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By Kevin Keane, IAPHC CEO Welcome There are a tremendous number of people receiving their first issue of Tuesday Morning News (TMN) today. We captured your e-mail address from the entry manifests submitted along with your recent International Gallery of Superb Printing entries. Thank you for your entries, and welcome aboard! Rodney Dangerfield has Nothing on Us! Talk about no respect: From syndicated small business columnist Paul Tulenko: "Most printers use a 'rate book' to calculate the cost of printing. It has been my experience that most of these shops are 50 to 250 percent too high. There are severally nationally advertised printing firms who will take a high quality photo of your art, do a color separation and print 1000 copies cheaper than your local shop can do it in black and white. Most of these shops advertise in the back of specialty magazines, so spend some time at your local bookstore." You may send your kind and gracious ripostes to www.tulenko.com A Digital Line in the Sand Last week, at the BPIF technical conference in Britain, consultant Andrew Tribute fired off this broadside to the printing community in the UK "go digital or die." Tribute cited predictions that the number of US printing companies would decrease by 20 percent in the next five years. Whilst we haven't seen quite so dire a forecast, there does seem to be a majority view that shops employing less than 20 persons or doing less than a million dollars in sales are those at greatest peril. The problem with all these Doctors of Digital is that while they can blithely issue a diagnosis that we are ill --go digital or die -- they are unable to prescribe the medicine to take to thrive or even just survive. It is in this arena where it will be interesting to watch how the digital arm of Heidelberg and the ever more digital Xerox position themselves. They can't merely say 'patient heal thyself,' and of course consultative medicine has one thing in common with consultative selling from a vendor -- it's expensive. Recognizing that reality was one of the reasons behind Xerox's recent restructuring to better serve certain distinct markets (graphic arts being one) with industry solutions. Last week Xerox CEO Richard Thoman was in the news often. First, because of the joint development agreement between Xerox and Microsoft to tie Windows NT into the Document Centre digital product line; and also because it was Annual Meeting time for Xerox shareholders. Thoman said on 20 May: "Every business conversation is supported by documents. And documents are the primary tool for sharing knowledge, within a workgroup, between virtual teams, among operating units and customers around the world. The challenges around knowledge sharing all play to our strengths." Speaking of Annual Meetings, several issues ago in TMN we wrote about a company called Zamba, Inc which had foregone a fancy printed annual report in favor of a very stripped down, one color, no graphics, no photos, toner on paper document. Last week Zamba announced that it would hold its annual meeting not in a hotel room or auditorium, but on the Internet. Our fearless prediction? They won't be the last! The Amazing Morphing Printing Biz The obvious conclusion that one can draw from observing graphic arts businesses trying to heal themselves is that they are rarely content to remain only prepress providers or only printers. Applied Graphics Technologies has been struggling to regain its stride. And it is doing so by exploring new venues outside its former core competencies. Illustrating this point, AGT Chief Executive Fred Drasner was quoted on 13 May: "Our performance under the contract with Fujifilm continues to exceed our expectations and is establishing our capability in the e-commerce arena which is one of our strategic areas for growth....To date we have installed our system in 205 stores of a major retail photographic chain and are installing additional systems in this chain of 900 stores....In addition to the revenues from software, sales of the systems, systems installation and training we have a recurring revenue stream for system maintenance and web site hosting. Additionally we earn a royalty for every file uploaded to the e-commerce site and every CD product that the retail chain's or Fujifilm's customers order. We believe the system we have developed for Fujifilm and its customer has applicability throughout the retail photographic and photolab industry. More importantly we believe the system's features will enable us to further develop applications in e-commerce for the customers we serve in our digital asset management business." emphasis added. R.R. Donnelley Financial is also stretching the envelope. On 19 May it said it had entered into a strategic partnership with Silicon Valley based PostX Corporation to use PostX Express e-mail delivery service for first class business e-mail. The PostX Express service is based on the firm's PostX Envelope system which allows participating businesses to create interactive Java based password protected containers to deliver information over existing e-mail. A PostX Envelope is a secure electronic envelope that looks exactly like its paper cousin, including a stamp, a return address, date/time stamp and optional branding elements such as logos and graphics. It can be used to deliver a variety of electronic documents directly to customers inboxes offering increased privacy. In the last issue of TMN we wrote about the US Postal Service testing Mailing Online which can accept a customer's direct mail piece and mailing list directly from the customer through the PostOffice Online internet service web site. The data is then forwarded to a Boston area digital printer who prints, folds and distributes the mail piece to the requested mailing list. For US printers who have long been up in arms over the USPS selling printed envelopes with the postage already affixed, this was another indignity. The former NAQP, now PrintImage has squawked, as have individual printers. One member provided us with a 13 May e-reply from Ben Cooper at the PIA: "The project in question is not designed to compete with printers but to provide market opportunities for small printers with digital printing capacity. This is a test program supported in its concept by PIA and PIA members. Originally, the USPS suggested they would do the printing. WE convinced them to do it with private companies. If there is a group of companies which might have a legitimate concern it may be companies who design mail pieces. There may be some competitive threat there. Since the USPS is not a typical federal agency, it is virtually impossible to prevent their moving into areas of this type, but we think there may be some long term potential for growth in printing through this program." Bowne & Company is yet another old line printer seeking to recast its fortunes in the brave new digital day and age. Carl Crosetto, Executive VP of Bowne was interviewed by Reuters in Singapore on 12 May. Bowne has traditionally been viewed as a financial printer. But the vagaries of the market have meant some cyclical ups and downs for Bowne. Crosetto said the company wants to add new services so as to minimize the cyclical nature of financial printing which still accounts for 80 percent of total revenues. (Bowne controls 42 percent of financial printing worldwide) "That will change. Our core business will remain the core. But when we grow, our goal is to grow our company in the year 2000 to be a one billion dollar company, that growth really has to come from outside financial printing." By the way, the 10 May issue of Business Week magazine carried a glowing endorsement of Bowne, money manager David Rocker says he feels that Bowne is worth twice its current share price. As the number of publicly traded printing companies continues to increase, a reader may want to file away Rocker's valuation assessment -- in the case of Bowne, the printing operations are being valued by the market at $10 a share, or only six times the $1.65 a share earnings from printing operations. Rocker says Bowne's printing deserves a price-earnings ratio of 15. Another facet of the changing face of printing could be seen in the array of players at the On Demand Show in New York City earlier this month. It isn't just Donnelley or Quebecor or Moore or Banta to which one needs to pay heed. It's companies like Standard Register and Ikon and DSI and Xerox and Pitney Bowes. The latter firm announced a week after the On Demand show that it had entered into a contract through its Pitney Bowes Management Services (PBMS) division to provide Catapult Inc (an IBM subsidiary) with a comprehensive digital document management solution for producing and distributing all of Catapult's training materials on an outsourcing basis. According to PBMS, its Document Services group designed and proposed a complete re-engineering of Catapult's overall process, implemented it and now manages the process, which includes managing Catapult's digital document library, accepting custom electronic orders for targeted course materials and producing literally millions of training manuals on demand. The later part of the above sentence defines the digital printing industry of tomorrow. Are we ready? Other Industry Tidbits The Print On Demand Initiative (PODi) based in Rochester, New York, is directing the development of a software standard to boost throughput of digital printers. The widely supported industry group, the Personalized Print Initiative hopes to have a standard published by this Fall. The new interface to digital printing devices is intended to enable high speed production of personalized pages that have heavy graphical content. When the standard is complete, printer manufacturers are expected to introduce compliant printers in both color and monochrome models, in a variety of speed ranges and price points. Among the participants in the development of the standard are Adobe Systems, Barco Graphics, EFI, Indigo, NexPress, the US Postal Service, Scitex, Varis, Xeikon and Xerox. In a recent issue of TMN we wrote about PrintontheNet.com. The Miami, Florida based firm announced last week that it has struck an agreement with a Romanian commercial printer which will allow European companies to design and order their printing needs over the Internet. PrintontheNet.com, a subsidiary of NetLynx, inked an alliance with Luceafarul, a large commercial printer in Bucharest, Romania. Creo is set to sell 4 million shares in the US market with an offering price of $13 to $15 per share. Creo also reported that in the six month period ending 31 March, 1999 the firm had sales of $78 million and enjoyed hefty pretax profits of $13.7 million. Xeikon also had a decent quarter ending 31 March. Revenues were up 40 percent and net income was up 47 percent. Perhaps more importantly, Xeikon announced that it had completed its previously announced acquisition of an 80 per cent equity interest in Nipson International S.A. a company which makes black and white printers based on its patented 'magnetography' technology. Obviously, Xeikon could see that the recent acquisition by Heidelberg of the Eastman Kodak black and white DigiSource 9110 technology to complement the NexPress color press made it valuable for Xeikon to round out its product line of digital color presses with a black and white technology too. On 14 May, Scitex Digital Printing, Inc. (a subsidiary of Scitex) announced the sale of its first Scitex VersaMark Digital Book Printing System to The Mazer Corporation a Dayton Ohio based educational publishing services firm. The VersaMark system is capable of speeds of nearly 2,200 pages per minute, with a print resolution of up to 600 dots per inch and a per page operating cost of under a tenth of a cent. Mail-Well, Inc., said on 19 May that its Porter Chadbourn subsidiary would be acquiring Design Mark Industries from Ferguson International PLC in London. Design Mark is based in Wareham, Massachusetts and makes pressure sensitive labels and graphic overlays. Mail-Well is rapidly becoming a real force in the label segment. Los Angeles member Chris Jacobson reports that the recently concluded 27th Annual Gutenberg Festival was a grand success, both for the 400 exhibitors and the 30,000 plus attendees as well as for Chris' company Gutenberg Expositions which announced that the Gutenberg Festival had been acquired by the Graphic Arts Show Company, which in turn, has retained Chris to continue to manage the growing festival. And finally, on 14 May, Silicon Graphics announced its participation in a pilot project co-sponsored by several Canadian cable, and telephone and Internet Service Provider companies along with the Government of Quebec that will ultimately provide free, Web-based email addresses to all citizens of the Canadian province. The project is called the Courrier project.
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