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TMN
22 January 2003
Graphics Industry News with a Piquant Point
of View Since 1996!
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
Industry
News
A Lighthouse
on Yonder Shore?
Ensconced in regal serenity, a print
industry pundit from the formerly far flung commonwealth observed
about the not so dearly departed 2002 - "It was an Annus
Horribilis." But that was then, and this is now.
Can 2003 be a better place? A kinder, more gentler global
graphics world?
A printer we spoke with at an
International Printing Week celebration in Des Moines, Iowa on 11
January, in reply to our oft posed question, 'Hey, how is
business?' said somewhat ruefully: "We have been up for
five months now, if we hit 7 months in a row, I'll believe that
better times are here."
Homer's Law of
Unintended Consequences: Going Postal
We refer not to the Ionian poet of epic
proportions, but to our man Homer Simpson. Some delicious
news items are just to chewy to ignore. D'OH!
With the conclusion of International
Printing Week, the holiday season finally comes to a close.
And all the catalog printery's go on hiatus. Yeah right.
Every silly time you are told that
Print is Dead, open up your mailbox, bunkie.
At the Print Outlook '03 Conference
last month in Washington, DC, Professor Frank Romano warned his
listeners that postage is the enemy. "Postage is the
prime consideration that every publisher is concerned about."
Fortuitously, the United States Postal
Service had announced in Washington only a month before that
"a new financial analysis of the Postal Service portion of
the federal government's retirement fund disclosed that postal
payments have almost fully funded all future retirement
obligations..." And what does that government
speakeasy mean?
According to the Envelope Manufacturer's
Association communique of 5 November, there should be no US
postage rate increase until 2006!
At almost the same instant, TIME Magazine
published an interesting over view of the exploding e-mail
marketing blitzkrieg. Jupiter Research predicts that you
will get more than 2,500 pieces of the euphemistically called
"commercial e-mail" by the end of 2003 and more than
half will be spamorama. By 2006 Jupiter says you'll get
twice as much.
Why? Because sending you an electronic
ad only costs 5 cents compared to 25 cents to 3 dollars for the
postal equivalent. According to TIME, an e-mail campaign can
reap up to 12 times the response rate of ordinary junk mail.
And again we quote the battle-cry of the indomitable envelope
enthusiast Pete Peterson of Western States Envelope -- "Every
time you send an e-mail, please rip up an envelope. Or
two."
All of which means
that we can count on fewer and fewer printed catalogs right?
Wrong! You see, if a person replies to
an e-mail solicitation, that name gets cookie cuttered as a name
to be added to the vaunted "Responder List." And
once XYZ direct marketing firm learns that you have responded to
the Victoria's Secret e-ad, you may be assured that print catalogs
will not be far behind your fair behind.
Should you want proof of this theorem,
consult the R.R. Donnelley news release of 7 January in which it
announced a long term contract (through 2007) to print all of the
Bear Creek Corporation standard sized catalogs at Donnelley's
Lancaster, Pennsylvania plant. Bear Creek markets under the
Harry & David and Jackson & Perkins names (both of which
catalogs hit this responder's mailbox,) as well as the Shaklee
line also owned by Bear Creek. Nancy Tait, president of Bear
Creek was quoted: "Bear Creek's catalogs require superb
print quality and the highest degree of product matching to ensure
that our customers have an accurate representation of the products
they are purchasing."
Not to be left out, Quebecor World announced
on 9 January that it had snagged new catalog business for Avon
calling on clients in Peru, Chile and Bolivia.
One catalog
begets another. And Print is Saved. Hallelujah.
Pass the Tylenol.
Still dubious gentle reader? Then
consider this timely gem from the Boston Globe newspaper.
Despite the ubiquity of Internet research, and the migration of
encyclopedias to CD, it turns out the lowly doorstop known as the
Britannica/WorldBook etc. has enjoyed an unexpected renaissance.
A study last year by Outsell, Inc., of San Francisco found that
while we may use the Internet for fast information, we tend to
place more trust in a book. D'OH!
"One significant finding was that
print is the preferred format for using content, though not the
preferred format for finding it," said Leigh Watson Healy who
conducted the Outsell survey of 3,200 faculty and students for the
Digital Library Federation.
How's about them apples? The
Book. Permanent. Portable. No wires, no blue
screen of death. And still the choice of epic poets and
their evanescent muse.
How to
dismantle a choo-choo train
The standard business class 101 parable
to inculcate the knowledge that change is inevitable, is the saga
of the railroads thinking they were in the railroading business,
when in fact they were in the transportation business. And
the history of printing is riven with tales of bravely futile
delaying actions against the rivers of change. The Guilds of
scribes and other copyists were able to delay the introduction of
the printing press into Paris in the 1500's for a full 20 years.
At one point, the International Typographical Union had as its
organizing mission: 'to prevent the use of labor saving
improvements.' No joke.
(Clinging stubbornly to the past is not
confined to ancien regimes. The November 25th issue of
Forbes magazine contained an interesting profile of Ron Daly, who
at the time the article was written was president of RR Donnelley
printing operations. His boss, CEO William R. Davis, was
quoted thusly: "He had no tolerance for the old
printing-is-an-art culture. Printers look at their presses
'the same way infantrymen look at their rifles. It's their
rifle.'" Hard to say if Mr. Daly's patience was tested
once too often, but on November 6, OCE North America, the digital
copier firm, announced he had taken the top job there.)
Echoing Mr. Davis is Andy Schaer,
marketing Vice President for Printcafe who said at a recent
Komori/Creo confab on Networked Graphic Production in the United
Kingdom: "Today the craft is not about being able to
put ink on paper, but in being able to do something more
efficiently. It's not the equipment, it's the products that
distinguish one printer from the next."
The Push-Pull
Dialectic
The multinational financial powerhouse
ING, has created a virtual bank called ING Direct.
We have previously written in these digital
pages (albeit in the century before this one!) about the powerful
economics that drive businesses to hope to move customers into an
online virtual relationship.
ING offers this comparison: if
you phone the ING call center to check on your account
information, it costs $4.51 on average, but it costs ING only
$0.01 if you use INGdirect.com Making a deposit costs ING
$4.94 over the phone, but only $0.10 via INGdirect.com
That sort of massive cost disparity
makes a compelling case for all businesses to drive more customer
traffic online.
But how would it
apply to the print and graphics world?
Last month, a successful printer friend
in Louisiana asked us to visit their web site. The printer
said there had been a near zero discernible payback from having a
website at all.
Which got us to thinking about the role
of the web for printers in the post dot com bubble era. Is a
printer's web site primarily intended to draw new business from
equally new clientele, or to make buying simpler for existing
customers?
Bob Lindgren is president of the PIA
affiliate in Southern California, he wrote last month:
"It's a clear sign of sales failure when a client says:
'I didn't know you did that!' When it happens, it's the best
possible evidence that we didn't know enough about the client's
business to see the relevance of our capabilities and/or we just
didn't get around to communicating them."
Andrew Paparozzi, VP and chief economist for
the NAPL told his Print Outlook '03 audience last month that the
biggest threat to printing companies is forgetting they are in the
communications business. "Our primary function will
always be to learn everything we can about our client's unique
needs -- ink on paper and electronic -- and how we can best
satisfy those needs."
So what does a
printer want her website to do?
1) Is it supposed to reduce the costs
of servicing clients? (ala ING Direct?), or
2) Is it supposed to seduce more of
their overall print and graphics budget into your coffers?
Maybe those two options are not
mutually exclusive but should be woven as parts of a larger
marketing tapestry.
Like Bob Lindgren, we remain convinced
that the average printer obtains little more than 20% of an
existing client's budget for the procurement of
printing/copying/multi media and other digital disasters, simply
because the clients didn't know the printer did "that."
Professor Frank Romano provided a
fascinating chart at Print Outlook '03 which showed that as the
value of client's print budgets increase so too does the number of
print purveyors used. You think you are getting all of your
client's print budget? The average client uses more than 7
printers!
A website then, can be a useful tool
for introducing a client, whether new or old, to your full range
of products/services/capabilities.
But there is a push pull tension here.
If you push clients to use your site for ordering, job tracking,
etc., because it is cheaper than in-person communication, you
still want to pull, entice, lure them into learning more about
your full capabilities.
This push pull dialectic is inherent in
the Internet. You, gentle reader, had this issue of TMN
delivered to your computer screen. No effort required.
It was pushed to you.
How would you feel if you were told you
had to go find it? That you felt instinctively and just
maybe suspiciously that someone was trying to pull you on to their
site in order to provide you what you were after? And what
is the owner of the site after from you?
The above referenced research from
Outsell, Inc., is applicable here -- folks trust hard copy more
than virtual info.
Next time a sales rep for ABC
Enterprises attempts to introduce you to his product by using a
Powerpoint (I can read the slides to you real nice, can't I?)
presentation, ask yourself about your own feelings of trust.
Or maybe tell your sales reps they have to leave their laptops at
home on the next sales trip and actually make a personal
connection with clients. It would be a far more creative
thing for sales people to plug into their clients future dreams
than to plug into the wall. One might do well to make eye
contact, and then ask a client what their goals are for the year,
what hurdles they perceive in attaining the goals, and how the
printer can help leap the hurdles.... but we digress.
In sum, we need to ask whether our
customers, new or current, wish to be pushed into using the 'Net
as it relates to your business, or would they perhaps prefer a
magnetic pull.
However you resolve this dialectic,
don't miss the point that while many banks now prefer to think of
themselves as retail stores -- they still do a lousy job of
communicating their desire to do more business with existing
customers. The CEO of Wells Fargo admitted as much in that
firm's 2001 Annual Report --he said that the average financial
services customer purchases 15 financial products, but the average
Wells Fargo branch has sold only 4 products per customer.
That's a whole lotta upside!
Despatches
from the Digital Diaspora
Speakers at the Print Outlook '03
conference repeatedly drew attention to the continental divide
which is emerging in the graphics landscape between them that does
digital, and them that is done in by digital. Virtually
every speaker exhorted attendees to seek out new service
offerings. Charles Pesko predicted that if a printer wants
to grow more than one or two per cent per year, they must look at
services beyond print.
William Lamparter said that mass distribution
(think long runs) has been abandoned in favor of a more
customized, (think personalized) approach.
Andrew Paparozzi noted that, "The
recession was a lot deeper for us than for the economy at large.
Since about 1998, our industry has not kept pace with the economy.
This had nothing to do with the business cycle. It's
structural, representing a profound change in how people
communicate." That change requires adoption of new
service offerings including digital printing, fulfillment, mailing
and database management.
That short list of new service offerings
needs to be thought of as a suite of inter-related capabilities,
not discrete stand alone services.
Anyone who has seen the output from the new
digital color presses knows that quality is no longer a valid
issue, and as the price per page achieves the holy grail of 5
cents, the offset advantage is diminished even more. Then
once you see the services as being an interrelated suite, new
vistas open, and the structural challenges of the new print
economy can be met.
Last month, the British commentator Rod Hayes
wrote: "The point to be appreciated is that the
NexPress and the iGen3 better complement fulfillment services such
as direct mail, or archiving services than an offset press, and
this is where the value of the print produced can more
realistically be weighed against the value it holds to the buyer,
rather than through a close relationship to the cost of
production. (another way of saying getting a margin for
intellectual prowess and skill.) Also, digital can respond
better to just-in-time procedures and the demand for very short
run orders that are regularly repeated. At present many
large format printers are faced with offering buffer storage
facilities (think fulfillment warehousing), a solution incredibly
effective at shredding margins."
Late last year, IBM Printing Systems
commissioned CAP Ventures to produce a white paper titled:
"Taking the Next Step" in which CAP predicts the
compound annual growth rate of digital print on demand will be 14%
between now and 2006 and will grow to be a $50 billion dollar
marketplace.
But, within this environment of digital
excitement are the ominous facts that run lengths in any form are
shrinking as fast as lead times and profit margins.
Additionally, the shift of Informational printing to the Internet
distribution model, means that printers are ever more subject to
the seasonal vagaries of Promotional printing (think holiday
catalogs.)
But amidst the doom and gloom, just maybe
digital variable printing provides a new avenue. A fixture
in our speeches to industry gatherings of late has been the
strongly worded suggestion to attendees that they pay attention to
the research and conclusions of Raine Consulting. (http://www.raineconsulting.com)
In a recent Raine report on implementing personalized variable 1
to 1 print media capabilities we found this simple sentence:
"The (Customer Loyalty) program will drive consistent press
work along with the capability of forecasting workload and revenue
expectations." In other words, after the digital
darkness, comes the digital dawn. Personalized promotional
printing, if fully maximized, will require post cards, catalogs,
thank you's to responders and similar printed matter, and thereby
may help replace the cash flows from the now departed
informational printing.
Digital may be a
disruptive technology, but properly used, it does not have to
become a destructive technology.
One of our readers had this to say
about the industry's future:
It will be largely services (content
management, file management etc.)
It will be largely promotional
printing.
It will be largely 4 color digital.
It will be largely personalized.
and, all four of those compel us to pay
attention to the missing link -- it MUST be largely automated.
Consolidation:
Congeries or Concatenation?
The news on 17 January that Moore
Corporation of Toronto was merging with Wallace Computer Systems
of Lisle, Illinois was met with both approval and apprehension
given that the newly born Moore Wallace would employ more than
18,000 and generate $3.6 billion US in revenues.
Moore is perhaps better known in that
it has a long history in the business forms market and has evolved
into a substantial player in outsourcing, forms and labels and
commercial printing. Wallace is less well known despite a
stable of 22 award winning printing firms across the US including
Monroe Litho, Hoechstetter Printing, Moran Printing to name just a
few. Wallace has developed a comprehensive single source of
supply strategy called Total Print Management.
Clearly, the new behemoth will be a
formidable competitor, yet printers in North America have seen
quite a few consolidation efforts meet an unhappy end in the
silent void after the dot com crescendo. Will this be any
different? Is print immune to a consolidation market force?
We think that consolidation should not
be underestimated. While the late 1990's efforts in printing
may have been too aggressive, we find these words from Jeff
Everett, lead manager of Templeton Foreign Fund (January 2003
Bloomberg Personal Finance) to be worth contemplating:
"Consolidation is a very interesting development globally --
we've been looking at how it can help an industry. Everyone
used to think cement was a terrible sector: Pricing was poor, the
companies were at each others' throats. But now, just four
companies control two-thirds of the world's cement, and they've
gotten together to create an almost OPEC-like cartel."
But it could never happen in printing,
right?
sokniK--
there's a Kinko's in your rear view mirror
Long ago, famed Negro League baseball
pitcher/philosopher Satchel Paige shared his rules for living.
Among them was: "Don't look back, something may be gaining on
you."
Not even winded after its joust with
Justice (US Department thereof) and sound thrashing of nearly
every software purveyor not labeled MS, it seems the virtuous
paragons at Microsoft have become enamored of still new ways to
print monopoly money -- would you care to compete with the
juggernaut, bunkie?
At the rather scaled down Comdex show
in Las Vegas in November, it was sort of unnerving to see
Microsoft's Chief Software Architect, one Bill Gates, invite the
CEO of Kinko's, Gary Kusin, to share the stage during Mr. Gate's
Keynote address.
Mr. Kusin was there to herald the
introduction of the "File, Print, Kinko's" initiative
which will allow Microsoft .NET users to print documents at any of
the more than 1,100 Kinko's locations. One might suggest
this is merely a response to the Electronics for Imaging
"Print Me Network" which has been rolling out for the
past year. On the other hand, this is Mr. Softee we are
dealing with. Dividends and all.
On yet another hand, this is Kinko's we are
dealing with. Forbes.com reported on 13 January, that
Kinko's had severed all remaining ties with its charismatic
founder Paul Orfalea (in exchange for another $116 million.)
Kinko's is now privately held by the buyout firm Clayton, Dubilier
and Rice. According to Forbes, Kinko's generated $2 billion
in sales in 2002, but achieved gains in operating income only by
discontinuing its longtime 24 hour service approach at some
locations. Forbes reported: "It is shifting
existing accounts from its stores to printing plants that will
exclusively handle those jobs." Hmmmm.
From a private message board on 17 January:
"I just price checked the competition for color copy prices.
I asked for a quote for 50 copies of a 28 page book. The
Kinko's look-a-like in town quoted 50 cents. I can compete
with this; Kinko's quoted 29 cents. Looks like they are out
to get the business anyway they can." Kinko's was
running ads in many US papers in the early part of January
offering 39 cent color copies.
Intriguingly, Forbes magazine from 25
November listed the largest privately held firms in the US -- well
known printing firms like Quad Graphics and Taylor Corporation
came in at positions 130 and 197 respectively. Kinko's was
number 91. Of course, copying will never last ....
Industry
Blurbs
Keep an eye on the Printcafe/Creo
relationship -- on 22 January, Creo announced that it had entered
into agreements to purchase approximately 2.6 million shares of
Printcafe Software, Inc., boosting Creo's stake in Printcafe to
about 55%. Creo reportedly is interested in acquiring the
balance of all Printcafe shares it does not yet own.
However, later in the day, Printcafe said its Board had not
received any formal offer. Printcafe went public in a very
difficult time in the capital markets. The Minneapolis
StarTribune suggested earlier this week that Printcafe suffered
the largest percentage share price loss of any IPO in the last
year.
Well known Toronto Club member Jay Mandarino
is president the award winning C.J. Graphics, when he isn't
running auctions at warp speed. C.J. Graphics recently
purchased Colour Technologies, a prepress firm owned by Mary
Black, chair of Ryerson University's Graphic Communication
Management School. Jay's firm produces some of the most
exotic projects in North America and would be a good resource for
you if you need the impossible, the difficult or the arcane.
Contact him at jay@cjgraphics.com
Our good friend Bill Farquharson of Print Tec
Network continues to beat the drums for successful print sales
experiences. He is a digital print sales whiz, has a new
book coming out on selling print and would be a heck of a guy to
get to know if sales are important to your firm. Contact him
at billf@printtec.com
IAPHC
News
Your Knowledge Network Obviously Works, (Y'KNOW?)
Y'KNOW
Requests
Every day, one or another member of the IAPHC
Knowledge Network requests help from IAPHC Headquarters, and
within minutes, a cyber inquiry is whipping around the etherspace
in search of the specific capabilities needed. Due to the
urgency of these requests (in an era of insane turnaround times)
the following queries may have already been dealt with by the
inquiring party. Nonetheless, these requests offer a fair
sampling of what can be found simply for the asking. Have
you been a consumer of your membership in the Association by using
the Knowledge Network? It really works, Y'KNOW?
From James Shehan of the Yosemite Club in
Modesto, California: "I was wondering if you knew of,
or could pass along on the network, anyone that can print full
color PVC name badges. I need about 7,500 full color 3"
x 5" plastic cards printed before the end of January."
You can contact James via e-mail at james@typevisions.com
From Stacey Montgomery via Pat Kushner of the
Greater Milwaukee Graphic Arts Association: "I am
trying to find a printer that can print rolls of wrapping paper, I
would like to have my designs printed on wrapping paper I will
then wholesale."
You can contact Stacey at editor@celebratingchildren.com
From Dale Summers of Harte-Hanks Direct
Marketing and the Graphic Arts Club of Jacksonville, Florida:
"I'm looking for a new printing estimating software package.
Do you have any contacts or manufacturer's names? Or print
vendors that are currently using an integrated system, i.e.,
inventory, data collection, estimating? I have PrintCafe's
demo, and Printactive's demo and am looking for additional
options." You can e-mail me at Dale_Summers@harte-hanks.com
From Adam Glendon of Sundog Printing in
Calgary and Alberta Graphic Arts Industries Network:
"We are looking to upgrade our job server in a Macintosh/Creo
Brisque workflow environment. We are currently looking at
Apple's Xserve. I am looking for information regarding
anyone using the Xserve with the Brisque equipment including
ripping and online job storage on the Xserve. I would like
to find out the procedure you used to connect the Xserve to the
Brisque as well." You can e-mail Adam at ajg@shaw.ca
International
Gallery CFE's available now
The Call for Entries for the 2003
International Gallery of Superb Printing are now available.
We thank the collaborative efforts of Kathy Schoenick (design
diva); Dan Marantz (copy condenser); Chris Grajczyk (photo
persona); Roy Grossman (favor facilitator); Al Zowada (excellency
emeritus) and the fabulous team at Print Communications Group in
Fairfield, New Jersey for the coolest looking Call for Entries (CFE)
yet.
If you want some copies of the CFE, just
e-mail the writer, (kkeane1069@aol.com) the entry period for the
29th International Gallery of Superb Printing is open now!
International
Gallery in the News
Consider this 'special features' description
from a 2002 International Gallery entry: "Full goat
leather binding, flocked velvet doublures and flyleaves; rope head
caps; silk embroidered cane head bands; round spine with
distinctive raised bands; quarter inch thick beveled boards; blind
embossed titles and designs on the covers and spine.
Presentation box is covered with Dutchline on the exterior and
contrasting French flocked velvet within."
Now consider these lines from an article
about the same described entry: "What book do Prince
Charles, the Grand Duke of Luxembourg, Princess Patricia von
Hohenberg of Austria, Her Majesty Queen Noor of Jordan and Prince
Bernhard of the Netherlands all have in their libraries? ....It's
Antarctica." Forbes, 25 November. It is also the
book, printed using the 10 Micron Staccato method developed by
Creo, that won the inaugural IAPHC Craft, Art, Science award in
the 2002 International Gallery for Hemlock Printers of Vancouver.
Already, the first entries for 2003 are on
the board, a student entry done by Eric Van Patten and supplied by
Rob Julander of the Des Moines Club and an entry from Frank Von
Cappeln of Craftsmen Printers and the New Jersey Club.
And don't forget, duplicate awards for 2002
International Gallery winners are always available; the duplicate
order form can be easily downloaded from CraftNet, http://www.iaphc.org
2003 IPW a Big
Success!
Our congratulations go to Clubs from New York
City (Joe Prestino, Vince Dipalma, Jack Kott, et al) to Los
Angeles (Bill Leahy, Bob Donahue, Richard Jones et al.)
These clubs hosted events with several hundred attendees that did
much to introduce the tenets of Craftsmanship to their respective
market areas. Many local celebrations in other communities
were held during January 12-18 to let the world know that print is
most assuredly alive and kicking. In particular we thank Pat
Henry for the wonderful article on http://www.whattheythink.com
commemorating the festivities in New York. Fantastic
publicity for a wonderful salute to the graphic arts.
In Memoriam
We would like to thank the Lima Area Club for
their generous gift to the Platinum Fund in memory of Linda
Graham, longtime Lima Area member and cherished wife of past IAPHC
International President Stewart Graham. Linda was a great
lady blessed of a true heart and a gentle spirit. She is
deeply missed by all who knew her as such a special soul.
We were also saddened to learn of the passing
in late October, 2002 of Mr. James Lorentz, a member of the
Hamilton, Ontario Club and past IAPHC International President
1986-1987. Mr. Lorentz was a fun loving man who made a real
effort to bring his joie de vivre to all those he encountered
throughout the IAPHC. He will be missed by his many friends
across the IAPHC.
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
Celebrate
your Craft, Showcase Your
Science, Applaud Your Art
Enter the IAPHC International Gallery of Superb Printing
THE International Awards Program for the finest printing in the
World!
Submission deadline, May 30,
2003
http://www.iaphc.org/gallery/cfe/index.html
http://www.iaphc.org
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