fear that it will get loose. It could become viral and then the copyright would be lost, so publishers have to protect that.

Q: Book publishing is witnessing a shift from physical inventory to digital distribution. How do you see the implications for the different players in the value chain - authors, publishers, retailers and customers?

Epstein: When this all settles down in four or five years, much of the publishing infrastructure will have been eliminated. Digital files can go from the publisher to the end user in one step with no intervening process.

To the extent that this becomes possible, obviously the price of a book to the consumer will be lower because there will be less cost involved. The reward to the writer will be greater for the same reason. The possibility of profit to publishers will also be greater.

Q: How do you find publishers responding to these changes?

Epstein: Let me tell you an anecdote. When I first joined the publishing business, I was 21 years old. It was in 1951.

I worked at Doubleday, and it occurred to me that it might be a good idea to take some of the books that my colleagues in graduate school - where I had just come from - weren't able to afford because they were only available in hardcover and put them out in paperback.

There was a new market because of the GI Bill; millions of people who had never gone to college before were now going to college to study.

By some miraculous effect, the man I worked for said, "Okay, we'll try that." So we printed 12 of those books in that format. It was a permanent paperback format that would be sold in bookstores, not like paperbacks sold in newsstands. To make a long story short, it revolutionized the book trade.

There is a lot of inertia in the publishing industry, and it hasn't changed since 1951. Publishers are loath to see the next step.

I can talk about other innovations that ought to have come out of the book business but didn't.

For example, Amazon should have come out of the book business. The publishers should have seen that. In fact, I did see that when I created my Reader's Catalog (during the 1980s), which in effect became Amazon.

The digitization process (of books) also should have begun with the publishers. They should have seized this opportunity. They should have taken the initiative and not left it up to Google.

Eventually they will come around, whichever of them are left. This change is going to be revolutionary. Look at China. University towns there have 2 million students. We just signed a deal with the China Publishing Group, the country's largest publishing company.

Their goal is to make available Espresso book machines throughout China and reprint Chinese books, English books, French books and others. Their focus now is mainly on scientific and professional volumes, but over time that will change.

You are talking about more than one billion people, some of whom have never seen books before.

Q: If all books exist essentially as single droplets in a vast digital cloud, how will each book be found?

Neller: Let us take the university setting and consider library books. That is an enormous growth area.

One way these books will be found is through the library's electronic catalog systems.

If you are a student, you will have access to the entire database of the library as well as have the ability to choose new acquisitions. These could either be in e-book form or print form. So you will discover books through that mechanism.

Outside the library systems, books will be made accessible through companies like Google who will make them discoverable. Readers will find books through Google, Amazon or websites of special interest.

Q: You are talking about accessibility and availability. But what about awareness? Right now a lot of people become aware of books in a bookstore. They pick the book up on the shelf and leaf through it. When books are part of a vast digital cloud, how will people become aware of them?

Neller: Word-of-mouth has always been the best way to sell a book - and the Web represents the word-of-mouth medium in spades. There's never been anything like it.

Amazon does a very good job of building awareness about books. Believe me, Google will as well.

Q: How did you coame up with the idea for the machine?

Epstein: For my entire career I have been concerned about backlists. Backlists keep publishers in business. They are like annuities; these are books you sell year after year with no effort and at very little expense.

In the mid 1970s, I noticed that backlists had begun to deteriorate rapidly - 60,000 or 70,000 titles a year or more and growing. There were two reasons for this.

One was a change in the tax law that made it no longer possible to write off unsold inventory as a business expense. The other was the demographic shift from cities to the suburbs.

The large independent bookstores that depended upon city markets were closing down and being replaced by smaller shopping mall stores that couldn't carry backlists. They had to depend upon current books.

I tried to offset this problem by starting a project called the Reader's Catalog back in the mid 1980s. This was a telephone-size directory of some 40,000 backlist titles that you could order through an 800 number. The Internet wasn't yet commercialized.

The Reader's Catalog was a huge success, but we were losing money on shipping. It was very complicated, and I decided to give it up. Then Amazon picked it up and put it online - and it became Amazon.

That didn't solve the backlist problem, though. When digitization came in, I started to see there was an opportunity to solve it on a grander scale.

With digitization you can restore every book ever printed to print. You can have a vast - almost infinite - inventory at very little expense - and you can deliver a book anywhere in the world on demand.

What's necessary to complete this technology is a device, like an ATM, that can receive a digital file on demand anywhere in the world and print it out as a library quality paperback book.

(Reproduced with permission from Knowledge@Wharton, http://www.knowledgeatwharton.com.cn. Trustees of the University of Pennsylvania. All rights reserved. Shanghai Daily condensed the article.)