Beyond the digital horizon - sunrise or sunset? magazine feature article

There is an HP poster in the departure lounge of Wellington airport. It invites readers to help HP celebrate the shipment of the 100 millionth LaserJet printer. That is an awfully big number and if we assume the HP market share to be around 25%, it suggests there are around 400 million laser printers out there churning out printed matter on a daily basis. I mention this because it seems, finally, we in the printing industry are becoming aware that digitisation of our craft-based, analogue industry, cannot be resisted. It will happen whether printers do it or not.



Let us recall that desktop publishing completely eliminated the typesetting industry in about five years. Postscript color transformed the repro business in about three. Following Mr. Toffler’s theory about the rate of change increasing, the demise of offset printing as a viable stand-alone business may well be upon us.



The end of an era



Offset printing a sunset industry? Surely not. After all it was printing in the larger sense that transformed society over the last few hundred years or so. The book, the library etc, the first form of extrasomatic intelligence readily available to all. Well, there is another form of stored knowledge in everyone’s home now. It’s the computer and its major form of knowledge distribution, the internet. We, the printing industry, are rapidly becoming the output service of this new, digital, craft-free, society changer.



We are not alone. The entertainment industry is in the throes of similar changes where previously successful business models are no longer profitable. The video tape and DVD that prolonged the profits of movie makers will last until internet distribution speeds make them history. Digital technologies are modifying society in a manner that cannot be resisted.



In this changing society printed material is, well, just needed less.



That is why many print companies with the foresight to invest in digital print technology have been quite disappointed. It’s not the technology that needs to change, it’s the business model. As an output service, which is what digital printers fundamentally are, not only is the slice much smaller but so is the pie itself. Digital printers must get super efficient. The offset parameters for things like makeready and over prints are not affordable when the run length is, say, 50. Those 20 sheets you discard may well be a big chunk of the overall job.



If we consider the USA printing industry to be similar, at least in function, to our New Zealand industry then the trends are worrying. Published data shows, for the first time ever, growth in print at less than growth in GDP. The number of USA commercial printers declined by 9% between 1997 and 2002 with a similar decline in revenue for those remaining. This was partly offset (hmm!) by an increase in both revenues and numbers of establishments called digital printers.



The New Zealand industry is a fast adopter of change and the USA experience is already upon us. A stroll through my local country town finds five digital printers and no offset printers. I can have my business cards, menus, brochures, posters, magazines and books all produced without any contact at all with ‘The Printing Industry’. Which leads me to another interesting conjecture.



Personalisation or personal print?


Ask an iPod owner what it is they like about the product. After all the usual answers on price, relevance and trendiness you will eventually get something like “I can choose my tracks” or “I only pay for what I want to listen to”. In fact studies show that the power to personalise one’s music collection is a major purchasing consideration and the second most important reason to buy, behind price.



Personalisation of printed materials has been with us for ten years or more. Many digital equipment vendors present this as a value-added product for those who invest in the right product; ROI models are based on this additional revenue opportunity. It is suggested that the amazing success of the iPod is an indicator of the demand just waiting to be tapped into. I take issue with this view.



As a consumer I have never experienced personalisation. My fly rod catalogue does not come with me on the cover landing a 10kg monster and Holden has never sent me a brochure with yours truly in the front seat of the latest Monaro. This must be because my spending habits are insufficient to attract the attention of the personal marketers.



But I have experienced personal print. Example one, my fishing buddy owns a restaurant and used to get a couple of thousand menus printed four times a year. He never used two thousand but that was the economic point for offset printing this particular job in one colour. Nowadays he changes his menu monthly. He originates the job himself on his PC and prints what he requires, in colour, on one of those 100 million LaserJets we started with. Further example, for my forthcoming nuptials the invitations were lovingly produced by my fiancé and printed in colour on my $100 laser printer purchased from Dick Smith electronics.



“Aha” you might say “but what about the quality?” Well, in both of those examples the quality of the end product is as good as required. Also, before anyone points out that an offset press is sixty zillion times faster than Dick Smiths’ printer, consider this. The major difference between the US and the NZ printing industries is run length and the NZ average is 6,000 and that includes newspapers and packaging. That $100 printer prints at 18 ppm and I can buy well over five thousand of them for the cost of an equivalent offset system or, for that matter, an iGen. I also wonder how long it will be before the printer is free if you sign some kind of usage agreement. Printers are very familiar with purchasing plant that way; it is also how most cellphones are purchased.



My point is that personalisation in the internet sense does not mean a new source of revenue; it represents a further threat to the printing industry. Translating the second most important reason for purchasing an iPod into the print equivalent comes out as “I only print what I want to read in the bath and I do it myself” or similar.



Many of the traditional reasons for the existence of a printing industry are disappearing. The capital cost barrier is gone, the craft skills have been digitised and we are no longer the manufacturers of the major form of knowledge storage and distribution. Consider a future where high quality, fast printing devices are as ubiquitous as cellphones or calculators and their daily usage as common as emails or phone calls. It’s not far off.



Whither newspapers?


A former colleague of mine is fond of saying things like “Our children will not read newspapers” or “I’ve never seen a seventeen year old read the Herald”. Naturally I discouraged this when trying to sell products to these organizations but the statements are fundamentally true. When I tell people my first contact with the printing industry was as a press photographer with the Auckland Star the usual response is “The Auckland what?” Well, yes Virginia, there really were two daily newspapers in nearly every city in New Zealand not so long ago.



Newspaper publishers will continue to publish but the use of the words news and paper may need a revision sometime soon. I confidently expect my news to be delivered electronically, very probably (finally) personalised. If I then wish to browse the paper in the wee small room I will exercise my personal print options and take it with me. It was not for advertising only that the forward looking people at Fairfax made several New Zealanders rich. Soon they will be charging me for electronic delivery of something which currently is free. I will likely be happy to pay, as I do now for my paper with my news already on it. This will also eliminate the problem of headline black all over the wall when you swat flies with the thing!



The future of news is assured, but offset printed? Already we see in the technology future the first iterations of the inkjet web press. This will lower the entry barrier to what are currently web-based only news organisations entering the print territory. To compete with these devices with an offset printing press will not be possible. They are digital devices making a print run of one feasible. Something rather expensive to achieve on an HT70.



Thank goodness for packaging


Packaging is one area of non-digital print still showing significant growth, in some segments over 25% per annum. Or to put it another way, if Graeme Hart is investing there must still be money in it.



The packaging industry has similar issues to deal with in terms of technology but is less threatened because of the very specific nature of the product they produce. Print is no longer the knowledge reservoir and communicator it once was but if you have to put something in a cardboard box you might as well put your name on the outside.



But remember that societal change I mentioned. I wonder how many more generations will permit the felling of trees to wrap up the fishcakes and the ice cream. Such terms as pre-taxed waste and food miles are becoming part of the vernacular. The ever increasing ‘green’ influence may be expected to act as logically towards packaging as they do towards mining. I am a greenie. A hunter of large trout in pristine waters, a shooter of stags on snow capped peaks. I note that the first thing the conservation dept does with new public estates is fence it off from me, the public. I can only guess at what they will do to those filthy producers of plastic or cardboard over the coming years. After all, most of it is covered with petroleum products, like ink.



Now, back to that poster in Wellington airport. I wonder was it printed offset?