Kicking off the 10th annual On Demand Conference this morning, Charlie Pesko, one of the best known leaders in the printing industry and founder of this conference itself, discussed “Strategies for Survival and Growth: Refining the Business of Print” in his traditional keynote presentation. I got in there early, coffee and muffin in hand, for a good seat. Here are some of the highlights and key points.
Pesko noted the difficulties of 2001 and 2002, and did not hold out much hope for substantial improvements in 2003, and perhaps even into 2004. Print customers are more optimistic than print providers about whether print spending will increase, stay the same or decrease.
- Among customers, the group that expects increases outnumbers those that expect decreases
- Among printers, those anticipating a reduction outnumber those planning increases.
- For print providers, this translates into a clear reluctance for capital spending, with only 15% expecting an increase and 38% a decline.
Internet Adoption Impacting Print
NAPL economists have noted that rises and fall in print industry revenue closely match U.S. GDP. Since the mid-90s this gap is getting wider. CAP Ventures believes this is related to the adoption of Internet usage in the home.
- Home internet usage and low-cost ink jet printers has provided an outlet for pages.
- Brochures, collateral and other promotional material previously available only via offset printing is now available in any Internet-connected household.
- Displacement of print to electronic delivery and migration of print to non-production environments.
Offset in Decline
- Over 13,000 graphic arts establishments have closed or been acquired in the past 10 years.
- Between 1999 and 2001, more than 21,000 offset presses have dropped out of the market--a 12% decrease.
- Print is not dying--some segments are growing--but offset isn’t one of them.
Pesko summed up this portion of his presentation noting, “Losing print jobs to local competition is not the problem. The issue is losing print jobs to other forms of business communication. Pages are moving to other output options because of underlying industry trends. This won’t change when the industry rebounds. It won’t be business as usual.”
(In this analyst’s opinion, the shift to other output options may actually accelerate when the industry rebounds. This is why Pesko and others insist printers have to change their view of the business they are in and adjust to meet new market demands. Which is what Pesko covers next.)
Opportunities for Growth
Pesko says the best opportunities for growth come from:
- having a super-efficient organization (several sessions here at the conference speak to this issue)
- providing on demand digital printing
- providing value-added services above and beyond print
- Focus on process-improvement
- Coordinated procurement processes
- Shared data repositories
- Web as a common business tool
On Demand Digital Printing
- Convergence of computing, communications and printing
- Fits evolving needs of business world
- Easier to automate
- Fits with value-added services
- Emergence of universal coper/printer
Even though print services providers often offer much more than print, they are still often perceived as “just” printers. But about 30% of what they do is outside the press room. And in a recent NAPL survey, printers expect the component of their value-added services to nearly double in the next five years. Value-added services being added include:
- Fulfillment and mailing
- Document & content management
- Variable data services
- Design & photography
- Electronic document delivery
- Facilities management
The Pesko Prescription
- Redefine your business: become a business communications provider
- Print has become a value-added service for data, and print providers’ marketing efforts should reflect that reality.
- Don’t need to look to new markets and customers to build value-added services; build or expand your value-added services to existing customers to ensure future success.