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As appearing in The Seybold Report - Nov. 02, 2006

Article prepared by C. Clint Bolte, C. Clint Bolte & Associates, Chambersburg, Pennsylvania. For additional information please call 717-263-5768, fax 717-263-8945, or e-mail to clint@clintbolte.com.

Executive Outlook Conference 2006;
Connecting Technology for Profit

Over 170 attendees including 85 printers gathered at McCormick Place for the traditional day-before-Graph Expo briefing on industry technology, trends, and Must See 'ems products to highlight the largest print equipment trade show in North America. Hosted by NPES, organized and moderated by Bill Lamparter, Principal of the PrintCom Consultancy, this ninth annual fete drew a contingent of foreign guests from a dozen different countries and six continents.

The Conference's main sessions focused on the economy's impact on print resulting in diversification initiatives, CTP's next generation, a series of vignettes providing the latest information on the newest technologies and product applications, case studies on web-integrated publishing and print services, and review of the next series of disruptive technologies. Afternoon breakout sessions followed up with a series of practical "How to" plan for, organize, and implement the chosen technology.

Kip Smythe, NPES' Vice President and Director of Member Services, offered a keynote presentation on how print fits in the changing economic landscape. Printing industry overall economic growth through the first three quarters of 2006 and projected for the last quarter has been lack luster at about 3.3%. Though advertising budgets indicate spend rates considerably higher, the difference is moneys going into alternative graphic communications media.

Leading printers have reacted to this shifting of marketing spend to diversify into complementary services in an effort to get a larger share of their clients' marketing communications budgets. While these different value-added services have been reported for a number of years, Mr. Smythe shared the results from an exhaustive Printing Industries Market Information and Research Organization (PRIMIR) study entitled "Recovering from Adversity through Diversity" which was just released ( primir.org). Its purpose is to help its NPES members to anticipate and prepare for future needs of its printing industry clients.

Concentrating on ten ancillary services from digital photo to web mastering to mailing services, the study pegs the value of these services being provided in 2005 by nearly a dozen different print market niche segments to be 8% of the total. This proportion ranges from 4% for the newspaper and book printers to a high of 24% for commercial printers with 100-249 employees. Based upon extensive surveys, the study projects these services to grow by 13% a year until they represent 13% of total printer's revenues by 2010. The study summarized capital investments for each service to range from $56 to $162 thousand with payback periods of less than four years or about 30% return on investment.

Comments from audience attendees suggested that this level of penetration was conservatively forecast as the study was based on only printers having greater than 20 employees and did not include results from other industries closely aligned with the printing industry. For example, the NAPL 2006 Survey of Fulfillment Practices showed that sales volumes of mailing and fulfillment specialists reviled that of the printing industry for those participating in their study. Similarly the larger print distributors, who buy printing services, offer some of the more sophisticated information fulfillment services. UPS, Fedex, Kinkos, Staples and OfficeMax were not included in these numbers either.

The conclusions drawn were (1) the value-added services market is large, (2) growing by double digit rates, (3) requires modest capital investment relative to conventional print production, and (4) the knowledge investment is significant.

Andrew Tribute, Managing Partner of @tributes Associates consultancy, gave a presentation on the current dynamics in the computer to plate technology and market. While the majority of all printing plates are CTP, a full 50% of the printers have not converted yet from film. And those are the small lithographers which are expected to buy two and four-up CTP units. AGFA is the worldwide plate market leader with Fuji climbing quickly. The next generation of CTP exposing process less plates by violet laser imaging shows strong economics.

Tribute does not expect these laser-imaged plates to ever be sold as inexpensively as conventional plates for the following reasons: (1) higher grade aluminum needed for automatic handling in platesetters, (2) coatings are more complex, (3) higher grade of slip sheets used, (4) high cost of testing and (5) temperature controlled shipping and storage are required. The really high volume plate users, such as newspapers and book printers, are expected to continue to adopt the computer to conventional plate processors for this incremental cost reason.

In responding to audience queries about DRUPA 2008 expected product announcements Tribute and Lamparter offered these prognostications; (1) ink jet will excite and delight on its way to dominating the digital print markets by 2012, (2) introduction of multi-functional devices that output color (HP will may replace the Indigo with such) and (3) all digital printers will continue to increase speed.

Don Piontek, Principal of Finishing Resources consultancy, discussed the post press advances resulting in ever faster make-readies to accommodate shorter and shorter run lengths. Both Muller Martini and Horizon announced on their respective perfect binders quick swap adhesive modules for either EVA hot-melt or PUR. Goss showed a Ferag rotary trimmer connected to their Pacesetter saddle stitcher via a gripper conveyor. This allows greater flexibility in system layout out resulting in floor space savings. A fully automated cutting system was shown by Polar P.A.C.E., which incorporates stacklift, jogger and transomat placed around the cutter. Paper lifts are moved, jogged, moved and turned through the cutter. The gripper moves the work to the rear-loading blade while the operator prepares the next lift.

He described two interesting new pieces of mailing machines; KAS Compact is a multi-format envelop inserter with only a five-minute size changeover with speeds of 5,000 envelopes and hour and the EasyMailer, which converts a digitally printed page into an envelope at speeds up to 1,500/hour. The EasyMailer investment of $195,000 can be paid for on a click charge basis.

"Even You Can Publish a Book In 30 minutes or Less" was the unspoken theme of Rochester Institute of Technology Professor Frank Cost presentation highlighting the ease and effectiveness of the many web-to-print portals available. Digital printing with its print on demand attributes of zero inventory carrying costs is becoming the salvation of University Presses, who simply can no longer afford to carry the inventories of its unsold books. A summary publishing financial model of conventionally printing to meet a preconceived demand level versus digital print-to-order is shown below.

Professor Cost offered a number of websites that facilitate the design, publishing and printing of books, catalogs, direct mail pieces to name just a few products; lulu.com, qoop.com, touchpoint.com, cardstore.com and blurb.com.

When linked with the web-to-print templated softwares for standardized books, digital printing is becoming the practical venue for vanity publishing as Professor Cost humorously illustrated. One morning he took a series of digital camera photos of every conceivable angle of his teenage daughter's constantly and thoroughly trashed bedroom in their home. In less than an hour he downloaded the photos to his personal account and chosen standardized book format on lulu.com. His initial run length of one, but potential distribution throughout the corridors of her high school, generated the reader angst that all would-be Boris Korloff authors could only dream of. The message was well illustrated; web-to-print software is facilitating large and small projects for quite small companies at a surprisingly affordable incremental cost.

Executive Outlook may provide its attendees with a preview of the more exciting product offerings to be available at this year's largest North American print equipment trade show. Or after a fast-paced eight hours of technology overload there could be heartburn and stress, particularly if the attendee is new to the industry or simply behind the times. Whether the glass is half full or half empty, this session has become a great way to begin Graph Expo and Converting Expo for veterans and new professionals alike.

Article prepared by C. Clint Bolte, C. Clint Bolte & Associates, Chambersburg, Pennsylvania. For additional information please call 717-263-5768, fax 717-263-8945, or e-mail to clint@clintbolte.com.