The IT view on printing – magazine feature

Deloitte’s comprehensive
report on the Australian paper
and printing industry has now
been published and widely
distributed through Printing
Industries. Sponsored by
Swanbank Paper, it’s an
accessible report that should be
required reading for anybody
involved with printing and
paper in this country.

What does the report tell us
about the effects of technology
on the industry?

Quite a lot.
Little of it is surprising, but
it confirms many of the key
trends that are moving the
industry forward. Importantly,
it also offers advice to the
printing industry on how it
can best adapt to the changes
shaping its future.

Early in the report there’s
a piece on consumer trends
in the use of paper, and in
particular the move away from
paper for many applications.
The report observes that since
2003 electronic payments
have outnumbered payments
by cheque in North America,
adversely affecting the large
US cheque printing industry.

Australia has historically not
relied on cheques as much
as North America, where it
is still a common sight to see
people writing cheques at
supermarket check-outs, but
the trend is apparent in this
country as well.
The report notes that the
display characteristics of
many screen-based devices
have prevented a wholesale
move away from paper,
“but as display technologies
improve, it is anticipated that
such technologies (e-books,
e-newspapers, etc.) will have
an impact.”

Technology barriers
falling

One very telling point is; “As
technology barriers continue
to fall, remaining barriers to
paper substitution are primarily
culture and business, not
technology related.” Although,
for many applications, paper
is simply better; “consumers
are becoming increasingly
comfortable with nontraditional
media forms.”

Again, this is starting to
happen in Australia, in a big
way. Witness Telstra’s move to
broaden its directory services
away from physical Yellow
Pages and towards online
activities—in the last year it
has acquired the Trading Post
and UBD street directories.

There has been a lot of talk
about movement of advertising
to the internet and away from
print, but the report predicts a
continued growth in the use of
print advertising in Australia.

“Any shift towards increased
usage of internet cataloguing
will be accompanied by
increase of supplementary
paper catalogues. Few
industry players expect
signifi cant substitution in the
advertising catalogue market
in the short to medium term,
with most expecting
signifi cant growth in spend.”

This trend of internetprint
cooperation is apparent
in a number of areas. The
most successful newspaper
publishers are embracing the
internet, but as a supplement
to their print editions. Much
advertising, particularly
classifi eds, is moving to the
internet, but smart publishers
realise that the internet is an
opportunity to add value to
print, rather than to replace it.

It’s a cultural thing

In another section the
report devotes a few
pages to the threat posed
to the printing industry
generally by the internet
and related technologies.
It makes the interesting,
and extremely valid, point
that the biggest change the
internet is bringing to the
printing industry is not in
the replacement of print as a
medium, but in the changes
online technology is bringing
to business models in the
printing industry.

An example is the ‘reverse
auction’ where contracts are
won through a live online
bidding process, with the
lowest price winning the
work. Reverse auctions are
becoming common in many
industries, and although
they have not made their
appearance in the Australian
printing industry, they exist in
the USA.

“The product of such
processes is the reduction
of many printing services
to a commodity product
in which price is the sole
consideration,” observes the
report. It goes on to state
that the best way to combat
price-driven business models
is to ensure that price is just
one element of what printers
offer their customers—such
factors as quality, reliability
and speed of turnaround need
to be emphasised more.

Pros and cons

Of course, it is often
technology that helps printers
deliver these things. The
Deloittes report touches on
many other issues, such as
the rise of China, (where
it all began) as a printing
supplier and consumer, and
the increased emphasis of
environmental issues. But if
the report has a theme it is
that new technologies provide
as many advantages as
disadvantages.

For every printer or printing
process that is affected by
new technology, there are
new opportunities enabled by
better or smarter or cheaper
ways of doing things.

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Graeme Philipson is an IT
analyst, presenter and writer.
He is a columnist in The
Sydney Morning Herald and
The Age, and is managing
director of market research
company Connection
Research Services.

graeme@philipson.info