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By Kevin Keane, IAPHC CEO STOP! READING TMN ... for a wee moment And go directly to the IAPHC's website to read the proclamation from Canadian Prime Minister Jean Chretien, and US President Bill Clinton issued in honor of International Printing Week which is celebrated next week, January 16-22, 2000. As International Printing Week chair Dr. John Leininger, of Clemson University has exhorted all of us: "The holiday season isn't over until you celebrate International Printing Week!" And since you are there, (at www.iaphc.org) take a peek at the phenomenal photographic essay section honoring the eleven Best of the Best winners and their esteemed named award sponsors from the hugely successful 25th anniversary of the International Gallery of Superb Printing, which was judged in June of 1999. Kudos to good friends Dan Millsip of Renaissance Web Creation Inc. in Vancouver BC for the gorgeous section design; and to Chris Grajczyk, our photographer from Minneapolis, for the world class photos of the winners. Please note that our Sponsors websites have been hotlinked from this section, and as Vice-Chairman Ray Rafalowski reminds, "It's always good business to do business with firms who support our premier programs." E-Gads "As we look forward to the next century and the new millennium, technology must be a subject of very high priority on our action agenda. The pace of innovation is not slowing. New generations of computers and new means of communications are altering the way commerce is conducted and our lives are lived." Did we borrow the quote from some graphic arts industry pundit? No, we found it in the President's message, written by William Paul and addressed to the hundreds of thousands of attorney's who read the ABA Journal January 2000 issue. E-commerce is affecting every kind of industry. The Akron Club of the IAPHC welcomed Mr. Greg Hackett, of the MergerShop Inc as their presenter at their meeting in October. The November Club bulletin recounted his message as follows: "He determines that within five years, two out of three printers will be involved in a merger or acquisition or leave the industry. One is four is wondering what direction the company should take in the next two years. ... There are many reasons for strategic changes in the printing industry. Graphic communications has become mature, fragmented and cyclical. Competition is on the increase. Customer demands are accelerating. Over capacity is extensive. And technology is changing rapidly." Ray Roth, editor of High Volume Printing wrote about an intriguing new study in his December 1999 editorial. The study is called Book Industry Trends 1999 (www.bisg.org) and is written by Godfrey Rust. Roth quotes: "The web changes everything. It is a tidal wave of which we have so far only felt the advance winds ruffling a few palm trees on the beach ... When the tidal wave passes, our existing homes will be gone forever." Rust says the printed book will disappear, as surely as the 8-track gave way to the cassette, which was then supplanted by the CD, which is even now being rendered less relevant by the downloadable music from the Web. Could it happen to print? Is the progression from letterpress to offset to desktop to web re-purposing of content really all that different from what has happened to music formats? We have written in recent issues of TMN about the rapid development of printing books on demand from orders placed over the Internet in a quantity of one. From Libri in Hamburg, Germany to Barnes&Noble.com all over the web of the world, it is happening. Here in Minnesota, an entrepreneur named Don Leeper has formed Bookmobile.com, his concept is intended to eliminate book shipping from printer to retailer through a digital printing process. Having books in a database would mean overnight order fulfillment which is of increasingly crucial importance to online retailers. Leeper predicts that by 2004, 10 per cent of all books will be printed digitally, with sales of $1.6 to 3 billion. What is fun about all these predictions is that there are all most certainly wrong in some specifics; and almost certainly right in divining the general and unstoppable trend. Some five years ago, Nicholas Negroponte, head of the Media Lab at the Massachusetts Institute of Technology, was a key note speaker for the NAPL Top Management Convention in Phoenix. He startled more than one of his listeners that day, when he announced that print would be dead by 2000. Thus it was with great anticipation that we read the interview with Mr. Negroponte, in Heidelberg's issue No. 7/99, of print process magazine. Although he wasn't asked about the clear truth that the rumours of print's demise were greatly exaggerated, he still had some heavy water opinions on the Internet. "The Internet is the greatest invention of this millennium. And we've rarely ever witnessed an invention whose importance was so underestimated by its contemporaries. The Internet will bring peace and health to the world. It will do away with any form of nationalism, once and for all. In 20 years, the children of our children will have forgotten what nationalism means ... Access to the Internet should be an unalienable right, just like breathing fresh air." Whether you agree with Negroponte's vision of a wired world, wholly or not at all, is of very little importance. In all the hyperbole one reads regarding the Internet, it has changed the printing and graphic arts and it has only just begun. Just before Christmas The Rochester Democrat and Chronicle interviewed Richard Thoman, the President and CEO of Xerox. He was asked about the speed of transformation at Xerox and he replied: "In an Internet world you have to never be satisfied with anything around speed. But I think we have done a pretty good job at getting customer's acceptance of the fact that we can do this. ... The other thing to recognize is that in the analog world, you sold a copier, plugged it into the wall and it made copies. In the digital world, you plug it, but then you have to do a lot of things to make sure it operate on the network and the people are trained to use it and make sure the applications work." Mr. Thoman is absolutely correct about the latter point. The days of selling mere machines whether they were copiers of presses are over; now the sales person must be acutely aware of digital workflows. In an era of near full-employment in some sectors, it makes the challenge of finding the elite digirati employee that much more compelling. Heidelberg is aware of the challenge as well and announced a new entry level sales training program in the US, which we bet features a great deal of digital emphasis. Mr. Thoman is also delightfully honest --when asked about the disappointments of 1999 he noted: "In the process of centralizing our general and administration operations, we lost control of customer service and billing." This failing he pledged to aggressively manage and correct. Ruminations As we move into the millennial year, we have seen a number of questions popping up from IAPHC members which cause us to offer a few things to ponder and maybe add to your resolutions list. 1) Who controls the content? As we have said over and over, the content is no longer controlled by the printer, the content creator controls it. But what happens when the printer or prepress house or graphic designer or anyone else involved in the process, adds something to the content? Bluntly put, the law of digital media is still being written. At a bare minimum, every printer should review its written terms and conditions; decide whether to embrace the Trade Customs of the Graphic Arts; ask your attorney, accountant and insurance agent to evaluate your risks; or otherwise try to better protect its interests. This is not an abstract concern, we have advised a number of members recently who were aggrieved by content creators making off with the digital goods. 2) Whatever happened to Distribute and Print? Some observers of the auto industry are amazed by the seemingly reckless and industry-wide shift to SUV's which are inherently more thirsty for gasoline. We wonder if, in times of plenty, too many printers are being numb to the reality that Distribute and Print is happening (see printing books on demand item earlier) and that shipping printed paper costs money, much like gasoline costs money. If fuel costs rise, then so do shipping costs. How does a buyer reduce costs? Distribute THEN print. And Obviously the Internet makes that eminently possible. It seems to us that every individual printer ought to be looking to join with other like-minded printers in a global alliance that recognizes the truth that content can be re-purposed at any time, in any language, in any medium, any place in the world. (Apologies to Bowne & Co for slightly and admiringly re-purposing their Mission Statement!) 3) Benchmark me baby! The economic boom that has been enjoyed in the US and some other parts of the world for an absurdly long time is driven in great part by leaps in productivity. Yet, in recent years, well regarded persons ranging from Hal Gaffin, head of the Printing Management School at RIT, to William R. Davis, CEO of RR Donnelley & Sons, have assailed the poor productivity of the printing industry. When you are feeling good you probably don't take your temperature. Nonetheless, there are benchmarking tools available for the smallest quick printer to the largest commercial plant. It would behoove every printer to check their productivity temperature, and to do it now while riding the wave. From ratio studies, to sales per employee to peer group evaluations, use the benchmarks and boost that productivity number. 4) Watch the money, honey! One of our members was astonished to see how many revenue dollars were paid on credit cards last month. Surely that is a trend which is as unstoppable as e-commerce. As will be reported later in this issue of TMN, the paper industry has finally found a bit of pricing power. Now would be a good time to evaluate one's pricing because, sure and begorra, the prices you pay for paper are likely going up. While you are at it, make sure you have built the credit card discounts into your pricing philosophy. (Only the credit card industry could convince us that a fee paid to them, ought to be called a discount!) And also pay heed to Scrooge's Rule of Dickensian Monetary Wisdom: "The shop that sells on low margin, cashes the cheque first." 5) Read your TMN and call us in the morning. Seriously folks, that's what we are here for. Ours is an individual membership association, and it never ceases to amaze when one member in Timbuktoo helps a member with a problem in Tuscaloosa. We love to provide that linkage, if you'll let us. Pre-Drupa Debuts As one might have surmised there were not a huge number of new product announcements last year as people get set for the really big shew in Dusseldorf this May. There were a few (and even a few stumbles) that merit a mention however. Not surprisingly, most of these items concern the prepress arena as Content Control continues to migrate upstream. You might want to take a peek at GretagMacbeth's SpectroEye, a portable spectrophotometer, which further solidifies the firm's growing reputation as an excellent resource for color management tools. GretagMacbeth was a first time sponsor in the International Gallery of Superb Printing in 1999, maybe while ogling Fortran Printing's winning piece called Salonquest Aquage in the new Best of the Best section of CraftNet, you could link on over to GretagMacbeth's site to check it out. (www.iaphc.org/events/gallery/best99.htm) Everyone is talking about the exciting Prinergy joint effort from Creo Systems and Heidelberg, which leverages Adobe's PDF and Extreme architecture, to bring true control of digital workflows one step closer. Equally intriguing is the Valiano product from Fuji (another of our first time sponsors in 1999). Valiano is of interest to us as we have suggested for some time that every printer needs a Management of Information Systems (MIS) professional on the payroll in this digital era, and Valiano brings MIS into the workflow mix. Nonetheless, this writer's status as the world's worst press operator means we save the last bit of befuddlement for the press room. Maybe you saw it running at Graph Expo in Chicago, that dream machine called the Karat 74 digital press. Recall the words of industry observer William Lamparter when the press was discussed in concept form some years back: "Essentially a dumb press, which leaves little room for press operator intervention." Drupa should see the final refinements to this Scitex/KBA joint venture, but for now, imagine a press that is transformed into just another prepress output device, a glorious laser printer if you will. A machine capable of running up to 2000 impressions with virtually no adjustments. It's enough to make a press operator, even the world's worst, swoon. Design Side We have seen two reasonably phrased broadsides lately, railing at the advent of really truly world class lousy design. "At first glance it may seem strange to say design can increase profit margins, especially considering how much good design can cost. However, once you consider how many sales would be lost without effective design - and how much market share you would lose - it is easy to see how design can increase profits. Some estimates put design expenditures at more than $14.4 billion this year in Europe alone.... Research suggests more than 85 per cent of design projects recover their costs through improved sales, higher profit margins and lower manufacturing costs. Of these profitable projects, 47 per cent paid back their total design investment in a year or less." From an article by Dik Bolger and Susan Bennett of Bolger-Concept to Print, in the January 2, Minneapolis StarTribune. And from Bill Welch, of Ridgefield, Connecticut: "Companies take it on faith that employees should dress appropriately when meeting the public because it creates a good impression that helps business. Companies would benefit from taking the same attitude about the impression created by their printed materials. As more and more companies foolishly try to meet their graphic design needs by giving computers to untrained employees, the old caution takes on greater importance: 'Garbage in, garbage out.'" Copyright Welch, Inc 1997. Paper Trails From the New Zealand forests to the headquarters of International Paper, from the paper mills in Scandinavia to the Pulp Association in Montreal, the word is prefaced with a dollar sign, paper prices are on the rise. Last week Abitibi-Consolidated said from Montreal that it would boost newsprint prices by nearly 10 per cent on April 1, 2000, and Bowater, Inc quickly followed with its own 10 per cent hike. Abitibi said the new strength in Asian economies and a general increase in newspaper ads had led to increased demand for newsprint worldwide. The Consolidators Corral Late December saw mixed news on the Consolidation front and while some folks in the traditional printing industry might feel a bit smug over some of the indigestion being suffered by the rapidly growing consolidators, we would encourage any such persons to read the words of Mr. Greg Hackett in our lead story E-Gads, in this issue. They may have growing pains but the trend won't ease anytime soon. On December 21, Master Graphics, Inc. Announced a plan to return to breakeven cash flow by the first quarter of fiscal 2000. The same day, Consolidated Graphics, Inc. said it would not proceed with its previously announced acquisition of Pace Lithographers in Los Angeles and Everett Graphics in Oakland, California. CEO Joe Davis was quoted: "In light of the recent performance of our stock price, we have reconsidered the use of our capital and have determined that repurchasing our common shares in accordance with our recently announced repurchase program is most likely the prudent course of action." The next day Cunningham Graphics International announced that it had purchased five digital printing centers owned by the McGraw Hill Companies, Inc. The five centers are in Los Angeles, Dallas, Orlando, Cincinnati and Highstown, New Jersey.
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