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TMN
1 February 2002
Graphics Industry News with a Piquant Point of View
This is our 144th issue, thanks
for reading it!
TMN is an
online newsletter 'dedicated to individuals in the printing and
graphic arts industry for the purpose of their self development,
their companies success and the enhancement of the printing and
graphic arts industry in society. It does this through
education, information and research*.'
*From the Mission Statement of the IAPHC
Musings along the Marketing Mews
Industry
expert Mike Stevens, is a super successful printer who is well
known in North America for his speaking gigs, marketing columns in
a trade publication and through his own direct mail agency. He
left us a ringing voice mail accolade recently. He says he
prints out each issue of TMN, shares them with staff and friends
in the biz, and often goes back to read an ancient issue of two
months ago to glean another idea or two for contemplation.
More than anything else, Mike Stevens has continually adapted to
the changes in our industry.
TMN has changed as well. We were one of the very first to
publish an online missive about the graphic arts (back in 1996!)
Subsequently, the number of "me too" online publications
has zoomed. Most of them provide, without more, mere
hotlinks to news releases about the industry, its firms and people
and products. Its sort of a passive form of point and click
news dissemination. Therefore TMN staked out new ground.
We now provide what Mike Kucharski a VP at Xerox called analyzing
and synthesizing a vast amount of information.
The point, made frequently piquant, is to give one pause and cause,
to think about the news and what it may portend.
Since our repeater readers now reside in 48 countries around the
globe, perhaps something can be said for reinventing oneself,
always seeking a distinct difference as the blender of history
keeps whirling.
TMN, its news to chew on, just call it Trans Mandibular News.
Industry News
Guess what? We aren't dead yet.
By now,
most everyone has read Dr. Joe Webb's "Ten Undeniable Trends
Affecting the Printing Industry" speech delivered 9/7/01 (if
you haven't, please report to the Principal's office for remedial
disintermediation, and ask us to tell you how to get a copy too.)
Dr. Webb said: "This is a fascinating business, undergoing
significant change......I am very positive about the outlook for
the industry overall."
He delivered those words mere days before the world changed again
on 9/11. Yet optimism reigns with other widely respected
voices too.
Robert Fitzpatrick and Steve Aranoff assist the graphic arts
dealer community in navigating
the vortex of change. Mr. Fitzpatrick offered these thoughts
as 2001 ended: "The imaging business is not in decline.
It is in renewal. A transition is occurring. The
information highway is changing the imaging landscape, not
destroying it. Imaging is a growth business. Offset
may not be growing, but print in all its various formats will
grow."
In our
conversations with Gregg Van Wert, president of the National
Association for Printing Leadership (NAPL) Gregg suggested that
while things are still tough, indications are that the second half
of 2002 should be strong, and that 2003 could be very strong
indeed.
So three very trenchant observers of this industry who operate
from differing points on the compass see a sunnier horizon, yet
all around one hears doom on top of gloom.
How can we reaffirm our desire for a rosier outlook?
If we had to narrowly define the issues of the day in the graphics
industry it would be to reflect upon the Structure of Change and
the Seizing of Competing.
Structural Changes
It is
said, you can't get somewhere new,
without knowing where you've been.
In recent weeks, perhaps driven by the cataclysm of September,
much has been written about the industry, as it presently exists.
Big Bucks and the 15% Solution
The
Printing Industries of America expects the U.S. printing and
publishing market to ring up $166 billion in revenues this year;
on 24 December 2001, The New York Times estimated the
worldwide graphics industry at $400 billion.
The Gross Domestic Product in the US in 2001 had been forecast to
hit around $10 trillion. Our friend and industry eminence,
Robert Hu, a man with the fortuitous pedigree to have been a
printer first and an e-commerce evangelist second, has urged the
tantalizing viewpoint that 15% of the average client company's
revenues are spent on print.
The 15% solution then suggests that 15% of ten trillion GDP would
generate a printing industry in the States of about $150 billion.
Even if
Mr. Hu was overly optimistic, a ten per cent figure still yields a
printing industry in the US of some $100 billion dollars.
Most industry wags agree that eliminating publishing from
estimates of industry size will result in a printing industry of
approximately $100 billion in the U.S. alone.
So a credible conclusion is that the average client has somewhere
between 10 and 15% of their annual revenue stream to pass along to
their friendly print providers; ergo: we smell gold in them thar
hills.
Of the multi billion dollar printing market, the Graphic Arts
Marketing Information Service reported on 31 January 2002 that
packaging printing accounts for $21 billion, and of that,
flexography has snared $15 billion. No less provocative is
the estimate released by Interquest on 31 January that variable
data print sales will grow from $2.56 billion in 2001 to $6.28
billion in 2004. Those numbers suggest gold to be found in
utterly new mountain ranges of opportunity.
Therein
lies a lesson to be observed. We keep getting anecdotal
evidence that certain segments of the graphics industry are
rocking and rolling.
Nichemanship uber alles
The
envelope converter who can't crank 'em out fast enough.
(hmmm, direct mail must still be attractive, eh?)
The purveyor to the floral industry who can't produce the 'how to
plant this rosebush' printed tags fast enough. (hmmm, is that the
nesting phenomenon? Folks want to spruce up the home front?)
The quick
printer who longs for a day off from the blizzard of business
(hmmm, to the quick and agile goes the race?)
The high school yearbook provider who would love to cram four 8
hour shifts into each day just to keep up; the frantic digital
copy provider to the trade; the book printer with a 20% yearly
gain; the label producers who can't lick em fast enough and so on.
Did you notice the late 2001 announcement from R.R. Donnelley that
they would be converting whole segments of their print output to
be entirely produced via the stochastic method? Nice
Nichemanship. And how about Deluxe? Operating in
a allegedly "dying" segment called printed checks and
posting handsome increases in sales, profits and earnings per
share?
This business isn't dead and maybe it isn't even molting, but
maybe it is morphing into something where one size can't possibly
fit all. Maybe.
A square dance of digital dosey doe?
The
industry is seeing other structural changes as well.
Numerically, we are fewer. The PIA suggests that since 1993
the number of printing plants has declined by at least 12%.
Most of the drop comes in shops employing less than 10 people.
Some of the reduction can be explained by consolidation, as small
shops are acquired by others. The Allegra digital print and
imaging chain has been very successful in that theatre.
Intriguingly, Dr. Joe Webb notes that industry employment has not
been declining as rapidly as the number of plants and suggests
that people who formerly worked in or owned these shops may have
simply changed labels to fight again another day. Offering
some evidence of this form of structural adaptation, the
International Prepress Association has created a new structure for
its organization because so many of its member firms have found it
necessary to migrate into content creation and electronic
(digital) output.
What's that you print?
Another
industry eminence, Dick Gorelick of the Graphic Arts Sales
Foundation has written about the 2 basic forms of print, what he
calls Informational printing (parts lists, airline schedules,
membership directories and so on) and Promotional printing.
Mr. Gorelick says that the advent of the Internet has markedly
reduced the need for printed price lists and other forms of
Informational printing. And we should not forget the words
of Dennis Watt, CEO of Watt/Peterson in explaining the death of
his award winning firm: "The single biggest impact on
our business was the Internet --it dramatically cut our print
volume. We saw our clients opt to use the Web instead of
printing brochures and other marketing related materials."
While it sounds as if Mr. Watt is describing printing more
appropriately described under the Promotional rubric, the point is
well taken nonetheless.
The
Internet may have made lots of Informational printing obsolete,
and the overall economic downspout badly hammered the advertising
world, which in turn led to much lower Promotional printing
demand.
As if to
confirm, R.R. Donnelley & Sons Co. reported this week that
their sales were down 12% for the 4th quarter and down 8% for the
year. Donnelley, of course, has big stakes in both the
Informational and Promotional printing arenas.
In other words, many of us just got hit by a double whammy, but we
are still standing. Which ain't too shabby.
In his
Fall 2001 PrinTrends newsletter Mr. Gorelick observed:
"It's not unusual to find graphic arts companies that lose
fifteen or twenty per cent of their annual sales within less than
a year." The deathly duo of sharply reduced
informational and promotional printing volume has exacerbated this
truth for several dearly departed printing firms, and yet there is
still reason to believe in sunnier days.
In the past week, Consolidated Graphics and Mail-Well were among
the well-known public firms to report earnings. CG saw
income down a nickel from the previous quarter and Mail-Well
actually saw earnings from continuing operation on the rise.
The CEO of Consolidated Graphics also noted that the demise of
some well- known firms has allowed his company to cherry pick the
services of some top flight free agent sales talent which augurs
well for increased revenues as the recovery commences.
And Moore Corporation, which continues its amazing Phoenix like
rise, made big news this month when it said it was acquiring the
Document Management Services Unit of IBM and then just 12 days
later said it was acquiring The Nielsen Company, a $100 million
dollar commercial printer based in Florence, Kentucky just outside
Cincinnati.
Clearly the executive team at Moore Corporation feels expansive
about prospects for continued growth and reinvention of its
business model.
Mr. Gorelick makes another provocative point when he suggests that
by its very nature Promotional printing is highly seasonal;
therefore the print industry is more subject to seasonal peaks and
valleys today, which were formerly smoothed out a bit by
Informational print volume now gone away. Or astray.
It appears we either deal with increased seasonality or we invent
new holidays requiring massive promotional printing.
On run lengths: One is the loneliest number
Yet,
another structural change in the industry is the nemesis of
diminishing run lengths.
TMN reader JC Anson directed our attention to the January 2002
issue of Electronic Publishing wherein Ira Gold forecasts
that one important trend for 2002 is shorter, lower cost press
runs achieved through implementation of CTP devices.
If one pays attention, it seems everybody is forecasting shorter
run lengths.
Mark Michelson, Editorus Rex of Printing Impressions
magazine commented at Print '01: "With the demand for
shorter print runs, printers need to realize they are selling
their make-readies as much or more than their print runs."
Howie Fenton, senior GATF Tech consultant told the 2001 GATF/NAPL
Sheetfed Conference, (the IAPHC will be a marketing partner for
the 2002 Conference) that growth in the short run market (less
than 5,000 pages) is predicted to grow some 17% in the next three
years as opposed to 5% growth in the long run market. At the
same event, Joerg Daenhardt of Heidelberg said that the 500 to
3,000 print run is the 'sweet spot' of the toner based direct
imaging technologies.
At the
VUE/POINT 2001 Conference Dr. Joe Webb said: "Most
print shops are designed to handle invoices of $2,500 and $5,000
and they've got to work their way down. Companies need to
position themselves for more jobs, lower page counts, lower run
lengths
and longer reorder cycles."
Also at VUE/POINT George Alexander of Seybold Publications said:
"In terms of the next few years, I too feel that printers
should be gearing up for smaller jobs. I would also add that
offset printing has kind of reached its high point at this past
Drupa. Other technologies are starting to progress much
faster than offset. What does that indicate? In the
long run, in means that other technologies will take over much of
what has been offset printing. The implication for the
printer therefore is to start getting involved with toner based
and inkjet based technologies ..."
On 18 January, Xerox Chairman and CEO Anne Mulcahy told a
gathering of Alphagraphics franchisees that the distribute and
print model is being driven by customer needs for fast turnaround,
precise quantities, and customization.
We like the use of the expression "precise quantities"
as a phrase that allows a marketing spin to be placed on the short
run length phenomenon.
We often note in the virtual pages of TMN that the battle for the
hearts and minds of the printing industry between the behemoths of
Heidelberg and Xerox and Hewlett-Packard and other players to be
named later is going to be interesting, entertaining and deeply
significant for the future of print.
Ursula Burns, president of the Document Systems and Solutions
Group at Xerox (and new Board member at a blue chip commercial
print firm called Banta) told an audience at the Lyra Imaging
Symposium on 22 January that: "Xerox continues to have
a strong lead in the fast growing digital production color space,
where systems run at speeds of 45 ppm and above. Xerox is
far ahead in the production color race with more than 4,000
placements of the DocuColor 2000 series presses to date, compared
to less than 200 for NexPress.
Burns went on to comment about the DocuColor iGen3:
"There is absolutely no comparable system to the iGen3
currently in the market. It is based on a totally new
technology platform that shatters previous quality, speed and cost
barriers."
Ms. Burns talks a good race. And on 31 January, Frank
Steenburgh, the Xerox VP in charge of the iGen3 Digital Production
Press said Xerox would begin taking orders for the press on 9
April, the opening day of the big IPEX 2002 show in Birmingham,
England.
Acknowledging that people have long anticipated the introduction
of the 'Color DocuTech,' Mr. Steenburgh allowed that he expects
the iGen3 to be even more impressive in its debut than was the
DocuTech.
Perhaps lost in the good cheer of the recent holiday season, was
an article about Hewlett-Packard in the 24 December edition of The
New York Times. Written by Chris Gaither, the article
talks about HP's designs on the printing industry, especially
after the Indigo acquisition:
"Yet, even with the company's market dominance, only 4
percent of the trillions of pages printed across the world each
year are printed on desktop printers.
So now the company has a much bigger target: a piece of the other
96 percent, dominated today by the traditional offset press.
The division's executives envision a world in which corporations
print hundreds of thousands of customized catalogs and other
reports on next generation high speed digital presses from
Hewlett."
So there you have it gentle reader, lots of nuggets to chew upon
as you ponder the structure of change in the graphic arts.
In the next issue of TMN we will tackle the Sizing of Competing in
a changed world.
Industry Tidbits
Everything Old is New Again
Did you
know there is a revival in wood type fonts? Hamilton Wood
Type and Printing Museum in Two Rivers, Wisconsin has commissioned
its first wood-carved typeface since the early 1900's. To
demonstrate the craftsmanship and continued relevancy of wood type
to the modern age of design, Hamilton selected BLinc Publishing to
introduce new digital formats of wood type. Among the trendy
users of the new wood font?
VH-1 and Seattle's One Reel movie festival. If you are ever
in Two Rivers, drop your paddle and set a spell, inhaling the
redolent aromas of printing and typesetting craft history.
Club and IAPHC News
IPW is well and truly hailed
The
celebrations of International Printing Week have concluded for
another year and from cities as distant as Calgary, Alberta to
Albany, New York the event enjoyed the largest turnout in years.
Jim Cottrell of the North Shore Club was able to post materials
about International Printing Week for the enjoyment of all 40,000
QuebecorWorld employees who visited that firms Intranet. To
all who celebrated their personal Pride in Print, we salute you!
International Gallery CFE now available
International
Gallery of Superb Printing Chair Dan Marantz advises that thanks
to the generosity of Arthur Stanton and his Gallery award winning
team at Globe Lithographing Co. in Ridgefield Park, New Jersey,
the printed version of the Call for Entries (CFE) for the 28th
annual International Gallery are now available. Please
contact Dan at dmarantz@aol.com
or this writer at kkeane1069@aol.com
and depending on your locale, we will ship any quantity of the CFE
you desire from Dan in New Jersey or here in Minneapolis. We
also thank Ken Englander of Central Lewmar Paper in New Jersey for
shepherding the donation of the Focus Matte 80# Mead Coated Paper
stock which enhances Kathy Schoenick's CFE design so well.
Four
hundred copies of the CFE were sped off to PIP Printing
Headquarters in Mission Viejo, California to be included in a 30
January mailing to each of the 400 PIP franchised locations thanks
to the good offices of company president Catherine Monson and her
Corporate Communications Manager Lee Ann Ohanesian.
The entry
flow for 2002 has begun in earnest with 60 entries arriving from
the Capital District Club this week. After visiting with us
and reviewing the entrant list for the Central Minnesota Printing
Professionals Gallery event, Ron Pergande of label producer GPA
will be visiting with clients of his digital product line in the
Midwest to encourage that they enter this competition just as he
encouraged Los Angeles clients like Stoughton Printing and Castle
Press to enter when he sold for GPA in LA. Ron stopped in at
Printing Arts, Inc., in Brooklyn Park MN this week and saw
International Gallery Award plaques from 2000 and 2001 hanging in
the lobby along with specimen copies of the award winning entry
placed there by our good friend and frequent International Gallery
judge Ray Becker, president of Printing Arts. Both Ron and
Ray "get Gallery," and really, everyone should.
In the
last week, for jobs as diverse as a 500,000 quantity static cling
label job... to a book printing job... to a coloring book project,
we have been able to send new business opportunities to past
entrants of the International Gallery.
There
is not a more cost effective way to showcase your firm's
capabilities. In this challenging marketplace, there is no
better time to make certain both new and existing clients know of
your award winning work. It's a global world; why not make
sure your clientele is more than local? The entry period is
open now!
International Gallery Chairman Dan Marantz has created an alliance
with the folks at Print Buyer Today magazine. Print buyers
will be able to enter the International Gallery this year and we
are confident many will find value in being able to find new
sources of supply from other entrants. This new alliance
should be a classic win/win. http://www.printbuyertoday.com/
Support our Sponsors!
The following links
will take you to the online version of the CFE, and we truly hope
you will also take time to visit the link to the Best of the Best
from the 2001 International Gallery. We appreciate the
patronage of our 18 sponsors for the 2001 Best of the Best awards
and trust you will visit their websites from the hotlinks on each
and every Best of the Best award page. Sincere thanks to
Robert Vashrow at AcmeNet, our Website maestro, who has done us
proud with the Best of the Best section on CraftNet.
http://www.iaphc.org/gallery/cfe/index.html
http://www.iaphc.org/gallery/bestof/2001.index.html
If you have any difficulties obtaining the 2002 CFE or would like
a copy of the 2001 Duplicate Order form or need the Gallery
illustrated G logo for proud winners of the 2001 International
Gallery event, please contact our Director of Member Services,
Lesley Addy at laddy1069@aol.com
Y'KNOW Requests
Your Knowledge Network Obviously Works (Y'KNOW?)
1) From Cy Valerius:
"I am looking (on behalf of an old client/friend) for someone
who could mount preprinted 11 x 14" and 11 x 17" 4/C
prints onto a cardboard backer and then die cut them into jig saw
puzzles. The prints are printed on 6pt C1S stock. The
client is in Eastchester, NY so a supplier in that general area
would be wonderful. Many thanks!" You can reach
Cy via e-mail at cyvalco@juno.com
2) From a member who prefers anonymity: "We have some
questions about the protocol of returning customer files.
What we are asking is -- should we handle it the same way we
handle returning film, or, shouldn't there be a cost for going
into archive, pulling up, putting on a disk or sending back via
e-mail?" Please reply to this writer at kkeane1069@aol.com
and we will forward your practical wisdom. Thank you!
3) From Jacques Denault of Transcontinental and the Montreal Club:
"We've just promoted Mrs. Marian Kerr as the plant manager of
one of our direct mail printing plants, Interglobe Montreal.
We want to promote this important nomination and would like to
obtain some statistics on the role of women in the graphic arts
industry." You can contact Jacques at denaultj@transcontinental.ca
4) From Judy Cochrane, member at large in Colorado: "My
company has asked me to look into the cost of equipment for a
large format digital printer with a minimum of 20 x 70" image
area. Possible laminating equipment to go with it. I
am simply looking for basic costs at this point to help determine
if it is cost effective to bring this kind of production in-house.
Thanks for your help." You can reach Judy at JCochrane@sugarloaf-usa.com
5) From Kirk Weary of the York Club: "I am looking for
industry standards (percentages) for the following areas: 1)
total sales vs. cost of sales; 2) total sales vs. salaries; 3)
total sales vs. operating expenses. Thank you for any help
you can offer." You can contact Kirk at wearykw@aol.com
6) From Walt Gutowski Jr. of the Grand Rapids Club: "I
am looking for anyone who can offer me some advice on the best
methods to handle Publisher files from customers.
I know this can be a bone of contention for printers, but it seems
to me that spells opportunity." You can reach Walt at walt@swiftprinting.com
7) From an anonymous member: "I would like to find the
mill, printer or whatever that manufactures "binder"
paper used by students. You know, wide ruled or college
ruled paper? As an alternative, someone who has very large
one or two color open webs.
We would like to contract them to print in mass for us as our
presses are heatset webs and it would be more cost effectively
done on open webs. One key criteria though is that they have
to be able to print 8.5 x 11" bleeding forms.
Preferably 16PP or higher page count signatures. If
you can help me with this, I will have a whale of a story to tell
as a testimonial for the Knowledge Network." Please
contact the writer at kkeane1069@aol.com
if you can help and your reply will be promptly forwarded.
8) From Marty Levinson of the New Jersey Club: "I am trying
to find a company, (called Wessel maybe??) long since acquired by
someone else, which made a special clear ink. When printed
onto the paper used in children's coloring books, it would soak
into the paper and disappear. Later when the kids used a wet
paint brush and applied it to the page, color would appear."
You can reach Marty at martyl@sandyinc.com
Look For
The current issue of
the IAPHC Communicator, Winter edition is in the mail. Many
thanks to Jeff Mayer for his procurement proselytizing that
resulted in a generous donation from Weyerhaeuser; Norm Belanger
for his deft designing; Lesley Addy for her prompt proofing; and
especially to Angela Plowman (Specialty Graphics) and Jim Duffy
(Alonzo Printing) of the East Bay Club for agreeing to take this
project on, and also to Doug Arthur at Alonzo Printing who made
everything happen on time. Great work people!
Keep an eye on CraftNet (see link below) for the schedule,
registration form, program ad book rates and other pertinent
details for the Albuquerque Convention this August. Jackie
Roy, Sara Hood, Cindy Johnson, Alice Montes Bennett and Lesley
Addy have been knocking themselves out to prepare a wonderful
itinerary in the Land of Enchantment called New Mexico.
Also about to launch is the CD containing the Best of the Best
show from the 2001 International Gallery; the memory show from the
2001 Toronto convention and the CFE for the 2002 International
Gallery. If you have a friend in the graphics business in
Timbuktoo, this is the sort of item you will want to send her to
introduce the IAPHC.
Kudos' to Chris Grajczyk, a digital-ographer of subtlety and
distinction. The disk is way cool and it's all Chris.
In Memoriam
Our condolences go out
to the family and friends of past IAPHC International president
William A. Bailey, who passed away recently. Mr. Bailey was
very well regarded by his many friends in the Fifth District and
across the Association. He was a member of the Akron Club
and served as IAPHC President in 1974-1975.
That's all Folks! --30--
Yours in Craftsmanship,
Kevin Keane
IAPHC
7042 Brooklyn Blvd
Minneapolis MN 55429-1370 USA
800/466/4274 http://www.iaphc.org/ |
