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By Kevin Keane, IAPHC CEO Check it out We printers can be a myopic lot, a fact borne in no small part from our obsessive evaluation of the register on sugar packets and menus at the neighborhood restaurant. But sometimes our close inspection yields some interesting nuggets. We saw some tidbits printed on checks written by printers recently (they still print checks, don't they?). From member-at-large Mike Stevens of Express Press in Fargo, ND -- "Locally owned, our roots are here, not our branches." And on several printers checks from the Silicon Valley Club membership who happen to do their banking at Bank of America: "Valued Customer over 25 Years." There's a lesson or two in those little statements. Parable of the Puny Pimento With apologies to the perspicacity of Mr. Greenspan, inflation has been at work for years in the tiniest of places. The lowly pimento has been sold, either sliced or diced, at the local warehouse grocery as long as this writer has been learning to cook. Learning being the operative phrase. Seven years ago, a jar cost .49 cents, today it costs .73 cents. That's a 49% increase at the so-called value priced emporium. And 49% divided by 7 years means an average price increase of 7 per cent per annum. We wonder how many printers can say they have raised their paper prices (that lowly yet crucial commodity item we tend to ignore) 7 per cent each year for the past seven years? Are you nuts, says the gentle reader in wounded objection--how in the heck can we raise prices in this era of dotcom mania? And indeed the pundits bemoan the advent of the dotcom print bazaars because it is said they merely serve to carve margins to the bone, while encouraging price wars. Andrew Pindar, chairman of Pindar was quoted in Printing World magazine in Britain at the end of June: "I think it's a flawed concept. I fundamentally believe in online trading, but not in print farming (using auction services). Printers should be using the Internet as a branding tool to boost their own sales." As it happens, this writer was a speaker at the IPA Prepress 2000 seminar in Chicago in mid-June. We also had a chance to moderate a panel of print e-commerce experts including old friend Robert Hu of Collabria and new friend Scott Houck of Noosh. Some of the inquiries from audience members were pointed in asking about strategic direction. It seems clear that there is a growing division between what the Print On Demand Initiative (PODi) has labeled the Print ASP (application service provider) segment and the Click and Print segment. Collabria and Noosh are Print ASP's while iPrint.com is Click and Print provider. The latter type is seen as a threat by many printers, (what Mr. Pindar called 'print farming') and one of the interesting questions phrased in Chicago was whether Impresse.com was morphing from an ASP to a Click and Print model. In specific, one questioner wanted to know if Impresse was going to focus its marketing efforts entirely upon print buyers. The reply was light on its feet. What is revealing however, is that on June 27 Consolidated Graphics said it would make the Impresse.com service available to customers at all 63 Consolidated Graphics plants. Nimish Mehta, president and CEO of Impresse said: "Through this association with Consolidated Graphics, the impress.com service will be made available to the company's network of customers. As a result, both the print buyers and printers will benefit from the use of the impresse.com service." Rock singer Sting is a soul searching lad of introspection laid bare --witness his "Losing my Religion" dirge. It seems the dotcom firms are in a similar uncharted place. If they align (and ally) with printers they may help said printers to use the Internet as a sales building branding tool as urged by Mr. Pindar. If they lose their religion and go direct to the print buyers, the wailing and gnashing from aggrieved printers will be heard by you and me, but will the buyers really care? The outcome of the battle between the PrintASP's and the Click and Print folks is still in doubt. And many printers seem to be ignoring the war. According the Fast Fact #80 from TrendWatch, only 4% of all print businesses are even using a dotcom company. But the battle is real and raging and real printing jobs are going somewhere. On July 5 iPrint.com said it had signed a deal with CourseNotes to provide back-end digital copying and fulfillment of school course materials that will allow students and teachers to quickly and easily order required reading materials. Kinko's has been in that business for years. This is a real printing job that could have gone to a traditional printer, but..... The fact that this is a digital copying job, which will essentially be printed "on demand," is also instructive. Joanne Vinyard, director of the Digital Printing Council at PIA is co-hosting a Digital Printing and E-Commerce briefing next week. She said: "Digital Printing and e-commerce are two of the hottest topics in today's industry that have an impact daily on our members. In essence, they are made for each other." Meanwhile, back in Europe last week, accounting consultancy PriceWaterhouse-Coopers exhorted magazine and newspaper publishers to sacrifice traditional print media forms to focus on Internet based strategies. Our advice? The wise printer will use the Internet as Mr. Pindar suggests -- to build brand awareness with the certain recognition that new clients are welcome no matter where in the world located. To do this, said wise printer will align with an ASP provider that wishes to help with a privately branded web site that builds value perceptions for the printer's clientele. This alliance between the ASP and the printer will not be transparently obvious to the client --it will be opaque and respectful of the human interactions that brought the client and printer together in the first place. And it will help the printer charge a fair price for value added. And now for the coup de grace: the wise printer will further understand that she must align with not only a brand and sales building ASP, she must find like minded printers and form alliances with them as well. The ostrich syndrome of solo operation in a vacuum is over. On June 22 Bowne and Co Inc showed how to do this when it announced it had formed an exclusive strategic affiliation with Zadok Press, Israel's leading financial printer. Zadok gains access to Bowne's financial printing expertise while being able to still provide its accustomed level of quality printing locally. In turn, Bowne can assure its global roster of clients that it can perform as well in Israel as it can in New York, Toronto or Singapore. We remind you of the quote we shared from Bill Lavelle of Impresse in the June 8th TMN, "For printers to fully capitalize on e-commerce, they need a total business approach, not just a front-end application connecting a shop to the Internet." All of which just goes to prove: if you want some pimento with your printing, we will have to charge you for the value added. Dementia, Denial and other Digital Illnesses The facts are sort of immutable. The world economies have been bustling or roaring or even ballooning depending on where you are located. So it seems only logical that print sales should be a mirror image to this growth. On June 10 the PIA said that in 1999 the U.S. printing industry generated over $155.7 billion in shipments, a 4.2% increase over 1998, but at the same time the number of printing establishments declined from 51,305 to 49,410. Now hear this: Consolidation isn't the only cause of this shrinkage in printing businesses. Some folks are being capsized by the digital tidal wave. With economies on a roll, printers ought to be rolling too. But to ride the wave, instead of being pounded into oblivion, requires change. On June 24th Barron's wrote approvingly of the prospects for RR Donnelley & Sons Co, noting that the firm is expanding beyond the printing of magazines and books and other materials, with units (see the May 25th issue of TMN about redroverdigital.com) that help customers with their Internet sites, and it says as much as 60 per cent of its revenue may come from non-printing sources over the next several years. The SuperCalendered paper folks (SC Council) commented in its current newsletter SC Council Advantage about Donnelley at Drupa. "Show buzz rumored that R.R. Donnelley might become the largest e-commerce provider when it launches Digeno this summer - an Internet means of simplifying transactions between all printers and printing buyers." And Digeno should not be confused with Agfa's Delano product which Agfa is developing with QuebecorWorld (see May 25th issue of TMN.) Britain's Printing World magazine recently carried a none too optimistic interview with Brian Dudley the Chief Executive of Bezier. Mr. Dudley, whose firm has closed two plants and gone from a firm that six months ago printed 450 million greeting cards per year, and now prints none, pulled no punches in his assessment of the industry and its future prospects. "In all the time I've been in printing, I don't think I've heard the expression 'return on investment' in any normal financial criteria that you would hear in any other industry. Part of the problem is there is less professionalism in the industry as many people start from the shop floor. Many managers lack the skills that are needed to run a business." Mr. Dudley went on to forecast the demise of half of the 18,500 printers operating in the United Kingdom today over the next three or four years. He says printers need to be able to offer much more than merely ink on paper in order to survive. The article continued: "Mr. Dudley reads the pages of Printing World with dismay at the news of all the additional Drupa equipment signings meaning more capacity to drive down margins. 'It amazes me that a small printer making margins of less than 5% can go to Drupa and spend 2 (million pounds) on a press. It's madness.'" One print related firm which is aping Donnelley's drive to diversify away from printing, is IPI, Inc the franchisor of Insty-Prints and Dreamcatcher franchises. The company reported in an 8-K filing that it had spent $6,200,000 to buy one million shares of Conseco during the second quarter of 2000. On Monday, when Conseco was the most heavily traded issue on the New York Stock exchange, the stake of IPI had nearly doubled in value. Buy lo, sell hi. And Diversi fi. EEK! more e-threats erupting At the PC Expo in New York City last week, Franklin Electronic Publishers showed the first e-Book reader to be priced less than $150. The prototype of the eBookMan is based on the typical width of a column of newspaper or magazine type for ease of reading. That's smart marketing/ergonomics and we suspect the $100 pricepoint will arrive soon. Meanwhile, the Washington Post reported on a study called "E-Mail Behaviour in the Workplace." The study avers that e-mail is trimming the need for everything from postal carriers to fax machines. The May survey of some 1,000 office workers found that 80% say e-mail has replaced snail mail for the majority of their business correspondence; 72.5% say it has replaced faxing; and 45% say it has replaced phone calls. And if you need proof gentle reader of the eeefluenza, consider the news that the U.S. Postal Service would like to create an e-mail address for every citizen that would allow then Jane or John Q Public to track and reroute their regular mail over the Internet. "We have a tremendous opportunity to create value on the Internet and because of our ubiquity, to help people do business on the Internet," said John Nolan, Deputy Postmaster general on June 30. Nolan quoted some of the most pessimistic forecasts that predict up to 2/3rds of the revenue from first class mail could disappear over the next 10 years due to the Internet. As a result the USPS (and printers might take their lead from an entity that has been a legend in stodginess) has formed partnerships with two online direct mailing operations --zipem.com and eletter.com to offer small businesses direct mail targeted at their clientele. Indeed, several readers of TMN are currently developing a powerful method to manage the migration of direct mail to the Internet. The simple fact is that all printing is becoming ever more digital and occasionally on really unusual substrates -- On July 3, British Science Minister Lord Sainsbury christened Cambridge Display Technology's brand new futuristic research lab. The primary product of the lab is a plastic screen which use light emitting polymers (LEP's). The firm thinks that these printed screens can replace the familiar liquid crystal displays. Seiko Epson has managed to make the screens just by printing them on an ink-jet printer. On our preferred substrate of paper, more and more mills are making digital grades available. Neenah Paper announced on June 23 that its popular Classic Crest line is now available for the most commonly used digital presses -- Xeikon, Heidelberg and Indigo. Industry Tidbits Xerox announced on July 6 that it had agreed to license its brand of office papers to Georgia-Pacific Group, which will give the world's largest copier firm a coast to coast distributor in Canada and the U.S. G-P's Unisource division will sell the paper under the Xerox brand. Canopy, LLC the newly formed joint venture between PrimeSource Corporation and Xeikon NV, announced on July 6 that it was introducing the PDF ProofStreamer, a tool to allow digital printers the ability to create on-screen pre-flighting of variable data, imposition and traditional jobs for Xeikon digital presses before they are delivered to press. Canopy has a new website at www.canopyprint.com). In the last issue of TMN, we wrote about the Ryobi 3404DI which was a joint development between Presstek and Ryobi. Presstek is also very much involved with the five color internal plate cylinder PAX DI press which was developed by Presstek, Adast and Xerox. The PAX DI was touted in the Xerox pavilion at Drupa as the first true press in Xerox's offerings to the commercial print segment. Some 65 non-binding orders were placed for the PAX DI during the Drupa run. In the first quarter of 2000, five major consolidations worth some $22 billion took place in the paper industry. On July 3, the beat went on as Fletcher Challenge Ltd said from Auckland, New Zealand that its shareholders had approved the $2.5 billion sale of its paper division to Norske Skogindustrier ASA, which now makes Norske Skog the world's second largest newsprint maker behind Canada's Abitibi-Consolidated.
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