| Tagged in: Recession , Printing Industries , Printing Firms , price driven , kate dunn , Digital Printing , Digital Innovations Group , DIG Creative , dig , Deep Pockets , conferences , Automation | Jan 6, 2010 |
| Posted by: Kate_Dunn |
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Nearly 90,000 Print Industry Employees lost their jobs in 2009 (footnote 1)
Trends indicate almost 7,000 less printing establishments by end of 2010 (footnote 2)
Online advertising to pass print ad spend by 2011 (footnote 3)
1 Trillion Unique URLs on the Web (footnote 4)
This industry is rapidly changing, and from my vantage point it will be very difficult for companies under $5m to survive if they don’t change to meet the challenges and opportunities. They will not have the critical mass to compete in an industry that is becoming increasingly price driven. Their size makes it hard, if not impossible, to invest in the automation needed to profitably produce print at a price the market will bear. Add the expense of a sales team that are little more than order takers and you have a going out of business strategy.
These companies may well be dying a slow (or maybe not so slow) death and many don’t realize it. While these businesses are dying, the principles are using up their personal wealth and retirement just to stay afloat.
Everything needs to change, business models, strategy, and sales practices and yet, attendance at industry conferences, where print industry leaders might learn what they need to know to navigate these changes, is way down. When asked about this, leaders say they are too busy making sales calls, too busy doing the jobs of the people they have laid off and too poor to pay for the cost of the conference and travel. For those of you who have these excuses, you are effectively saying: “I’m going to keep doing what I am doing which is losing me money and threatening my survival because I can’t afford to stop doing it for even a few days.” Does this really make sense? What else is more important?
The recession exacerbated the problem, it is not the problem. At the root of this crisis is but one fact: there are new digital ways to communicate and for many things they work better and are sometimes more cost effective than print or at least traditional print. Someone built a better mouse trap. Period. This transition would have happened even without the recession, it just would have taken a bit longer. So unless you have really, really deep pockets and can afford to wait around until you see what happens and then some more really, really deep pockets so you can catch up with the smart people who didn’t sit around waiting, you’d better get out there and learn what you need to know now. If you aren’t willing to do it, then perhaps it is time to just pack it in. At least you may have something left for your twilight years.
1. http://gawker.com/5418975/nearly-90000-print-jobs-have-been-lost-in-the-last-year
2. Dr. Joe Webb, WhatTheyThink.com, http://members.whattheythink.com/articles/article.cfm?id=41410
3. VSS Forecast, 8/7/2007
4. http://googleblog.blogspot.com/2008/07/we-knew-web-was-big.html, 7/25/2008 10:12:00 AM
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written by Kerry Stackpole, January 06, 2010
Nothing, really. The resiliency and innovative traditions of the printing industry are alive and well. When the world of typesetting collapsed in the face of new technology, printers adapted. When scanning replaced manual stripping printers adapted. As computer-to-plate emerged, printers adapted. And as marketing and communication channels and methods change so will printers. As an example today's digital printing offers the right product, in the right quantity, with the right personalization to the right audience all at the right time. That said, technological innovations continue to streamline printing operations, alter traditional print buying patterns and require the development of new skills. The savviest printers will adapt as so many already have to meet the changing needs of their customer base. Yes, it's different. Yes, it's challenging. But there's nothing wrong with the industry that its tradition of innovation won't solve in the days and years ahead.
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written by Kate Dunn, January 07, 2010
True,it has been a very adaptable industry but one constant is gone. When desktop publishing and digital radically changed printing, the volume of print was growing. Print volume is shrinking as more and more communication moves digital and not just to digital print, to email, web, and mobile applications. People are raising money, generating awareness and selling products with nothing more than a good product and ardent fans on social media. They aren't using print to market they are using social communication.
There will always be print but less of it. Business models built on running impressions or clicks through an engine aren't going to have access to the same amount of volume. As technology has improved, there is less craftmanship so a page from one printer is very much like the one from the printer down the road. When everything looks the same, the buyer has but one thing to base their decision on, price. Driving the price down means more volume to make the same amount of money OR you have to figure out something else to sell. I see a lot of small printers who purchased software for purls, e-commerce, web to print, relevant fonts etc. but the only work they are doing is self promotional and not all that well in a lot of cases. To make money off of those things they are going to have to learn to sell them to other people. Unless they want those services to end up commoditized as well, it's not the ability to do it that will give them profit but the ability to do it well. Doing it well means adding value and you can either do that the hard way by learning every lesson on your own or you can go to industry conferences and training programs, learn what others are doing and figure out how to do it better than them.
This year I have seen very large offset printers die. I have seen very innovative digital services providers die because that part of their business was tied to an offset business that couldn't sustain a 30% reduction in volume. I have seen very small printers eliminate employees, reduce hours and stop paying themselves all hoping to weather the recession. I feel like I have to scream "The train is coming, get off the track." How much more can you cut out? What if the volume never comes back? They need to develop different business models to be profitable again and they need to learn to do that. Those of us who advise this industry are doing these companies a disservice if we don't shake them up and get them thinking. The world is different and your print business is going to have to change and change a lot as we move into the next decade of this millennium and I don't see them doing it fast enough.
There will always be print but less of it. Business models built on running impressions or clicks through an engine aren't going to have access to the same amount of volume. As technology has improved, there is less craftmanship so a page from one printer is very much like the one from the printer down the road. When everything looks the same, the buyer has but one thing to base their decision on, price. Driving the price down means more volume to make the same amount of money OR you have to figure out something else to sell. I see a lot of small printers who purchased software for purls, e-commerce, web to print, relevant fonts etc. but the only work they are doing is self promotional and not all that well in a lot of cases. To make money off of those things they are going to have to learn to sell them to other people. Unless they want those services to end up commoditized as well, it's not the ability to do it that will give them profit but the ability to do it well. Doing it well means adding value and you can either do that the hard way by learning every lesson on your own or you can go to industry conferences and training programs, learn what others are doing and figure out how to do it better than them.
This year I have seen very large offset printers die. I have seen very innovative digital services providers die because that part of their business was tied to an offset business that couldn't sustain a 30% reduction in volume. I have seen very small printers eliminate employees, reduce hours and stop paying themselves all hoping to weather the recession. I feel like I have to scream "The train is coming, get off the track." How much more can you cut out? What if the volume never comes back? They need to develop different business models to be profitable again and they need to learn to do that. Those of us who advise this industry are doing these companies a disservice if we don't shake them up and get them thinking. The world is different and your print business is going to have to change and change a lot as we move into the next decade of this millennium and I don't see them doing it fast enough.
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written by Kerry Stackpole, CAE, January 07, 2010
Kate, you are spot on! A deep sense of urgency is essential to success in the new world of printing and it goes well beyond our mainstays of price, quality and delivery to the more fundamental questions of what are our products, what are our services and how do printers become integral to a digitized world? Thanks for launching the conversation.
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written by Keith Bax, March 02, 2010
Hi Kate! I think the biggest problem with the industry is the way that owners have been taking huge sums of personal money out of their businesses for years, instead of making the necessary investments in technology and people that are required to be successful in today's marketplace. Now the cost of entry is too high, and the bad economy just exacerbates the fundamental problem.
Let's face it...30 or more years ago, you didn't need to be too bright or imaginative to make money in the printing business. People who bought printing turned their projects over to a printing company (i.e. a mysterious "black box") and, "viola" two or three weeks later, their printed pieces were delivered. Printers could pretty much charge what they wanted, and no one argued about it. Printers were fat and happy for a long time.
In today's market, printers have to be marketing services providers, or low cost providers (or in some instances, both). The same technology investments needed to be a MSP are probably the same investments required to automate production processes and thus reduce costs. The companies that didn't get on the technology train 5 or 10 or more years ago are going to be out of luck.
Let's get together for lunch again sometime!
Let's face it...30 or more years ago, you didn't need to be too bright or imaginative to make money in the printing business. People who bought printing turned their projects over to a printing company (i.e. a mysterious "black box") and, "viola" two or three weeks later, their printed pieces were delivered. Printers could pretty much charge what they wanted, and no one argued about it. Printers were fat and happy for a long time.
In today's market, printers have to be marketing services providers, or low cost providers (or in some instances, both). The same technology investments needed to be a MSP are probably the same investments required to automate production processes and thus reduce costs. The companies that didn't get on the technology train 5 or 10 or more years ago are going to be out of luck.
Let's get together for lunch again sometime!
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written by Kate Dunn, March 03, 2010
Keith,
I would agree that many printing companies made money in spite of themselves in years gone by. With little vision, inconsistent or non existent marketing strategies and extremely poor sales forces, they still made money. I'm sure that many owners did enjoy that era by rewarding themselves handsomely. However, those days are gone and they are gone forever. We are seeing this every day with the closures of once behemoth printing companies all over the country.
While they were making money in spite of themselves many did not invest in the personnel, process development or technology that could take them into the future and now they are scrambling. Many do not have good management in place - oh sure they can check boxes and breadth down the necks of workers to ensure they get their jobs done but they do not know how to create a culture where this happens without someone running roughshod. Too many things are dependent on the abilities of certain human capital and not processes and systems. As they downsize to cut cash flow these bottlenecks are even more apparent. And finally they have way too much iron and "things" and not enough intellect.
The good news is that out of this chaos will emerge a new breed that will be able to differentiate themselves with price because they are automated or intellect because they can provide solutions that create value for their clients. And that as Martha Steward says will be a "very good thing."
I would agree that many printing companies made money in spite of themselves in years gone by. With little vision, inconsistent or non existent marketing strategies and extremely poor sales forces, they still made money. I'm sure that many owners did enjoy that era by rewarding themselves handsomely. However, those days are gone and they are gone forever. We are seeing this every day with the closures of once behemoth printing companies all over the country.
While they were making money in spite of themselves many did not invest in the personnel, process development or technology that could take them into the future and now they are scrambling. Many do not have good management in place - oh sure they can check boxes and breadth down the necks of workers to ensure they get their jobs done but they do not know how to create a culture where this happens without someone running roughshod. Too many things are dependent on the abilities of certain human capital and not processes and systems. As they downsize to cut cash flow these bottlenecks are even more apparent. And finally they have way too much iron and "things" and not enough intellect.
The good news is that out of this chaos will emerge a new breed that will be able to differentiate themselves with price because they are automated or intellect because they can provide solutions that create value for their clients. And that as Martha Steward says will be a "very good thing."
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written by Kevin Trye, July 06, 2010
I well understand the article and relate to the feedback. I started in the industry 20+ years back working at the bleeding edge of technology, being those expensive drum scanners. As many have mentioned, a lot has happened since and I also think the industry has coped very well with change.
However the changes so far have mostly been about technology that would improve the print process and/or printed result. More digital. But now we are asking printers to move from a production focus and into marketing services. It's a huge ask.
Working out the tools and processes is relatively easy for us geeks. The change management, mindset and culture barriers are the major issue. It could take ten years. Will it be too late in then?
As Dr Joe Webb once said, the competition isn't other printers with better gear, it's other media channels. Printers, creatives and business owners all need to better understand how it all fits together. To use Dr Joe's words: "How print can make new media better..."
However the changes so far have mostly been about technology that would improve the print process and/or printed result. More digital. But now we are asking printers to move from a production focus and into marketing services. It's a huge ask.
Working out the tools and processes is relatively easy for us geeks. The change management, mindset and culture barriers are the major issue. It could take ten years. Will it be too late in then?
As Dr Joe Webb once said, the competition isn't other printers with better gear, it's other media channels. Printers, creatives and business owners all need to better understand how it all fits together. To use Dr Joe's words: "How print can make new media better..."
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