Deal Radar 2008: Blurb

Blurb gives individuals and groups the ability to create, publish and market professional quality photo books. Unlike offset printing, they can publish just one copy or thousands, bringing book publishing to the masses. The self-publishing and print-on-demand industry is starting to become a meaningful alternative to the older, slower, more traditional publishing model.

Blurb’s process is fairly simple, whereby users download the company’s BookSmart software, add their own photos, artwork and text, design the book according to their creative concepts and get the book printed for prices starting from $12.95 for the most basic softcover. The site offers users several suggestions and answers common design and layout queries in their FAQ section. The company also offers a ‘Set Your Price’ program, where users are allowed to create and sell books for profit through the Blurb Bookstore. Users can keep 100% of the profit they make through the sale of their books.

Blurb was founded in 2004 by Eileen Gittins, President and CEO. She previously was with Kodak, Wall Data, was CEO of Personify and Verb, before starting Blurb. The company is headquartered in San Francisco and had expanded into the European market in 2007, setting up a printing, binding and shipping location in the Netherlands. Today international sales account for 20% of Blurb’s revenues.

In May 2005, Blurb raised $2.05 in Series A funding from Canaan Partners and Anthem Venture Partners. In August 2006, Blurb received its Series B round of $12 million from existing investors and other participants. Its total financing to date is $16.55 million, including a $2.5 million debt from Hercules Technology Growth Capital, as reported on CrunchBase.

In 2007, Blurb claims to have produced nearly 80,000 unique titles. As a result, the company doubled in size every three months last year and was selected by AlwaysOn as ‘OnMedia Top 100 Winner.’ In April this year, Blurb received the Webby Award for the “Best Services Website for 2008,” selected from among 10,000 entries. The Webby Awards have been hailed as the “Oscars of the Internet’ by The New York Times.

In an interview with Eileen Gittins last year, she mentioned Blurb’s expected revenue would be approximately $5-$10 million for 2007. She has declined to comment on the actual revenue number since then.

Blurb’s competitors Lulu and iUniverse concentrate more on creating books out of manuscripts. iPhoto on the other hand is similar in allowing users to create photo-oriented books. Picaboo is also a close competitor. Another formidable entrant into the print-on-demand market is Amazon, who got into the business by acquiring BookSurge. Finally, the company that has the most active photo books business at scale is Shutterfly. You can read my strategy discussion with CEO Jeff Housenbold to gain insights into the dynamics of their business.

The biggest weakness in the entire self-publishing industry is marketing. As long as you are publishing a book for limited distribution (friends and family, clients, blog readers), you can use self-publishing services like Blurb. But if you want to get access to broad distribution, you would either need to work with a regular publisher, or with Amazon, who does have access to the best online marketing channel in the world.

Meanwhile, Blurb remains a good niche business, and as the book publishing industry goes through its own process of disruption and re-organization, Blurb will find a home inside either one of the major publishers, or a retailer.

This segment is a part in the series : Deal Radar 2008