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By Kevin Keane, IAPHC CEO The Game's Afoot for the Great Gallery Gopher Oyez, Oyez, Gentle Reader Persons all: Arises now from the Minnesota Tundra, the ghostly (some would say ghastly) visage of the Great Gallery Gopher. Punxsutawney Phil is a puny piker next to the relentless, fearless Gopher who will shadow you like the Hound of the Baskervilles secure in the knowledge that you have Gallery entries which need to get moving NOW. So go on all you goomba's, get them packed up and shipped off before the Great Gallery gophers you. Some Pithy Quotenips "Although in 1883 more than half the world's battle ships belonged to the Royal Navy, by 1897 only 2 of every five were British." Blood, Tears and Folly, Len Deighton, 1993. "Some printer's seem to think the future isn't going to happen." IAPHC member, Richard Lunde. David Howarth, managing director of the British printing e-commerce venture called printbynet.com has accused printers of being 'complacent fat cats more interested in flash cars than service to customers,' according to Printing World. (Part of this rant may be driven by the fact that several printers in the United Kingdom have accused printbynet of posting their prices for all the world to see.....) WSJ Bodyslams dotcom's Because the article is far too timely to lift mere snippets, we quote from the April 7 issue of the Wall Street Journal in an article penned by Lee Gomes titled 'Once Hot Business-to-Business Dot-coms Are Next Area of Web Worry' Mr. Gomes writes: "Consider a company called Noosh, Inc. Noosh's business plan calls for it to link businesses that need something printed, like brochures or reports, with companies that will put ink to paper. The ink Noosh itself is producing is red - par for the course in the Internet world. But Noosh has taken the New Economy business model one step further: When it filed to go public in January, Noosh said that it not only lacks profits, it also lacks sales. During its entire operating history - six months - Noosh has given away its service to its intended customers, the print buyers inside big companies. It hopes to convert them to paying users this year. Though Noosh is in its 'quiet period' and can't publicly comment, its IPO filing cites its early entry into its market as an advantage. The market is awash with Noosh-like startups all vying for a piece of the "B-to-B" market for printing. Impresse Inc., which is also hoping to go public soon, had revenue of $4,000 last year....... And venture capitalists have funded 37 different printing oriented business-to-business companies, putting as much as $75 million into some, says James Harvey of the Graphic Communications, Association, a trade group......'Right now, printing is a smokestack industry, but it has got to enter the Internet age,' says Frank Romano, who follows the industry at the Rochester Institute of Technology." Somewhere, one hears the gleeful printer exulting -- "See, they have no revenues, the dotcom's will never replace traditional printing." Oddly enough, there were some admirals in her majesty's service who thought that sail would never be impacted by steam; nor steam by diesel; nor diesel by nuclear power. Is the progression from letterpress to offset to desktop publishing to print on the net so very different it can ignore the lessons of history or suspend the imminent future? Remember what we wrote about WAM!NET in the March 22 issue of TMN: WAM!NET said in its IPO filing that it has 1,900 clients worldwide with another 6,800 using its dialup Internet services. These activities generated more than $17 million in revenues in 1999, while a variety of strategic alliances brought in another $220 million. That is real money, no matter how you slice it. Or consider the White Paper titled "Implementing a Transaction Based Net-Print Workflow" which is dated March 14, 2000 from Richard Burke of Imagery Consulting in Montclair, New Jersey, who wrote: "The Printing and Publishing industries have been slower than most to adapt their business to the Internet. This is not surprising since they have the most to lose. The industry has real fears about the future of content dissemination and how Generation 'Y" (the first to grow up on the web) will use the web." Mr. Burke's paper is excellent and offers a neat classification of the various players. In his section on Print Procurement he writes: "These companies provide secure environments to handle the transactions of the printing economy. They have transaction based profiles for printers and print buyers and typically allow these two groups to collaborate on printing projects and manage these projects. This virtual world was really the vision of Robert Hu of Collabria and Collabria was the first on the block to have a solution." We have written before of our admiration for Collabria and have noted that the roster of sponsors for the 26th Annual International Gallery has taken on a bit of an interesting dual cast -- new economy entities like Collabria and the Print on Demand Initiative have joined more traditional suppliers like Heidelberg, MBO America, Roto Press International and Mitsubishi Litho Presses all of whom are new sponsors this year. And lest the good folks at Noosh think we seem unduly negative towards their efforts, we congratulate them for bagging yet another major relationship. Noosh has done deals with Consolidated Graphics, Wallace and the Digital Art Exchange (DAX) and on March 24 said it had a three year deal with Moore Corporation. The agreement will allow Moore to process its print related projects through Noosh.com and allow the two firms to join in sales and marketing activities. And of course, R.R. Donnelley & Sons Co. Inc. invested $14 million in Noosh at the end of January. However, you slice it, Noosh is gaining access to a bunch of printing customers. Intriguingly, the very same page of the Wall Street Journal carried an article about the online exchanges which we labeled 'virtual trading posts' in the last issue of TMN. One of these virtual bazaars is PaperExchange.com which has deals with many major paper and forestry products companies including International Paper, Asia Pulp and Paper, and just last week, Bowater, Inc. one of the major newsprint providers. The WSJ article suggested that while these online exchanges have been popular, the companies agreeing to sell their products still feel a need for their own websites: "Other ICG partners are also trying to carve out their own turf. International Paper has promised to sell some products through auctions on ICG's PaperExchange.com Inc., but the paper giant has also formed a joint venture with Georgia Pacific Corp. and Weyerhauser Co. The three leading paper companies intend to build their own web site that will let buyers and suppliers do transactions online. John Balboni, vice-president of e-business at International Paper said that the company prefers to reach customers through 'intimate direct personal contact' on its own Web site." That might also be good a good strategy for printers who need to stay close to their customers. Live or Memorex? One of the things that has fascinated about some of the virtual print shops is: who the heck is doing their printing? On April 12, iPrint.com announced that it will provide "online custom printing services" to Atlantis Match Company, the leading manufacturer of advertising matchbooks in North America, producing some 3 to 4 million matchbooks per day. iPrint likes to call its technology a proprietary 'printing solution' but in fact what it is providing is an online ordering system for matchbooks which will still be custom imprinted by Atlantis Match Company. iPrint at one time was using BCT International to do much of its 'real' printing, and had a knack for upsetting traditional printers by claiming that the re-run rate in most conventional printshops was closing on 25% (were that true, most of those shops would be long since closed.) What IS relevant about iPrint is this next item from the news release. "iPrint.com's technology, branded under 'iKiosk,' is the first ASP (Application Service Provider) to provide a complete, self-service, 'interactive' kiosk creation system tailored for the professional printing and imaging industries. This online printing solution includes programming, hosting, order fulfillment, customer service and management reporting among other services. Private labeled iPrint technology is made available under each participant's brand name and image." If you haven't heard the term Application Service Provider before, write it down. It is the future direction of printers with the will to thrive not merely survive. As proof of this bold claim we direct you to the very well conceived Noosh.com website where you can read an interview with the head of Vio North America. Vio, a joint venture between telecommunications giant British Telecom and Scitex, defines itself as a global ASP for media production and distribution for the graphic arts community. Digital Divorce It was, of course, big news when CreoScitex came into official being on April 4, and even bigger news was made the very next day, when the new firm said it was ending a joint venture with Heidelberg, which partnership was most notable for the Prinergy project. The Canadian trade press reported on March 28, that Creo would continue to develop the Brisque workflow management system it had inherited as part of the takeover of Scitex prepress assets. As quoted on the PrintCAN website: "I've read a few journalists comments that there's no way Brisque and Prinergy can survive but there is no one size fits all," said Dave Brown, Vice President of Business Strategy for Creo in Burnaby BC. And of course, the end of the joint venture with Heidelberg may yield a net result of offering more options and more sizes to printers. CreoScitex has the highly touted Trendsetter CTP unit (albeit Heidelberg will probably still sell them under an OEM arrangement) but can also bring the Brisque solution to its full potential. Meanwhile, altho Heidelberg loses its exclusivity on four and eight page Trendsetters, it can still sell Prinergy and it will likely be able to introduce less costly CTP units for the large segment of small commercial printing shops who may be looking to move towards CTP. Digital DRUPA Dribbles It seems that quite a number of the press manufacturers have value in pre-releasing new product information prior to Drupa. One of the more futuristic ones marries CreoScitex thermal imaging technology into a 8 page digital offset press from Komori. This concept press will be unveiled at Drupa and will give Komori a digital offering to compete against Heidelberg's Speedmaster 74DI and MAN Roland's DICOweb digital press. Meanwhile Indigo said at the end of March that is had concluded beta testing on its UltraStream 2000 press and would introduce further enhancements in what it being called the Series 2 of Indigo's digital presses at Drupa. One of the beta users is Mark Pinson of All Ways Changing in Philadelphia who was quoted: "The UltraStream really does live match, or come very, very close to, offset press quality. All that while running twice as fast as its TurboStream cousin..." On April 7, Xeikon announced that MAN Roland would assume responsibility for Agfa's direct sales and service staff worldwide for Agfa's Digital Printing Systems (DPS) business pending integration of Agfa's DPS business into Xeikon. Rather like a three cornered baseball player trade transaction we suppose. The point is that MAN Roland will become involved in supporting existing Agfa Chromapress installations (except in the US and Japan) and means that MAN can leverage digital press sales and service knowledge into its sales team via the Agfa DPS employees. Despite all the pre-Drupa hoopla however, some firms have seen a slowing of sales activity perhaps a sign of people waiting for the big show. Xeikon said on April 6 from Brussels that it expects a first quarter loss on slower than expected sales. Industry Tidbits • On April 12 the International Monetary Fund said that the world economy will grow at a faster than expected 4.2 per cent clip in 2000. Coupled with increasing demand from economies in Europe and Asia that are enjoying the fastest growth rate in five years, means that paper companies are actually enjoying some pricing power. Merrill Lynch Co predicts that even the lowly copy paper grade will rise in price to $810 a ton by the fourth quarter, a 7 per cent gain since the first quarter. • Tata Donnelley, the largest printer and publisher in India, said on March 31 that Tata Sons Ltd has acquired the 25.37% stake owned by R.R. Donnelley & Sons Co., which frees Donnelley to narrow its geographic focus a bit. One result is that Donnelley will be opening two massive premedia centers in June in the US to allow it to better assist clients in managing content for multiple media re-purposing. • The AIIM 2000 Expo ended April 12 in New York City. We find it notable that two firms with old economy roots -- Eastman Kodak and Imation were there in force. Imation was showing off its expertise in helping engineering customers to transition from analog to digital; and Kodak was displaying its ever faster Document Scanners from its Kodak Digital Science line of products. The new Kodak scanners use Perfect Page Scanning and while the focus of these innovations is the enterprise printing market, in a day when printers must become ASP's, paying attention to the creativity from Kodak and Imation, both of whom know a fair bit about color science and digital technologies, makes good sense. • X-Rite has retained Broadview International to possibly look for acquisition targets; and Gretag, the Swiss firm which markets color management tools saw healthy gains in both sales and profits in 1999. Sounds like colour printing still has a future! • Harvey Levenson sends word that Cal Poly's Graphic Communications department is the recent beneficiary of twin $20,000 gifts from The Bowne Corporation and Quebecor World Press to establish new management laboratories which will carry the respective names of the donor firms.
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