The Future of Print

THIS ARTICLE will attempt to use the past, as well as the present, to get a clear look at the future of the printing industry. Predicting the future, however, is a slippery slope. Here are some of my favorite predictions, just so I can feel I’m in good company.

“This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”
—Western Union memo, 1876 (By the way, after 145 years, Western Union, has finally gotten out of the telegram business.)

“The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?”
—RCA Founder David Sarnoff’s associate’s response to his request for investment in the commercialization of radio in 1920.

“32 bits should be enough address space for Internet”
—Vint Cerf, “Father of the Internet,” in 1977 (He’s now vice president and chief Internet evangelist for Google)

“640K ought to be enough for anybody.”
—Bill Gates, 1981

How Predictions Become Reality

A long time ago, Jules Verne wrote a story about sending people to the moon by blasting them out of a giant cannon. That story inspired a host of rocketry pioneers who pondered how to make such a journey a reality. Based on the science of their day, they created visions of how to achieve such a feat, using rockets instead of cannons. When all the conditions were right, these visions evolved into reality.

In 2001, the Digital Printing Council noted: “The use of direct mail will significantly increase over the next few years.”

In its 2005 annual report, the USPS revealed that Standard Mail (bulk advertising mail, formerly known as third-class mail) fluctuated slightly in volume from 2001-2003, but jumped substantially in both 2004 and 2005, growing by about 5.6 percent each of those years. If the trend continues at a steady rate for the next two years, the total will be at 125 percent of 2003 levels. That’s pretty significant.

So what can we draw from this? Marketing and advertising firms seem to use direct mail more effectively and more often. One reason is the flexibility advantage printing offers. Still, with all of today’s electronic means of communication, why hasn’t Standard Mail diminished instead?

As a side note, over the five-year period between 2001 and 2005, First Class mail has dropped a total of 5.4 percent and Periodicals have seen a 10 percent decline.

Here’s another good one:

“Within five years, 80 percent of all print will be ordered via the World Wide Web.”
—CAP Ventures, 2001

Five years later, Printing Industries of America/Graphic Arts Technical Foundation (PIA/GATF) estimates that less than 50 percent of all print is being ordered via the Web. Don’t get me wrong, this is still a huge number. The mitigating circumstances that prevented the full prediction from coming to pass can be summed up in two intertwined words: acceptance and convenience (or lack thereof).

Although the tools exist, there is an acceptance gap. Online ordering for the masses is confined to the lower end of the spectrum. Standardization is the order of the day with limited templates, formats, sizes, colors and paper stocks available.

There is also the higher end, including customized and branded Web-to-print portals, which offer some pretty complex print-on-demand and collateral fulfillment catalogs with variable data capabilities.

These processes, although they account for a variety of products on the convenience level, still exclude a host of customized solutions, which include many of the more creative aspects of printing.

Consider processes that include solutions like customized inks and coatings, and options such as die cutting (made even more popular thanks to the Post Office’s “MarketMail” regulations introduced in 2004). It would take much more homogenization on the part of designers to reach the 80 percent mark. And that, my friends, will never happen.

Poignant Production Predictions

Here are three predictions from Adobe’s Principal Scientist Dov Issacs, and RIT’s Professor of Digital Printing Frank Romano in 2003.

“The post office will become primarily a delivery mechanism for promotional material by process of elimination. Because the U.S. Postal Service is a commercial organization, that will make it favor direct mail companies more and more.”

As discussed earlier, the trends point to this becoming a reality. One of the other most positive recent outcomes is the passage of the Postal Accountability and Enhancement Act in February 2006.

“Senate passage of postal reform is a huge victory in the printing industry’s long quest for a major legislative overhaul of this country’s postal laws,” said Michael Makin, president and CEO of PIA/GATF. “S. 662 takes steps to ensure that future postal rate hikes will be both more affordable and more predictable, allowing the printing industry to continue serving customers efficiently and successfully.

The second Issacs/Romano prediction:

“Printed packaging and labeling materials, and the printing of brochures and promotional material, will be the only certain growth areas for the print industry.”

Packaging and labeling have historically been an important part of the promotional world. Have you looked at the beer, wine and “adult beverages” aisle lately? The creativity is quite amazing. Labels and boxes have powerful impact, and print is the medium. Among other things, versioning and demographic personalization is changing the face of this side of the business.

And finally, the third prediction from Issacs and Romano:

“The printing industry will see only 1 percent to 2 percent annual growth through 2040 and then begin to decline. That small growth isn’t sufficient to maintain the printing industry. This will cause mergers and consolidations and layoffs throughout that industry.”

According to Ronnie Davis, chief economist for PIA/GATF, we haven’t quite slowed down to that point yet but we’re close. Industry projections currently point to a 2.5 percent Compound Annual Growth Rate in 2006, and an optimistic 3 percent in 2007. We seem to be losing about 800 printing plants and 20,000 workers each year. The average size shop now has 27 employees as compared with 10 or fewer in years past. The good news is that Davis projects the need for 60,000 new employees each year due to attrition, changing technologies and skill sets. It seems only the strong will survive. This includes in-plants.

Terrifying (or Inspiring) Technology

Let’s put this into context in today’s world with the invention of the iPod. Within just a few short years, the music industry has been turned upside down. The traditional music store is dying even as we speak. Music­land, parent company of Media­Play and Sam Goody, has filed for bankruptcy. Add to that chains like Rhino Records that have closed, along with many independents, and you can see how pervasive this situation is.

Why did this happen? According to Paul Resnikoff, founder and editor of DigitalMusicNews.com, “Technology creates winners and losers. There has been a radical shift in distribution, consumption, discovery, all of those things.” Could the same thing happen to printing?

News and financial reporting is going electronic, as are documents requiring personal authentication, especially with the adoption of virtual and encrypted signatures.

Information collection such as forms, once print-on-paper’s domain, for the most part have become Web-enabled. And let’s not even begin to talk about the information collected on your everyday purchases whenever you shop online or use plastic.

Integrated solutions that offer closed-loop systems combining print and mail, e-mail and a host of other marketing media, whose responses can be tracked and acted upon as part of an overall solution, are just part of what customer relationship management (CRM) is all about. Only a handful of printers have adopted this mindset, however, and it’s this kind of technology that will drive the printer’s transformation to communication service provider. The good news is that the proliferation of CRM databases actually drives print.

Print is “Not Quite Dead”

The integration of the e-newsletter and PDF attachment into our lives, along with e-mail lists and blasting has penetrated many traditional methods of marketing communication. It is interesting, though, that many steps in a multi-media marketing campaign still use print as the most effective medium to reach their target audience. In the immortal words of Monty Python, print is “not quite dead.”

According to Vincent Mallardi, author of the annual Hot Markets Report, “Digital printing is one of the few sectors of the total printing industry in North America that’s growing well as more publications are migrating away from traditional offset printing. We’re forecasting that digital printing will hit 25 percent of total printing sales by 2010, double what it is today.”

Ronnie Davis, of PIA/GATF, reports that while total printing shipments increased 2.8 percent in 2004 over the year previous, “traditional ink-on-paper printing was up 2.3 percent, while toner-based print increased about 4.8 percent.”

How Will Digital Printing Compete?

A new plateau must be established for digital printing to take that next big bite out of the traditional market and combat electronic media. Twice as big and twice as fast would help, but without at least half the cost, there isn’t a driver for dramatic change. Therefore something besides what we understand as toner needs to emerge.

Because of the substrate variability demanded in commercial printing, sheetfed presses should continue to dominate the high-end market. 15,000 4/0 28x40˝ impressions per hour is standard today. In the digital world this adds up to a whopping 2,000 letter-size copies per minute (as color digital is usually counted in 4/0 8.5x11˝ impressions). Compare that with the Xerox iGen3, the fastest sheet-fed digital printer on the market, at 110 cpm.

Now imagine an electronic imaging and image transfer system that can keep up with that rated sheet speed. Available digital web presses are doing that today. The Kodak Versamark VX5000e is an ink-jet device that produces 2,180 letter size sheets per minute at 300x1,200 dpi with complete variability.

Bridging these gaps may not be so far fetched. All it will take is enough processing and imaging/print head power. Today’s desktops have more disk space than a network server did five years ago. Remember Bill Gates’ quote “640K ought to be enough for anybody.” Today’s paradigms are tomorrow’s antiquities.

More Digital Printing Predictions

“Non-print services will increase to 16.7 percent by 2010. These ancillary services include mailing, fulfillment, database management, digital asset management, CD services and other offerings.”
—NAPL, 2005

Taken collectively, those ancillary services translate into what it takes as a service provider to serve your customers’ needs. Historically a silo approach has been taken by printers. Perhaps the industry is only now coming out of the dark ages. The “communications provider” philosophy has got to take a broader hold.

The Future According to Vic

Now it’s time for some prophecies of my own. Since all of the predictions and forecasts I’ve included have been, shall we say, mundane, I’ve decided to make mine a little more thrilling. After all, you won’t remember this in five years anyway… right?

“Offset will survive.”

Surprising revelation huh? Until a future generation of digital imaging technology actually uses an economical ink, true digital printing will never achieve the economy of scale that only offset can achieve. The offset model will change economically as different segments shrink, but for at least the next 10 years, the market share will remain firmly in offset’s hands. What will and has to change is the manufacturing process itself.

“Within five years, organizations specializing in CRM will conquer the direct mail print space.”

Printers with expertise in database management, statistical analysis and data mining will bring new value to an overly print-centric industry. They are less concerned with the method and more concerned with quantified results. Printers must adapt new strategies and learn to provide strategic services, such as response management, in order to compete.

“By 2011 office-class digital printers will grow in overall color volume by 100 percent thanks to advancements in quality, RIP features, paper handling, off-the-shelf variable-data packages and cost reductions for consumables.”

This will erode smaller traditional and in-plant volume. In some markets the effect will be dramatic.

“By 2016 advancements in digital spot color will make offset duplicators obsolete due to ‘real ink’ digital imaging technology.”

Direct imaging (DI) presses will also be impacted as short-run static work will be more cost-effectively run on true digital equipment.

“Personalized 1:1 packaging will be commonplace as more products are purchased online, exploding the package and label customization market.”

Echo-Boomers (those born between 1982 and 1995, a third of the U.S. population) will be in their late 30s and 40s by 2026. They will have a full appreciation of “relevant” marketing.

“By 2021 POD publishing will migrate to ABMs (the book version of an ATM) if a hard copy is desired.”

Meanwhile, geezers like us still buy books the old way: from Amazon.

“2036. The paperless office would have become a reality had there still existed a place called an office. We’re so wired by now through holographic imaging, that paper becomes a refreshing pastime. Printing clubs spring up all over the country as offset presses are resurrected and books are produced once again just for sheer enjoyment.”

To end this article, I’d like to quote an article on the printing trade from The Penny Magazine published by the Society for the Diffusion of Useful Knowledge, December 30, 1833:

“Let us imagine the state of things in which demand for works of large numbers should have gone on increasing, while the mechanical means of supplying that demand had remained stationary.” IPG

A Preference for Paper

In the promotional world, the inclusion of data-driven marketing is changing the very nature of transactional documents, spawning our newest term, “transpromo.” Couple this with the following perspective from a July 2005 Pitney Bowes report on electronic vs. mail bill presentment:

“Recent studies indicate that the majority of U.S. consumers still prefer to receive and pay bills through the regular mail. Of consumers who do not pay bills online, 80 percent say that they never plan to do so. Among consumers that do not receive electronic statements, 83 percent say they have no plans to switch away from paper. Consumer preference for paper, convenience of current methods, and privacy & security concerns are cited most frequently as the reasons for not adopting electronic presentment or payment.”

Interestingly, some banks (including Bank One and Bank of America) are even making electronic payment less attractive to consumers. Banks earn billions of dollars annually from the “float” associated with check processing (and penalties from bounced checks) and, therefore, do not have an incentive to move customers to an electronic system.

Vic Nathan Barkin has more than 30 years of experience in the printing industry. He was the manager of Northern Arizona University’s Printing Services department for 12 years and recently served as solutions sales manager, digital printing, for Kodak’s Graphic Communications Group. A Certified Graphic Communications Manager with IPMA, he is also a past president of the IPMA’s Arizona chapter, and has been a presenter at ACUP and SUPDMC, as well as a regular contributor to In-Plant Graphics. Barkin is currently serving as “Digital Printing Evangelist” and business development consultant for Spectro, a Denver-based marketing services firm specializing in Web-to-print hosting, digital and conventional offset printing and collateral fulfillment. In addition, Barkin serves as an executive board member of the Mountain States Printing Education Foundation, and is an active associate member of the IPMA Rocky Mountain chapter. You can contact him at: vicbarkin@netscape.net

The Sustainability Game

What makes an organization strong and sustainable? First and foremost is competent fiscal and resource management. It has long been said that understanding your financial picture through benchmarking and by utilizing business and industry ratios provides the ammunition to properly plan, implement and defend against those who would like to see you cease to exist.

The second factor impacting an organization’s strength and sustainability is vision. This is the ability to effectively anticipate your customers’ future needs without sacrificing fiscal responsibility or having knee-jerk reactions to unnecessary surprises. It is educated and informed creativity.

Over the past decade there’s been a lot of talk about reinventing the printing business. It’s all about changing from being a “printer” to a “communications provider.” Anticipating change through an informed and educated vision is the only sure way to survive.

Third and most important to sustainability is the implementation and timely adoption of new or appropriate technologies and services. Bandwagons have a way of turning into stampeding herds very quickly in today’s world, as “digital time” is faster than “normal time.” Again, having a clear vision will avoid “knee jerking.”