On January 13, 2003, WhatTheyThink announced the addition of Dr. Joe Webb as a exclusive, regular commentator. Dr. Joe, now retired from his career in consulting and research, is well known in the printing and publishing industry as a thought-leader.
WhatTheyThink conducted this interview with Dr. Joe to bring our readers up to date on what he has been up to since the sale of his research firm, TrendWatch Graphic Arts, and to gain insight into his plans for contributions to the WhatTheyThink community.
As you will see from this interview, Dr. Joe is better than ever. Please welcome him to our community. You can reach him at [email protected].
WTT: Dr. Joe, it is a pleasure to welcome you to our WhatTheyThink family of contributors! Perhaps you could bring our readers up to date on what you have been up to over the last couple of years.
Dr. Joe: Thanks. It’s nice to have a family. Maybe this one will listen to me every now and then.
After the TrendWatch/Graphic Arts sale, I was involved in a transition process, working with the new director Vince Naselli, who has been doing a great job. As planned, my involvement has steadily declined as he achieved a firm grasp and forward-progression of the business.
I’ve also been taking a fair amount of family time in the process, too, amidst my writing and private consulting gigs here and there. It’s been nice not to travel the way I was in the late ‘90s, and I look forward to this new industry role.
WTT: Tell us a little more about your arrangement with WhatTheyThink? What are the kinds of things you will be covering and how frequently will we see you on line?
Dr. Joe: The arrangement exists because of their persistence. I really wasn’t looking for a long-term commitment like this, but they made it attractive in a variety of ways. Basically, I get to do what I like to do: comment on events as they happen and interpret what they mean for the industry. I have a wide range of areas that interest me -- including economics, management, marketing, and technology -- and I will have a lot of flexibility relative to the topics. I will have a weekly column that will be devoted to one subject, sometimes a collection of things. But what I am looking forward to the most is commenting on news events as they happen, again, where I think I can add something to the process.
WTT: So to paraphrase Mark Twain, I guess the announcement of your retirement was somewhat premature? What else will you be up to besides your contributions to WhatTheyThink?
Dr. Joe: I’m definitely retired from consulting after 15 very productive and very interesting years. It’s time to move on to career #3 (#1 was as a marketing executive, #2 was as a consultant, and #3 as an industry pain-in-the-behind).
As far as other things going on, I am a minority shareholder in the new TrendWatch business being run by my partner, Jim Whittington. That business focuses on the motion picture, broadcast, and video imaging markets, and will later extend the TrendWatch concept to other industries. And I am under contract to develop some e-learning marketing courses for Olle. I have some speaking engagements, too. So I’m quite busy, but enjoy the freedom I have.
WTT: It certainly does sound like you will be staying busy. I know one of the things our readers will be looking for from you is your take on the outlook for the printing industry in 2003 and beyond, and your view of the key trends that will be impacting us. A recent WhatTheyThink article quoted CAP Ventures’ Printer Confidence Index as predicting print industry revenue to grow 5.5%, with profits to grow 6.0%. Based on the year we just concluded, this seems highly optimistic. What are your thoughts in this regard?
Dr. Joe: This is the whole survivor bias thing again. The success of individual firms does not mean that the industry is doing well on a macro level. Surviving printers are doing a good job of killing their competition and growing their business. There are many printing businesses doing very, very well. But the print business overall is shrinking. People have always said that consolidation is a good idea, and now that it’s happening, they’re having a tough time understanding how it perverts industry data. (See Is Survivor Bias Distorting Industry Research and Economic Data?) I do believe that the industry will be healthier in the long run. But there’s not enough context being reported in most economic news. And also, printers are always optimistic in the beginning of the year, so I don’t know if the data is showing the natural enthusiasm of a new year ahead, or if this is a real net change in expectation. It wasn’t clear if this was seasonally adjusted or not.
WTT: What should the vendor community be doing to encourage the success of their customers?
Dr. Joe: The successful printer is skeptical about technologies and what vendors tell them. Printers are often more stable and successful than the companies selling to them. Look at the turnover in vendor personnel and the horrid stock performance of some of the vendor companies. Privately held successful printers definitely have a leg up on things. The vendors would be better off listening to printers and not the other way around. I have always heard the complaints from printers that there was no consistency in field sales personnel, and worst of all that the sales people really didn’t understand the print business. Instead they always quoted specs and financing gibberish, but nothing about building business as a partner.
WTT: How about the Associations? How do you think they are doing overall in supporting the print community and what could they be doing better?
Dr. Joe: Printers who are members of associations are among the most successful, most profitable print businesses. They have an innate curiosity about running successful businesses. That said, the associations have not done the most proactive job of alerting their members to the decline in print demand that the Internet gave us, and generally have had too optimistic a view of the future of the business. I have a feeling that they were too queasy to report anything bad, and that it was always essential to have a rosy cast on things. This is a good industry, but there’s too much sugar coating of economic data and not enough economic tough love. The associations do so many things well, so I don’t want people to think I’m negative on them, but there tends to be a culture of making everything sound positive. Their members can take bad news, because they see the reality of the marketplace every day, so associations shouldn’t be afraid of telling it like it is. It’s a tough business, everyone knows that.
WTT: Talk to us about some of the other emerging trends you think people should be cognizant of.
Dr. Joe: I’ll cover those in various columns. But there are still many long term trends playing out, like the replacement of craft with capital equipment, and competition from new media alternatives. Like I’ve said for a while, the commercial print business’ biggest competitors are not things like digital printing but rather, those things that facilitate the distribution of information without printing. Show it to me on a screen and let me e-mail it to someone instead of waiting for me to open the hardcopy mail and forward it or fax it or remail it.
WTT: You talked about the Internet having a negative effect on print pretty early on, and no one really believed you. What was all that about?
Dr. Joe: Yes, that was kind of strange, but I saw in 1995 what was going on, and how it could undermine print business communications. Some people forget that I have a Masters’ degree in Management Information Systems. I just saw all of the barriers that we faced there dropping rapidly and, more importantly, the rapid broadening of choice to information recipients and the ability to do incredible amounts of time-shifting of work. The flexibility and speed was just incredible.
The other funny thing was that people never realized that TrendWatch was designed, with the inspiration of partner Jim Whittington, as an Internet business. And, it worked! We distributed a few thousand Fast Facts e-mails every week, and the brand building that it did in a short amount of time was just amazing. We would have never been able to do those things in print. And then on the revenue side, Jim was way ahead of the curve in pushing the e-store concept for our business, and though a bit reluctant, I became a big believer. It taught me, or reminded me, that time is the most precious and unrenewable management resource, just like Peter Drucker said, forty years ago. TrendWatch would never have succeeded as a print-based business.
WTT: One of the areas that has been predicted to be a huge growth opportunity is variable data. I know you have not always gone with the crowd on this one. Where do you think we are with variable data, and what is your advice to print service providers relative to adding this capability?
Dr. Joe: I never predicted it as a huge growth opportunity. I think for the commercial printing business, it’s generally a drain on business. After all, if people really implement it, there goes the demographic binding business for bill stuffers and the like! Of course, some shops are doing well with it, but it’s a lot of work. They have had a hard job overcoming the barriers, especially of data base quality management and data flows. It’s not the magic bullet that too many people said it was.
I always liked the evasive phrase “print service provider.” Is a “print service provider” in the commercial printing business or not? The answer is “no.” The companies that provide variable data services are generally, if not overwhelmingly, not commercial printers. They are computer service bureaus and companies that serve the financial brokerages and banks. So there was already a market that was well-versed in personalized mail.
Let’s be real: statements, invoices, bills, etc. were always personalized. I’ve never seen a bill sent to “occupant” that got paid. And even this business will be in trouble with the migration to electronic delivery. I’ve been bombarded the past year with offers for getting statements online. Even for my e-store, American Express charges for printed statements now, but they are free if sent online. Personalized printing is not a safe haven for anyone.
WTT: What about color personalization? Do you think that model, as promoted by the digital color press vendors, will ever really take hold?
Dr. Joe: There is no conclusive proof that color personalization beyond statement printing pays for itself in the long run with sustained use. Studies I have seen indicate that price offers and other similar incentives offer virtually the same results as full-color personalization for less total cost. Can it increase the perceived value of a statement from a brokerage firm? Sure it can. Does it make people want to invest more? No. Communicators who design campaigns like direct mail and cataloging have a big bag of tricks to pull from to stimulate response. Personalized color printing is – unfortunately -- just one thing in that bag. It’s not a sustainable process that people use all of the time. In order for color personalization to make a big impact on the market as a growth area, it has to get out of occasional mode and into mainstream mode. There are too many examples of one-time campaigns, and not enough of people using it for all of their campaigns on a consistent basis.
WTT: So what does that say about the future of digital color presses and their ability to displace offset volumes?
Dr. Joe: Unfortunately, all the hype around variable data printing takes the focus off of the real issue: can digital printing replace the sheetfed press? The answer is a resounding yes, but the digital press manufacturers have done such a poor job marketing the equipment that printers think that they have to have variable print customers before they even look at acquiring a digital press. That’s wrong. Variable print is clearly NOT the only viable application for these devices. It’s surprising how many people are patting themselves on the back while in reality they have done a poor job of getting the right messages to the market. No wonder Xeikon went bankrupt and that Indigo was bought by HP for almost 1/10th of its highest stock price.
The other significant shortfall is that no one has made a sustained effort to work with print buyers, designers, and others to educate them on the value of color digital printing. I started calling for that in 1991 and in 1993, and in my own efforts with colordigital.com, and we’re still in the same place today. Ten years later, too many creatives have no clue that these technologies are even around. This is not a market that you turn on like a spigot of water. It takes years to develop a market. We’ve wasted 10 years and have nothing to really show for it. I know I tried. If you don’t build demand, the equipment won’t sell.
WTT: What role do you think direct-to-press technologies play both short- and long-term, and how do you think these products will ultimately affect CTP?
Dr. Joe: Direct-to-press will do fine, especially if press manufacturers can get the cost of including it on a new press down a bit. Off-line direct-to-plate is now in market maintenance mode. Sure, mid-size printers are getting involved, but that is a slower adoption rate and the benefits are not as sizeable in real dollars as they are in big shops to cause a rush to adoption by these smaller shops.
I wish the on-press imaging folks were being more aggressive. Selling harder isn’t being aggressive. The industry needs a revolution in its productive capacity, and direct imaging is part of that, especially for the mid-size shops. Sure, there is uncertainty about print demand, but please, productivity can help everyone, even in a declining market. The premium for direct imaging presses seems to be too high, and that’s not just me, that’s printers talking, when they compare the large presses with it and those without it. The cost must come down, and the range of presses with direct imaging as an option needs to expand. It would be best if there was no significant difference in price, but that’s another issue, and it will never happen. The switch to on-press digital platemaking should be a major industry initiative, but it’s not likely to be. Fifteen years ago, the imaging technology was on a Multigraphics duplicator, and then it made it to the GTO, a real honest-to-goodness press, and then the Quickmaster. Now we have interesting things like Karat, but we don’t have it on very many big 6 and 8 color 40 inch presses yet. I hope it gets going soon, but I’m not seeing as much activity there as I think there should be.
It’s not so bad, though, direct-to-plate really works after all these years. People forget that I’ve been watching it for 25 years. While there isn’t rampant demand for either technology, I believe it will be a sustained market.
WTT: There seems to be a bit more action in the area of e-books these days. Are you seeing any significant adoption rate yet? What types of books do you think will transition to this model first?
Dr. Joe: E-books have been slow to gain a foothold, but I have liked them. I even get some magazines using Zinio. I find the whole format rather fascinating. I was hoping that PDAs would have been the e-book platform of choice, but I guess now the big hope is TabletPCs (don’t tell anyone, but they’re really notebook computers and Etch-A-Sketch in a $2000 package).
Business books, especially short run specialty stuff like reports will do very well in the e-book format. But remember, a lot of material is distributed in PDF format and in many cases, should count as e-books.
The Zinio product is interesting, but has lots of bugs and has some clunky navigation, more limited than a web browser, and not as robust as Acrobat. Their biggest issue for me is their lack of administrative capability. I can’t get my magazines regularly, and their customer service is virtually nil, and when you do get someone, they have no clue how to help you. That won’t help adoption rates at all. But I do recommend that people download the Zinio reader and some of their free magazines. It has good possibilities if Zinio can fix their problems.
WTT: What about monthly trade magazines? How should they evolve to serve their audience better considering that more and more people get their news online.
Dr. Joe: Loaded question, huh? This must be from Randy Davidson. (WTT president) No one should depend on a single information source, but you should have preferred information sources. Trade magazines are in a similar situation as were newspapers when they faced competition first with radio almost 70 years ago and then with television 50 years ago. Printed magazines have the opportunity to do some neat in-depth reporting that doesn’t lend itself to the immediacy and constancy of the Internet. But their role can no longer simply be the reprinting of press releases, doing casual interviews and showing the photos of executives in front of a printing press. This will be a traumatic change for some, I know, but it’s occurring in all industries.
Some of the magazines are trying to have an Internet presence, but the media are so different that it’s hard to do effectively. Time will tell, of course.
We have to remember why the magazines and publications exist in the first place. Industries have a culture and a need for information that the publications reflect and transmit. Look at healthy industries and they have healthy, vibrant publications. But most of all, there is a discussion going on with the readers with challenging editorial that takes a stand and demands something from the reader. As I look at the wide range of industry publications in a number of industries shows that this is unfortunately not happening enough.
WTT: What should printers be doing relative to offering cross-media services and content management?
Dr. Joe: Printers need to supply their customers with the ability to leverage their messages in as many ways as possible. This doesn’t mean that the printers have to drive the process, but they have to work in a way to facilitate the process. As far as content management goes, the owners of the messages are the ones who should manage them. The printers are the ones who should facilitate and work on their behalf. That’s not management, that’s logistics. I’ll be writing about this whole area soon.
WTT: I often hear printers say they can’t charge for content management services. What is your perspective on that?
Dr. Joe: They are correct. Printers provide logistics, and they can charge for that. Content management is a tool. It would be like carpenters charging you every time they use a hammer. They don’t. They charge you for a project. That’s the way it should be, and print buyers have a legitimate expectation that the printer will have the right tools for the job.
WTT: How important do you think it is for printers to have a web storefront?
Dr. Joe: Not. It depends on the customers, products, and everything else that goes into running a business. Web storefronts play an important role for some printers, but there are many who do just fine without them. It is a function of what your target audience is and the way that audience wants to be reached. The worst thing is to have one just to say you have one. That’s not strategy. That’s just keeping up with the Joneses. The whole dot-com collapse proved that you can get into a market late and not be penalized. Look at the lessons we’ve learned about what works on the Net and what doesn’t. I’d rather be starting an Internet business today than two years ago when expectations had no basis in reality. At least now I know what would work, and more importantly, what strategic goals are appropriate.
WTT: Dr. Joe, we appreciate your giving us this insightful preview into what we can expect to see from you going forward. Can you offer us any closing words of wisdom?
Dr. Joe: No closing words. Hey, we just started!
Thank you Dr. Joe. We look forward to working with you.