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Graphic Industry News with a Piquant Point of View 7 March, 2001 Et tu, Oscar? If you were watching the TV Guide awards show broadcast by Fox television on 7 March, you may have noted that the "and the winner is" envelope has disappeared to be replaced by the REB1200 e-Book reader. Take a moment and think about that. From Dot Comet to Dot Kaput A publication we regularly read published a nice story in its February edition about the Printbid.com online marketplace (auction) service. On 1 February, Printbid announced that all marketplace activities had ceased and that the service would no longer be available after 2PM on 8 February 2001. "We appreciate the opportunity to have served you, " said the e-mail announcement. Printbid was a service owned and operated by ImageX.com On 1 March, Goprinter, the Carol Stream, Illinois based provider of e-commerce solutions to manufacturers and distributors of printing supplies such as paper, film and ink ceased operations as well. Some upheaval (a.k.a. 'shakeout') among the dot.com providers to the printing and graphics arts industry was to be expected and indeed, the shakeout is occurring. But what is surprising, is that no one true path has been illuminated as yet. No one solution appears to be the one that all vendors of graphics e-commerce will be mimicking. Is the auction model dead or alive? Print centered only? Buyers and Suppliers? At the recently concluded On Demand Printing & Publishing Strategy Conference the conspicuous absence of five of the pioneering firms in print e-commerce seemed to offer proof that the venture capital spigots had been turned off for several of the early evangelists. At the same time, a series of new alliances were trumpeted at On Demand: IKON Office Solutions announced that its Digital Express 2000 print e-procurement service would be offered in conjunction with ImageX.com's solutions (the Corporate Online Printing Center) for office stationery and business cards. Rich Begert, president of ImageX said: "By collaborating with IKON, we gain immediate access to a tremendous number of customers looking toward e-procurement." IKON has a reported 350,000 customers. Meanwhile, iPrint was scoring its own coup, first by obtaining agreement in January and announced on 20 February that Oracle Corporation would have its 25,000 employees use iPrint's iProcurement solution for ordering items such as Oracle employee business cards and stationery items through the Oracle e-Print Center (and via an Oracle Intranet), and then on 5 March, by gaining agreement that all of Oracle's corporate customers will be able to order printing services from iPrint. Royal Farros, the iPrint CEO made an interesting comment: "Oracle saved $1 billion last year using its own e-business suite and wants to save $2 billion this year. Printing is still one of the largest areas of corporate expenditure and we're excited to help Oracle achieve this noteworthy goal." Printers need to be aware that they will be dealing with more and more price conscious clients. Not because of any recessionary trends, but because e-print purveyors are teaching the economics of print to those clients. This is not a bad thing if one uses it to advantage. Robert Hu of Collabria has written: "Before desktop publishing, prepress accounted for 15 to 20% of printer's costs. Today they make up 20 to 35% of those costs." Mr. Hu thinks that printers have to interface with clients much earlier in the buying process, thereby minimizing problems before the project arrives on the pressroom floor and by thus reducing prepress costs, they will enjoy improvements to their bottom line. On a related point, we urge you to notice that both the IKON/ImageX.com and the Oracle/iPrint alliances are based heavily on the simplest of printing needs -- business cards and stationery. We have long felt that savvy printers will compete for these basic items because they can be the keys to the kingdom -- i.e., the rest of the client's print budget. Last week an independent grocery chain in the U.S. called Rainbow stores said it had enjoyed a very successful cost cutting campaign by involving employees in the process. That involvement, among other things, had reduced the cost of purchasing business cards from $1.50 to 6 cents each. Maybe the mundane business card needs to be revisited. Peter Posk, VP of Marketing for BCT International dropped us a note the other day pointing out that BCT has over 6,200 corporate accounts using the BCT site (Orderprinting.com) and they are adding 15 new companies per day. They process more than 1,600 orders per day. (30,000 orders in January alone, which is a 263% increase year over year.) As a wholesaler, BCT offers its site to commercial printers free of license or transaction fees. Peter is at peter.posk@bctonline.net if you would like to ask him about anything. Meanwhile, as part of his keynote address at On Demand, Heidelberg CEO Bernhard Schreier announced that Heidelberg will introduce its own e-commerce solution at the CeBit technology exposition in Hanover, Germany later this spring. Schreier said Heidelberg would not countenance an auction solution, or one that has the effect of encouraging price competition. As mentioned earlier, the fact that a major player like Heidelberg will pursue its own e-commerce solution reaffirms that no single answer has yet been adopted by the industry. The mating dances of new partnerships and changing casts of characters will likely continue for some time. For example, printCafe announced at the end of February that it had hired several sales professionals formerly with Noosh and Impresse, the latter of which has been downsizing. Less than a year ago, in June of 2000, a number of the leading firms in print e-commerce formed the PrintTalk consortium to define a communications interface that allows job management data to flow freely and openly among all graphic arts products and systems. In mid-February, Sunset Stationers implemented the first such system -- the PrintTalk specification integrated into the Collabria solution. Sunset Stationer's based in Wharton, NJ, is a commercial printer specializing in corporate identity products such as business cards and letterhead for companies across the U.S. Ron Wainer, president of Sunset has entered some gorgeous corporate identity pieces in the International Gallery of Superb Printing. He said: "Integrating PrintTalk's specification into the Collabria suite of applications enables us to automate the entire print production -- from receipt of the customer order through notice of shipment delivery. We can now provide our customers with real time information management which is the ultimate goal." The Tapestry of Content "The publishing industry is embarking on the third wave called Network Publishing, which enables visually rich, personalized content to be available to anyone, anytime, anywhere." Susan Prescott, VP of cross media for Adobe Systems. That quote was taken from the 28 February news release announcing that Adobe and Webprint would be collaborating on products and services to enable the Internet printing market. As one can tell by the date, the news came from the On Demand conference. The statistics emerging from the On Demand confab in New York City are rather overwhelming: 27 February: According to The Gartner Group 40% of print procurement will be handled via the Internet by 2003. 27 February: CAP Ventures projects that more than $113 billion per year will be spent on print procurement through Internet enabled processes by 2005, about six times the $19.5 billion of this year. 26 February: Bill Guttman, co-CEO of printCafe says that corporate print buying is a $240 billion market. 2 March: Xerox says almost 70% of 200 surveyed attendees at On Demand are currently using the Internet to conduct business. 2 March: Bernhard Schreier of Heidelberg predicts that there will be 40% more pages printed in the US in this decade than in the decade of the 1990's. But we remain fixated on the notion that the key opportunity, never mind if its 4% or 44% of print that moves to the Internet, is in mastery of content. The printer who leverages content will thrive no matter the platform. Consider these observations from Michael J. Wolf of the Media and Entertainment Group at Booz Allen & Hamilton in the March 2001 issue of Worth magazine: "Citibank has been trying to cast off its crusty old banker image by hiring executives with media and entertainment expertise, not only to liven up its online sites but also to infuse them with content. When every company, even the stodgiest financial services firm, is a media company, the formula changes. The result is the New Media Model, media as a business necessity. Companies that make sweaters or coffee (or business cards or annual reports we might interject) have no natural inclination to produce media content. But a confluence of technology, culture and demographics has created an entirely new set of consumer expectations: content in every experience as a key element of the value proposition. As a result, during this decade, consumer businesses will face a stark choice: incorporate elements of the media into their companies, products and brands, or die." No doubt a reader somewhere in this wonderful world will say that printers are not selling to consumers. But is that true? William R. Davis, CEO of R.R. Donnelley & Sons Co., was interviewed by Business Week Online in late January. He commented: "Actually, the reality is that most of the work we do now to prepare something for the printing press is done digitally. That's how we store data today. So, when one of our customers wants to use that in any other medium, it's a matter of format change. That's one of the real advantages we have." It sounds like Mr. Davis understands the need to leverage content. And indeed he does. Recall his "Credo of Content" which we shared in the last issue of TMN; Build your content vertically. Build your delivery system horizontally. And the wholesome, albeit omnipresently perfect example he offers of this? Martha Stewart! She created vertical content of interest to what William Davis calls 'home enthusiasts.' Then she built a media empire to leverage that content as far as the eye can see (horizontally.) And let's not forget this note from Hank Hatch, president of the International Prepress Association in the very provocative GATF Technology Forecast 2001: "A report from Forrester Research released late last year indicates that over the next five years the Internet will siphon $27 billion, or 10%, of all U.S. ad spending away from traditional forms of media." In that same Technology Forecast, David Watterson, Art Director for the GATF observes that: "The concept of one set of software for print and one for the web is rapidly disappearing." In other words, to leverage mastery of content, and to leverage the inescapable impact of the Internet, printers must learn how to weave a tapestry of content that is inclusive of Internet expression. While that learning curve accelerates, it is worth cheering Mr. Schreier's prediction of a 40% surge in printed pages. And worth making a note of Mr. Davis' helpful aside which cements the fact that printing is still a cost effective way to advertise: "In TV you spend 19 cents for each $1 of sales. It's 15 cents for radio. It's a little under 11 cents for online advertising, and that will come down. But for most print media, it's in a range of 8 cents to 11 cents." Just remember, those cost advantages are under attack from many quarters and mastery of content leverage is key. That's why the book printing segment was exhorted in the PIA's seminal report: Vision 21-The Printing Industry Redefined for the 21st Century, to embrace the following key message which really applies to any graphic arts industry segment: "Digitization will free book content for repackaging and reuse. Successful printers will look for opportunities to be a part of this process."
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