Commentary & Analysis
Where in the world is Frank? Episode 4
By Frank Romano
Published: May 16, 2008
Episode 4: Frank in the Future
It is dark now and I see the lights of a cargo ships in the distance. We are in the Southern Hemisphere and it is a clear night and I see every star in the firmament -- but all the constellations are upside down. I see the three stars in Orion’s belt but none of the others are where I expect them to be.
We crossed the International Date Line and lost a day. At my age, I cannot afford to lose many days. Now we are one day ahead of the East Coast, so I am actually in your future. I have been predicting the future for a long time, and now I am actually here.
There are air taxis, time travel, space tourism, feelies, and all those things predicted at one time of another. OK, I lied. Tomorrow looks just like yesterday.
The International Dateline is +12 hours or -12 hours from Greenwich, England, which is 0 degrees longitude. It is not a straight line so as to avoid dividing countries like Fiji or New Zealand, so it sort of gerrymanders around the Pacific Ocean. If you are going west, you lose a day; if you are going east you gain a day. You all remember that Jules Verne used this phenomenon in “Around the World in 80 Days” when Phineas Fogg realizes that he arrived back in England in time to win the race.
Now that I am here in your future, I may as well talk about the future . . . by starting with the past. I often go to the rear (aft) of the ship. It is appropriate to look backwards while going forwards.
The forces now affecting the global printing industry began to form like the eye of a hurricane in 1995. In the US, there was a paper shortage and the Federal Government issued the Paperwork Reduction Act of 1995 which gave agencies carte blanche to find alternative channels of information distribution.
The Internet already existed and the hyper-linked World Wide Web had been created by particle physicists in Switzerland. But it was still code- and text-based. But in 1996 a group of graduate students at the University of Illinois invented Mosaic, which became Netscape and the graphical browser changed the face of the Internet.
Adobe’s Acrobat was introduced in 1991 but reached a critical mass of use in 1995 as a standardized method for information presentation. PCs proliferated and more and more of us went online.
The result is evident today -- of all US Federal information printed in 1995, only 11 percent remains on paper.
When the volume of print drops, there is no need for all of the existing printing services. In 1995, there were 62,000 printers in the US. That was the highest it would ever reach. Today is near 35,000 and probably will drop to about 30,000 before stabilizing. However, if you count copy shops and inplant operations, print is not in bad shape.
This same trend repeated itself throughout the industrialized world. The loss of commercial printing firms affected paper volumes, equipment sales, supplies, consultants, and every other aspect of the printing industry.
But ironically, from 2003 until today, printing industry revenue has been climbing. Did printers raise their prices? No, they incorporated value-added services in their mix. It is fair to say the print is considered a commodity (see Dr Joe’s comments on commodities), and printers can only blame themselves. But some printers discovered that mailing, fulfillment, database, and creative services can bill at higher rates because print buyers see them as high-value services.
This was engendered by digital printing. Wide-format inkjet and color-based page printers have challenged tradition print processes. Thus, flexo, gravure, and offset litho have lost volume to each other and to digital. Gravure publication volumes are migrating to web offset. Short-run sheet offset is migrating to digital. Wide-format inkjet is usurping much of the screen printing signage volumes.
These changes are global in nature, and printers are struggling to balance the new and the old -- retaining legacy equipment that made them so much money over the years or replacing or augmenting it with new technology. Printers are struggling to find the people and skillsets for both the legacy equipment and the new technology. They ain’t see nothing yet. The new IT skills needed by the printing industry will put it in competition with every other industry that needs IT people -- and that’s every industry.
We are now enmeshed in the brave new digital printing world. Those who succeed will be integrated, innovative, Internet-centric, and possess an intelligent workforce. Small, privately-owned printing firms, the mainstay of our industry, will be challenged the most. But they, like all printers, will re-invent themselves and we will enter a new age of print prosperity.
Printers are more adaptive than any other species of business. Most of them have made the transition from letterpress to offset litho to phototypesetting, to desktop publishing, to scanning, to CTP, to digital workflow, and now to digital printing. Show me other industries that have made such quantum leaps in technological change -- all in the space of 50 years.
But I still find that printers are in the past. They have survived so many changes that they think they will survive this one if they can just wait out the competition. I met a printer who said their business was up. I asked what they were doing. Nothing, they said, the other printer in town went out of business. This is not a joke; I hear it more and more.
They say that printers like the status quo and I contend that other than the 500 years of letterpress, there has never been a status quo. Each year the printing industry worldwide invests $240 Billion in new equipment and systems. Thus, we are constantly changing, upgrading, and improving. Some printers do it sooner and some do it later.
Too many printers are locked in a legacy printing prison. Some are still using film and older presses with no automation. They think their costs are less but they are paying a high price for labor -- from a shrinking labor pool. Within a decade there will be no one to run old presses. Unlike the days of letterpress and Linotype, there is no commonality of equipment, which makes for un-standardized skills and thus a shortage of workers.
Around the world, the high-profit printers control their costs. How? They invest in technology and training.
In Asia, right now, they have the advantage of low wage rates -- and no real legacy equipment so they are installing the most advanced technology -- and can thus compete with old technology on two levels. Asian printers are ahead of the curve -- because the printing industry in their countries was restricted for a long time and then one day the market and the money opened up. There may be more up-to-date printing equipment installed in so-called Third World countries than in North America or Europe.
The rise of the small printer
After WWII offset lithography was responsible for the largest growth in printing ever. Small printers sprouted up everywhere with used Multis and used AB Dick 360s. AB Dick probably never made a new 360 because almost all of us started with a used 360. I think they manufactured used presses. I contend that this is actually occurring today -- if you accept the fact that copy shops are printers. I remember when letterpress printers said that offset printers were not printers. Copy shops are adopting digital page and wide format printing. Sign shops are more and more digital. The new quick printer may be the new copy shop and the new quick printer may be the new commercial printer.
Copy shops are mostly small shops and they are everywhere. In Vietnam is counted 11 “photocopy” shops in the ancient city of Hue on our brief tour. But they do not make copiers any more -- they are multi-function printers -- digital printers. In Thailand I met a printer with high-end digital color printing -- they had started five years before with a few copiers. Every color copier and printer in Vietnam must be registered, but throughout the Pacific Rim copy shops (or stationery printers, as some call them) abound. Do not ignore them -- they are the future of print.
If we re-counted industry firms under this definition, we would see that we are actually growing in number of establishments. Revenue growth is a different story. Even the NAICS system segregates copy shops and sign shops as well as quick printers. A small printer is a small printer is a small printer. And the commercial user of a digital printer is a printer.
Every copy shop or sign printer or even photo printer is a seed that can grow into a commercial printing organization. I found one commonality among them -- most have wide format inkjet printing. Even in developing nations like Vietnam, signage was everywhere. In Hong Kong and Singapore and Bangkok, building wraps and large signs were everywhere.
Every day is another future and printers must deal with it. I recall a researcher who said “Predicting the market 20 years from now is easy; it’s what will happen tomorrow that scares the heck out of me.”
Technically, by crossing the International Dateline, I have been a time traveller. The Queen Victoria is my time machine. But, by the time you read this, I will be back in the present . . . and can truly say that I have visited the future.