|All right, so I’m emotional but I still get a warm and fuzzy feeling when I hold a printed page in my hot little hands. And reading a nicely bound book or well-printed magazine on the whatever still beats looking at a screen or fumbling through a bunch of loose pages you just printed on your ink-jet. I could go on about my love for print, but look who I’m preaching to, the flock. Well if I’m going to stand on this pulpit and preach, it better be reality. After all it’s not the mission of this column to tell you what we all like to hear, the continuation of the printing industry as we now know it. The stated purpose of this column is at least an attempt to tell you where we’re going, reality, wither we like it or not. Actually, since nobody can predict the future, we’re really talking about an educated or best guess. However I stand in the company of those far more knowledgeable than myself when I say that the continuation of the printing industry as we know it isn’t going to happen. There are just to many forces at play which will have dramatic impact on our beloved business.
We have come far from the gift Gutenberg gave us but the changes facing us in the early part of this century could in a few short years outpace what took hundreds of years. Let’s take a brief look at a few of the culprits that will cause these traumatic changes.
The first question is will paper survive the challenge of e-docs, e-books, and all that e-stuff. According to PIA the answer is yes. Before you breath a sigh of relief the projected growth rate for paper over the next 6 years will be slightly more than 2%. That’s not much in a growing economy. Plus there are outside forces consuming some of this paper. For example, how about the desktop digital printing factor I discussed in the last column. Inexpensive laser printers that can print with quality 11” x 17”, 4/c, two sides, at speeds of up to 300 per hour now and who knows what in the near future, will consume a growing amount of that small paper growth. And this is one segment of print on demand that leaves the traditional printer completely out of the loop as former customers print what they need, when they need it themselves. OK, so that doesn’t worry you because the quantities are so small as to be insignificant, not true. Consider this example. Headquarters has to get a new sell sheet to 1000 divisions. The old way was to print a couple of hundred thousand brochures and send them to each division. The waste was enormous as each division put most of the assumed quantity in inventory to be thrown away later. Now headquarters sends a PDF and each division prints what they need, when needed on their laser printer. Plus they can customize it, or personalize it and changes can come from headquarters in a flash. This scenario will go even further as companies post or send e-docs, e-books, and e-other stuff for their customers to print on their home ink jets or office lasers. This is not a future prediction; it is happening now and has been for a few years. What is the future is the growing encroachment of this scenario.
We all know digital printing usually associated with print on demand will enjoy significant growth in the next couple of years. And to my thinking digital presses (electrophotographic) and DI presses (direct imaging presses) will help stem the onslaught of e-doc competition. For example the ability of digital presses to efficiently print one four-color book could be a key factor in keeping book printers active. This is a tremendous development for publishers as they don’t have to gamble with inventory, particularly on color specialty books. It’s also great for me the customer because I have a real book in my hands and I don’t have to tax my ink jet and my wallet, paying for all those cartridges. However while it’s a great development for the book printer it constitutes a change that’s far more extensive than just adding a digital press. In effect, it changes the way the book printer will interact with their customer. This change the book printer will experience will be similar to the changes faced by the rest of the printing industry. So when we look at the example below it probably applies to all of us.
The vast majority of printers, including most book printers, are venders rushing out to clients to secure that print job. The awarded job came in the form of a file that the printer output, massaged, printed, bound, and perhaps distributed with direct mail capabilities or some other method. Like the rest of us, the book printer would receive an order to print and bind 10,000 copies of a particular job in this case let’s say it’s a full color book titled Waldman’s Brilliant Predictions Illustrated. The market for this book was vastly over estimated with the only potential buyer being Mrs.Waldman. The book printer can now effectively print one copy on a digital press. In the future books could be printed as needed because Mrs. Waldman throws her copy in the trash when she’s angry with Mr. Waldman. She buys another copy when he begs for forgiveness. Over the course of time they might eventually sell the 10,000 books but printing as needed saves inventory, relieves tied up capital, and eliminates the need for guesswork. Plus the book can be easily updated as new editions are written.
In the above situation, the traditional vender, customer relationship probably wouldn’t work as well as an alliance. Orders would come thru the Web and the printer would be performing other services than just printing. All this could be happening on a 24 x 7 basis. The key point, much of the printing business is going to move from manufacturing to a service tied into clients through the Web producing just in time-customized products.
Large printers like R. R. Donnelly are redefining themselves. Donnelly is now generating 25% of its business from non-print and would like to see that grow to 50%. This is much easier for the larger printers than the vast number of small printers that comprise the industry as we know it today. The small printer is immersed in their craft and in so many cases is looked at as merely a vender by the customer. It would be very difficult for the average small printer to make some of these monumental changes and perhaps almost as difficult to market them to their customers. It’s hard for so called venders to change the way customers do business. Unfortunately, a printing conglomerate, one of these Internet organizations, or somebody else will come in with a whole new plan and the vender maybe left out. Does that mean the traditional printer is going to meet the fate of the typographer? Perhaps not, but a shrinking market can create some fierce, unprofitable battles over what’s left. So what you probably will see is a great deal of consolidation and shake out.
If you really want to get some solid insight into all this, go to Cap Ventures Web sight www.capv.com. Charlie A. Pesko Jr. Managing Director of Cap Ventures delivered quite an interesting keynote at the On Demand show in New York. He gave a great presentation on what the new printing and publishing economy might look like. As of this writing the talk is available as a PDF.
Perhaps this wasn’t the most optimistic column, however far brighter minds than mine are telling us that printers are going to face some of the most difficult choices in their business history. But I do have a great deal of faith in the resourcefulness of this industry. The entrepreneurial spirit that is so wonderfully ingrained in this great industry will hopefully prevail as printers face the hard choices and make the necessary decisions as difficult as they may be. And, as always, there are many opportunities for those that realize what is happening and construct a well thought out plan. Industry experts are saying that in order to grow and stay profitable that plan should include related non-print services and the development of strong customer alliances.
Let me know what you think.