Thursday, November 30, 2006
Reader is Skeptical of Printers Getting into New Media, and with Good Reason
Ray Roth of High Volume Printing magazine sent this note:
“...I can't envision very many commercial printing companies making a profitable leap into video and e-book production. The answers to success and increased profitability for a majority of midsize and large printing companies is much closer than a video editing room. In fact, for the last several years, GRAPH EXPO and PRINT visitors have had an opportunity to see first-hand demonstrations of practices and processes that not only are closely related to what they currently do but also command significantly higher margins than a typical print job. Although PIA/GATF, NAPL and GASC blow their horns about large-format printing and mailing and fulfillment, too many printing companies turn a blind eye to these opportunities. Besides the nice impact these services can provide to a company's bottom line, most printing companies already have customers that [are] buying these services from another source. Until I learn otherwise, printing companies are better off fulfilling more of their customers' needs with additional services more closely aligned to what they presently do.”
Ray is absolutely correct from a printing business perspective. The print business must continually innovate in its core business. Printers are not in control of market prices, but they are in control of their costs, hence the need to emphasize productivity and new ways of approaching the marketplace that changes costs and creates new benefits for clients. In the longer run, however, the print business owner has to deal with the realities of marketplace demand. There is a time when the core business proposition no longer provides what clients desire, and those businesses die and are replaced by others that do.
This is what separates owners from entrepreneurs. Let's assume that the advice given to printing businesses to define themselves as being in the communications business is fully correct and in the spirit of Ted Levitt's classic Marketing Myopia. (It's not, but let's assume that it is). There, Levitt implores business leaders to define their businesses broadly. The famous example is that railroads were not in the railroad business, that they should have defined themselves as being in the transportation business. If one believes that redefining a business requires allocating resources to back that up, then one must insist that these businesses invest in the technologies and capabilities of the innovations that will put them out of business.
The skills and business knowledge of a print business owner are directly tied to what they know best. This is, like all specialized knowledge, a blessing and a curse. The blessing is that the knowledge and experience is what uniquely suits them to run a business well at a certain time and place. The curse is that those skills and competencies exist in a changing environment. Railroads would not have been competent at running airlines, even though a reading of Levitt suggests that railroads should have seen the airline opportunity. Investor Warren Buffet has cited that even airlines can't run airlines, with his famous quip that “any right-minded capitalist who had seen the Wrights' contraption take to the skies in Kitty Hawk might have shot it down and saved investors 100 years of agony.”
All executives have a core technical competency that makes them excel at what they do; and all of them find the need to change and hire people or buy companies with different competencies because of marketplace change. But there is never a guarantee of success in this endeavor. So the skepticism that printers can handle a leap to video is well-founded. In fact, straying into odd businesses can lead to the risk of starving the healthier core business of needed capital investment, and that should not be taken lightly.
So the thrust of the close of the piece was not to encourage abandoning print and making a rush to video embedded in e-books or whatever the future holds. Instead, it was intended to inspire a look at the technologies and dynamics of the communications business as it unfolds. There are many new media products that require a mastery of graphic implementation for which print experience is an excellent foundation. The print business that can offer a communicator the ability to deploy content in various channels will still often be, in its heart, a print business. Over time, those new abilities would open new markets and new customer bases that could be built on top of that foundation, ensuring its long-term survival.
“More Print Than Not”