2001: A Print Odyssey

Printing managers undertaking a business journey into the new century must consider a host of factors, from the general economy and buyer demands to electronic media and toddlers using computers.

Staff -- graphic arts online, 12/1/2000

A world of anytime/anywhere imaging, coupled with soaring demands from print buyers and changing preferences among consumers, is putting both new challenges and opportunities in the paths of printers.

In the meantime, of course, managers must deal with their regular demons-surviving against heartless competitors, keeping the heavy flow of more or less traditional jobs successfully moving through their shops, and making the best use of new software and systems-plus they must figure out what to do with e-commerce (fight the concept as a competitive or "commoditizing" medium, or embrace the tools to improve internal and external operations).

Then there's the effect of the general economy: after nine years of uninterrupted quarter-over-quarter growth in Gross Domestic Product, economic analysts warn about a sputtering performance in the near term and a possible slide into recession in the longer term.

But the recent Vision 21 study reported that the printing industry didn't do all that well in the prosperous decade just ending, in fact generally underperforming GDP levels by a point or two. Based on that track record, the analysts contend, why should print be expected to do exceptionally well in a slowing economy?

Prosperous baby boomers

There are, of course, counter arguments, presented by analysts who are convinced that simple demographics will save the day for the economy and for ink on paper.

Say some observers, the leading edge of the baby boom generation, some 25 million people who account for one-third of the total, are now in their early 50s. More specifically, many are in their peak earning years, and, with children through college, are beginning to spend serious money for durable goods, leisure and lifestyle goods, and for discretionary purchases, such as magazines, newspapers, books, and other printed matter.

Moreover, more people in that leading edge are college educated themselves, which generally means that their literacy levels, and thus their expected consumption of printed products, are comparatively high.

An educated viewpoint

Professor Frank Romano, chairman of the Rochester (N.Y.) Institute of Technology's School of Printing Management & Sciences, in a keynote address at the recent Xplor 2000 event, highlighted the findings from a soon-to-be-released study. Romano led the effort with a team of researchers looking at "Printing in the Age of the Web and Beyond."

The 200-page report was sponsored by the Electronic Document Systems Foundation and conducted by graduate students of California Polytechnic State University, Clemson University, and RIT. Team members synthesized comments regarding the future of print drawn from a diverse group of 2,200 people, including high school and college students.

The study, Romano said, stresses that print will continue to grow, albeit at a slower pace, but that electronic alternatives will grow at a much more rapid pace, and that the Internet, while negatively affecting some print products, will positively affect others.

Study findings

Key conclusions from the opinion study include the following:

• Rising postal costs [expected to become effective next month] will exert pressure on periodicals publishers to distribute some portion of their circulation in electronic form. Postal rate rises are expected to cause a decline in catalog page counts.

• E-pubs will become a threat to traditional magazines and journals as e-reading appliances improve.

• ATMs for book printing will evolve; thus, bookstores will, in part, become on-demand printout and downloading centers.

• Self-publishing will evolve into a major market by 2020, with families routinely publishing personal newsletters, journals, and other products.

• By 2010 e-mail and physical mail locations will be linked, ushering in the direct e-mail market. Personalized direct mail will grow significantly over the next two decades.

• The consumer catalog will continue to exist as a supplement to the given company's Web site, but the business-to-business catalog is expected to move almost entirely to the Web.

• Junk mail and spam will continue in usage, and marketers will be challenged to avoid both through targeting approaches.

• Transaction printing will grow over the next 20 years as the transaction document morphs into a promotional vehicle as well.

• The use of personal digital signatures will enable the use of more electronic legal documents, but some form of print backup will be mandated.

• Brochures, flyers, and booklets used as advertising and promotional material will have no electronic counterpart.

• In a longer-term scenario, print will continue to grow for the next 40 or 50 years, at which point it will begin a gradual decline. Over this period, ink will yield volume to toner and ink-jet imaging as digital printing devices take volume away from the analog printing press as a result of significant growth in print-on-demand and short-run printing approaches.

The comfort in print.

"We're using more paper now that at any time in history," Romano told the Xplor audience. "When the subject of print comes up, emotions stir. In the study interviews, people actually told us how much they love books and paper. No one said they loved their computer."

Romano noted that people have had 550 years to get accustomed to ink on paper. He added, "History shows that new media causes old media to change, not necessarily become extinct. Pieces of old media stay around; there are hobbyists today still using handset and metal type."

.is generational in nature

But, Romano noted, in his view the crux of the discussion about media preference is this: "You and I will not be the ones who will decide the future of print; rather, the decision will be made by our children's children. Kids 18 months old are playing with computers, which is far different from our parents' and grandparents' generation.

"To young people, reading from the screen is as natural as reading from paper is to us. The future always belongs to the next generation, so the future of print is in their hands."

The difficulty of predicting the future of print, he continued, is further compounded by the definition of terms. Romano said, "Frankly, calling print a document does not help. At this [Xplor] show, I saw smart documents, intelligent documents, dynamic documents, digital documents, and even portable documents. By the way, what's an unportable document? 2,000-lb. bond?"

Exhaustive list of products

He explained that the study examined 100 categories of printed products, everything that is reproduced on paper substrates. "By understanding each of the components of print, especially since each has a different future and a different scenario, the total of each of those components provides a glimpse of print tomorrow," he said. "Some printed products will do well and some will not. People trying to predict the future tend to focus on one product, then, if that's going down, they extend that curve to the general industry."

Romano concluded, "We tend to overlook the amount of information that print helps convey to people on a regular basis. One Sunday edition of The New York Times contains more information than a person in 1400 had access to in their entire life."

"Dominant display mechanism"

"Print on paper will continue to be a dominant text display mechanism for decades to come, although electronic alternatives-especially for distribution purposes-will steadily gain market share." This statement comes from Michael Rogers, the editor and general manager of Newsweek.MSNBC.com and vice president of Washingtonpost.Newsweek Interactive.

Rogers spoke at the recent annual conference of NPES The Association for Suppliers of Printing, Publishing and Converting Technologies.

He described paper as "a great display device-cheap, portable, high-resolution, and unbreakable-but it's an undesirable transport device because of its physical size and weight." Rogers added that, in his view, systems will have to evolve to bring the actual printing of information as close as possible to the point of consumption.

As for the Internet, Rogers felt that its real advantage is its open standard technology, a unique characteristic that would make it very difficult for a single company to succeed in promoting proprietary standards.

Convergence and children

Rogers said that the convergence of information appliances will develop to a point where "all media, from voice to text to video, is handled in digital form" and capabilities will continue to increase while their prices decrease. At the same time, children growing up with the Internet and interactive media will increasingly expect forms of communication that permit customization and contain tools as well as content.

As an example of including tools in content, Rogers compared the static content of classified advertising in newspapers with Internet ads, which include such tools as search, automatic notification, and agent-based bidding.

"Much of the newspaper's other content-stories and photos-still work better on paper. But it's pretty clear to everyone that want ads just work better on the Web," he said.

For publishers, he went on, the challenge is to figure out how to tell stories across all media types, combining interactivity with narrative, for example.

Likely rivals to printing

In the delivery of information, Rogers cited three developing technologies as potential rivals to centralized printing: printing at home, use of digital tablets (e-books), and on-demand printing. Because of likely pressure from these technologies, he said, "all printing will have to take place in the context of a 'digital information foundry.' All content must be digitally stored from the start; it must be dynamically linked to other digital assets (audio, video, animation), and it must be dynamically stored so that it can be delivered to multiple kinds of printing or display devices."

But providing on-line information is proving to be a costly for print publishers, Rogers said, noting that sites are expected to function around the clock and deliver expensive content such as audio and video along with text.

Elusive business model

And, he noted, publishers have yet to develop a truly successful advertising business model for the Web, noting that Web advertising is much closer to direct selling than to display advertising. "Some magazines and newspapers are beginning to report substantial revenue, but at levels that don't cover the costs," he said, predicting that "Web advertising will become a good business, but we don't know what form it will take."

He continued, "For the foreseeable future, creating synergies between on-line and print products to maximize revenues from both will require smart management." Among the uncertainties that lie ahead, Rogers said, is the potential for a shakeout in Internet businesses, plus the threat of government regulation (resulting from citizen concerns over security, privacy, and monopoly) and threats to government control of information and tax bases.

"What form this increased regulation will take is still not clear, but as it emerges, it will probably return some advantages to established companies that are familiar with competing in a regulated environment," Rogers surmised.

A stern warning to change

The future will belong only to those printers who quit thinking and acting like traditional printers and instead transform themselves into graphic communication solutions providers.

This stern warning comes from industry economist and business analyst Andrew D. Paparozzi, who spoke at the 50th annual conference on critical trends sponsored recently by the Research & Engineering Council of the Graphic Arts Industry.

Other upcoming trends addressed at the meeting were the effects of e-commerce on the printing industry, the severe employee shortage, ever-worsening price competition, the enormous costs of staying technologically current, and the need for an industrywide standard for automation and integration of the entire supply chain.

Information's the thing

Paparozzi, the director of the Printing Economic Research Center, part of the National Association for Printing Leadership, said, "We must get over our manufacturing mentality and become companies perceived as creative services companies-managing and selling pure information."

Printers haven't had to worry about the economy for at least five years, he added, but they do now, and, in Paparozzi's view, such worries are certain to be compounded because of some "deteriorating" fundamentals in the economy.

Soft landing or hard

In any event, it's a 50-50 call as to whether the U.S. economy will encounter a "soft" or "hard" landing. Paparozzi's soft-landing scenario calls for print sales to rise from $89.1 billion this year to $93.4 billion in 2001 and $97.2 billion in 2002. A hard landing would result in growth to $92.2 billion next year and $94.2 billion in 2002. No slowdown in the general economy would mean sales of $99.4 billion by 2002, he added.

Later in the R & E Council program, keynote speaker Guy Gleysteen, director of printing for Time Inc., focused on the impact of the Internet on printers and publishers, including developments in alternative publishing technology, the move toward Web-enabled architectures, and the need to move away from old competitive-bidding models to embrace a supply chain management approach.

"I was struck that, when looking for a breakthrough technology I could cite here as an emerging trend affecting publishers, I could not find one outside of the Web," Gleysteen admitted. "There just isn't anything dramatically affecting us other than the Web and what will happen there. Ultimately, this is the strongest argument of all for focusing on the supply chain."

Gleysteen continued, "We cannot count on a new technology to improve the bottom line or take attention away from what we all need to focus on-and that is how to do business with each other much more intelligently. Gone are the days of the 'open-capacity' game, playing one supplier off against another for the simple goal of trying to achieve lower prices."

As for electronic books, Gleysteen, saying he thought such technology is years away from being a realistic competitor to printed books and magazines, pinpointed such problems as a lack of conversion ease, data compression issues, metadata standards, media asset management, and digital rights management.

No easy ways to deliver content

"Delivery is also a huge, huge issue," he noted. "There are no easy ways today to deliver electronic content to e-books. Most of it is dial-up, Web interface-which is clunky. If you happen to be on the road and feel like a good read, there's no practical way to obtain a new book for your reader.

"Also, while IBM is about to release a flat-screen, active-matrix display that has the same resolution level as print, it's very expensive. So until consumers have access to something that is portable, cheap, and flexible-and I mean literally as flexible as a magazine page-we really aren't going to see portable e-publishing take off."