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The End of NAPL/PIA Unification Talks: Squandered Opportunity? Or Necessary Pause?

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By Dr. Joe Webb
Published: September 27, 2012

I've been asked by some readers for my opinion about the recent end of talks between PIA and NAPL. So when I offer the opinion below, it must be understood that I'm just an outside observer. I know many of the players, but only as acquaintances as I see them at industry events here and there. I have no inside information. But this is the way I see it as an observer with a managerial and economic twist to things. If there is a unification of the associations, it has to be for the right reasons. The best outcome may be the exact opposite of what was being considered. Here's my take. The idea of unification has never interested me, but I understand why printers would be interested in seeing it come to pass, and why the associations might not. Just in personal terms, the printers would like to have just one organization to deal with; the association personnel would be concerned about what happens to them and their families. All sides understand what's at stake for everyone in the industry and also for themselves. The process of getting any two business entities together is rarely easy. Structurally, the NAPL side is pretty straightforward: it's a standalone organization. The PIA side is more complex because of its structure of affiliates and the national organization. Trade association experts tell me that PIA's structure may not be common, but it's not rare, either. Back when the industry was growing, local affiliates were havens for local printers and a thriving trade services sector. This organizational form structure was not really an issue, then. As the industry has changed, desktop publishing took root, and printers started to be more self-sufficient in binding and post-press, the nature of the local affiliates changed. Over time, the need to use regular local meetings to help coordinate the business interactions of trade services and printers and others diminished. Print businesses left the downtowns of central cities and went to nearby rim cities and suburban corporate parks. Others just relocated to the middle-of-nowhere if it made sense and they had access to transportation, such as a freeway. PIA's network of affiliates downsized accordingly through the years. Affiliate operations adjusted as best they could as they changed their services and re-directed their staffs. As it has always been, some affiliates are healthier than others. It is easy to forget that this is not a national industry: there can be quite a difference in the nature of printers and their customers from region to region. Affiliates offer services that are appropriate to their areas. While affiliates share goals for the good of the industry, their localized approaches are not always similar. Some affiliates are very active in insurance and other financial needs of their members. Others emphasize different areas, such as training and outreach. Sadly, most affiliates have seemed to be dealing with attendance issues at their events. That revenue stream, which used to be predictable and strong, is now often haphazard and sometimes a trickle. Nonetheless, affiliates are primarily independent organizations, close to the marketplace and their members. So it is understandable that merging the two organizations would have its practical and legal obstacles. Each association was built with different visions and constituencies and for a different kind of printing industry. It would be easier if the industry was healthier and there was significant membership overlap between the organizations. But if those two assumptions were true, there would be little reason to consolidate other than convenience. There is no large membership overlap to tap into. Printers, strapped for cash and time, have been choosing their one preferred organization for years, keeping one membership and dropping the other. In the race against digital media, would printers be better off joining something like the Interactive Advertising Bureau rather than PIA or NAPL? One wonders. There have been many unfortunate things in the process of the discussions. Rumors started to circulate, some of a cynical nature. Public documents with the salaries of key association executives got into the industry grapevine. Some printers were pretty upset: here they were in a daily marketplace trench war, battling for their share of a shrinking business, toughing it out with the bankers knocking louder at their doors, sweating out their second and third mortgages. Yet these data looked like some folks in suits were in posh offices pulling down big salaries without being sensitive to the struggle. Then another rumor got around that the only thing holding things back was the golden parachutes that those executives would get. Nothing like out of context rumors, and even rumors of little truth, to spice things up. These things didn't help, but they underscored the emotional importance many printers placed on the initiative. They really want the associations to succeed because successful associations reflect the success of their members. But they wanted proportionality and and some sense of fairness, too, that recognized how tough the print business had become. The only direct information I received about the discussions was at the PICA Summer Conference. There, Laura Lawton-Forsyth said to the members that the negotiations were taking longer than had been hoped, and they would not be done by the end of the year. There was an expectation that they would be completed by the middle of 2013 as all of the details were addressed. Just weeks later, the announcement was made that “unification” talks had ended. The structural differences of the two organizations always implied to me that a successful joining was highly unlikely. They could be overcome, but it would take time. I have always been concerned that any joining would be saddled with legacy issues that might hinder the new organization's effectiveness with hard to predict transition risks and costs. That transition might get in the way of their need to engage the marketplace of digital media in a more aggressive and effective manner. Therefore, I have always felt that it would be better for printers to make their choices with their own dollars rather than rely on the efforts of committees and negotiators as they find middle ground to get the deal done but not emerge with a market-focused solution. The fact that the two have little membership overlap is a healthy sign of that choice. Getting lost in the discussion is that having only one industry organization means that there is no choice. “Any customer can have a car painted any color that he wants so long as it is black.” In that case, is it wise to combine two organizations that are reeling from the harsh challenges of the marketplace, just as their members are? Or is it better to start a new organization that has no legacy issues, competing with the legacy organizations until they find new niches or wither away? I believe this is the much better course, as difficult as it may seem. Creating an organization that has only a future, untethered by the traditions or the obligations of past organizations, would seem to be a way to make up for lost time. Are there enough print businesses and vendors that would be willing to step forward and make that kind of investment? It's not likely, but it would be good for our industry to get a fresh start in this regard. One important financial issue: any new association would not have the support of revenue-sharing from Graph Expo and Print that NAPL and PIA do. It would truly be on its own. That may be a good thing in formulating a stronger, independent entity as it would have to attract its own financing with an extraordinary and compelling offer. With the close of the talks between the two organizations, there is great concern that it was a one-time opportunity that was squandered. I think they'll get back to the table, partly to pick up where they left off, but mainly to start fresh now that all parties have had a chance to think about things and get feedback from their members. Both associations are well aware of the communications and media competition ahead. New technologies intensify those challenges. Any delay means that a combined organization is more likely to be born of mutual desperation for survival rather than a bold synergy with a grander purpose. # # #

Dr. Joe Webb is one of the graphic arts industry's best-known consultants, forecasters, and commentators. He is the director of WhatTheyThink.com's Economics and Research Center.

What do you think? Please send feedback to Dr. Joe by emailing him at drjoe@whattheythink.com.

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