Press Operations of the Future: PIA/GATF Offset & Beyond 2007 - Part 1
May 11, 2007

Editor’s note: When I asked if he’d like to blog, Clint Bolte—he's famous for the George Will bow ties and straight talk about print operations—responded with, ‘What’s a blog?’ Along with the equally prolific Dennis Mason, Clint has been one of the print industry’s proto-bloggers for years, really—but until now with no place to accommodate the speed and volume of output. So today, Clint Bolte is a guest blogger here at GAM online. His contact information is at the bottom.

by C. Clint Bolte

Enjoy the informal networking
The Offset and Beyond 2007 Conference, April 30-May 2 in Toronto, was the first ever combined web and sheetfed enclave. It brought together the Web Offset Association and its 54 years of WOA Conference history, along with sheetfed content from PIA/GATF. The expanded event drew 675 attendees who heard extraordinary speakers, attended dozens of breakout and special-interest sessions and enjoyed the informal networking that these gatherings have become known for.

That “sucking sound” recalled
Featured keynote speaker was Brian Mulroney, Canada’s former Prime Minister and current Quebecor Board member. The Right Honorable Mulroney recalled the meetings with President Ronald Reagan that culminated with their signing the first free trade agreement between their countries in 1989. This was expanded in October 1992 to include Mexico creating the North American Free Trade Agreement (NAFTA). Immensely unpopular among labor circles initially, NAFTA reported $700 billion of joint trade among these three countries last year. Warning of the “sucking sound” of American jobs leaving for Mexico, opponents instead witnessed more than 20 million jobs being created in the United States over the ensuing years. Mexico recently surpassed Japan to become the U.S.’s third largest trade partner, even though their economy is less than half the size of Japan’s.

Challenges to security
Mr. Mulroney opined that government has two great international challenges in security and trade, including the Internet. He said the EU has a common passport allowing free movement of its citizens among the 25 member countries. This allows them to concentrate on external security issues. The more restrictive passports now being required between Canada and the United States “is going in the wrong direction,” he stated. These are internal borders to NAFTA. The security attention should be on the external borders.

Extending NAFTA: good idea
He offered the vision of completing the trade trilogy of the Americas to envelop all of North, Central and South America. This trade zone of the Americas would include 34 countries and 800 million people. This will require transforming political leadership rather than transactional leadership. “Leaders need to look to the next generation rather than the next election,” concluded Mulroney.

Canadians who use the U.S. Postal Service, really
Luc Desjardins, President and CEO of Transcontinental, in another keynote presentation offered his view of how the printing industry is changing. As the sixth largest printer in North America, Transcontinental expects most of its future growth to come outside of Canada as its market share in daily newspapers, magazines and direct mail has reached near saturation on its home turf. By offering deeper logistical support to their American clients into the USPS delivery network, they expect their clients to experience only a 4% postal rate hike instead of the broader 9% expected by many.

Why newspapers should hire commercial printers
They feel a real opportunity exists for Transcontinental to become the outsourcing print production partner for American Daily newspapers. The newspaper publishers would continue to concentrate on publishing, including advertising sales and management. A model for this strategy is their recently completed 15-year contract with Hearst to invest in a new printing plant with state-of-the-art press and inserting technologies to produce the San Francisco Chronicle. The contract is worth a billion dollars of revenue to Transcontinental, not including paper, when the new plant is built in 2009.

But it’s a really long sell
Such business arrangements typically have a long negotiation cycle of up to 18 months, as in the case of the Chronicle. Hence, Transcontinental has set up a separate division to sell, manage and implement this production outsourcing business model. Desjardins confirmed that they have no desire to get involved in any type of facility management arrangement for daily newspaper production. They prefer to bring their own management team and skilled operators into the new facility while avoiding legacy equipment.

The case study of digital book printer Lightning Source was another keynote address, presented by its CEO, J. Kirby Best. Owned by Ingram’s and headquartered in Nashville, Lightning Source’s driving impetus is out-of-print books. “Once a book has gone through its long selling cycle, people will continue to buy it as evidenced by triple digit growth out of old titles,” remarked Best. Founded in 1997, the firm now prints 1.2 million books each month with an average run length per order of 1.8 books for its 4,500 publishing partners. Accelerated growth has resulted in 17 new digital presses being added in the last six months alone.

Originally targeted for overnight turnaround from receipt of the web order through the entire manufacturing cycle, finished book delivery is now under 12 hours at a typical printing cost of $3.50 for a 200-page paperback. All financial elements of the transaction, from buyer’s payment of the book to Lightning Source’s submission of royalties to the publisher, are done electronically.

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