I'm often asked when to things will start improving again. It's a strange question, because I can honestly report that I have been asked this question for about six years running. The only thing that has changed over those six years is the facial expression of the questioner. Now it seems more pained.
We're in an official recession, so that makes things officially bad, I guess. When they weren't officially bad, people had the sense that it was just bad for them, like fate had singled them out for bad business conditions, and blue skies and sunny days for everyone else.
After all these years, however, there is still the expectation that when the economy turns around that the printing industry will turn around, too. Sorry. That assumption can't be made. Commercial printing shipments, on an inflation-adjusted basis, have been down for seven consecutive quarters, and this current quarter will only make that eight. That's twice as long as the general economic recession. While the economy was growing, we went through a period of 15 consecutive negative quarters a couple of years ago.
Another idea that should be set aside is that that after recession, whenever that is, we will return to "business as usual." I don't know what that means. In practical terms, there really is no such thing. It's important to have fantasies, but this should not be one of them.
The printing industry will be vastly different after the recession ends than it was going into it. This industry always changes, especially in recessions. Unlike those of the late 1970s and early 1980s, and also the 1991 recession, there is no technological change working in our favor that is reducing the total costs of print or expanding the potential market for it. We went through the launch of digital prepress in a recession
Technological change does not wait for economic recoveries. Knowledge moves ahead regardless of economic circumstance. One would think that adoption of technologies is slowed in tough economic times, but there can be great leaps of adoption because of economic distress as pressures to change costs become greater. One news item particularly struck me as an example.
Last week, Marriott Corporation announced that in its first 100 days of making room reservations available using mobile devices (such as iPhones) it had booked $1.25 million in reservations. We already know that Dell Computer had attributed $1 million in orders over 18 months over Twitter. The company has more than 12,000 Twitter followers and offers them exclusive discounts. Mobile marketing will only be bigger when the recession is over.
The other day, Hearst's legendary publisher Cathie Black said that magazines would start thriving again. She said that's what happened after 1991, and it will happen again. Sorry. Magazine circulation has been flat for nearly 20 years, through booms and busts, even though one would expect that population growth alone (just under +1% per year) would keep a floor under the business. Magazines are in deep trouble.
Just consider what has changed since 1991, the last real recession we had (and even then it was mild compared to 1981-1982). There was no consumer-driven Internet. There was no Facebook. There was no iPod. There were no e-books. There was really no e-mail. There were no online PDFs. There was no XML. There was no Twitter. No Google. No YouTube. There was no instant messaging. Cell phones were bulky, and they were just phones. There were no worthwhile PDAs.The Mac was seven years old. Windows barely worked. No netbooks. I could go on and on, even more than I have already. Ms. Black will be really disappointed. The world is very different. There are more cell phones in use in Africa than in the USA. (Other cell phone statistics for the USA can be found here). Emerging economies will be hard core online media users.
The most important changes I have seen this year in monitoring the accounts of media strategy is that print is losing its authority as a medium in favor of search engines and that campaigns should be planned using the web site as the strategic core for advertising and promotion programs, with other media as supportive offshoots of that base.
All of this leads to this essential question: What will the post-recession successful print business look like?
First, it is print process agnostic. That is, it reflects the growing perception among buyers that selection of the print process is no longer critical except in process-exclusive situations. Offset or digital, buyers will consider the selected process as meaningless in their overall decision. Recommending a certain print process over another will become less important, often viewed as complicating a decision unnecessarily. Printers need and integrated shop floor that offers flexibility for the best process to complete the job within the proscribed constraints important to the buyer, or the nature of the content, and within their desired budget.
Second, print buyers buy an outcome, the effects of using the printed goods, not the printed goods themselves. No one engages in an economic transaction unless they consider the benefits to be greater than their costs. Buyers have a desired result in mind when they finally choose to use print. In some cases, print will be the only medium used. In other cases, it is not. Printers rarely know the other expressions of the content they are printing. This wasn't the case years ago, but desktop publishing changed this when it put all of the power of content in the capabilities of designers and creatives. Prepress used to be our gateway to understanding print jobs' purpose. Post-recession printers will, and must assist in making the other media formats possible. They must also be in the position of recommending other formats and facilitating the deployment of that content.
Third, post recession print businesses have a seamless integration of information technology workflow, both administratively and for production, from the beginning to the end of their entire business process, before the job is created and after the job done. Web-to-print is just a tiny part of this process, though it will be the most visible to print buyers, serving as the front door to the entire print business.
These are not new concepts, but the length and depth of the recession create challenges to the existing print business. Current equipment was based on a different marketplace, and freeing oneself from the legacy production of the past to the print business of 2011 or 2012 will take some doing.
Those companies focused only on survival will not make the transition. They are only interested in figuring out how to buy time for themselves using their current business methods, equipment, and ideas. Getting past "survival-only thinking" requires a vision of what clients will need three and five years from now. That's risky because the clients don't even know what that is. That's what the entrepreneurism we need is all about: leadership and creativity.
Being obsessed with survival alone prevents a company from being forward-looking and proactive and can kill the optimism of employees and management. Reposition and restructure the print business now; get out of survival mode as quickly as possible. Obsessing over survival alone is counterproductive and is a sign of larger problems.
(NOTE: Consultant Bill Farquharson was one of the people who got me thinking about this with a discussion and a recent column. Thanks, Bill!)