On-Demand 2002 Re-CAP
With massive media hype, endless lists of seminars, extensive exhibition coverage and articles in trade publications, etc. digital printing has to be on nearly every printer’s evaluation list. Is now the time? Is it the technology to lead printers out of a "commodity" image? Can the traditional sheetfed offset printer survive without adding digital production? What follows is a summary article, on key presentations and technology announcements at On-Demand 2002.

Charles A. Pesko’s (Managing Director, CAP Ventures, Inc.) opening keynote address set the stage for the 100’s of individual presentations over four days, as well the tone of the exhibition. "Paper is no longer the medium of choice. The speed of business is accelerating, and print can be too slow, too heavy, and too expensive. Today, almost all documents are first created electronically, viewed on a monitor, and then—maybe—printed."

Digital technology and electronic distribution erase time and distance. So don’t fight it—don’t look upon the Web as the enemy—embrace it as it drives new opportunities for print.

So, how do you play in this changing world?
You must add new digital services, enabled by new technology. You must be proficient in digital media as well as paper. You must use hardware and software solutions to make printing and publishing processes more efficient. You must leverage your expertise in formatting and delivering content on paper to deliver that content via any media.

You must offer services that allow you to participate in more stages of the document lifecycle. For example, document management services and Web-based tools facilitate collaboration during the creation phases, and streamline order management. Providing fulfillment and distribution services offloads those tasks from your customers and allows you to leverage economies of scale. And print-on-demand eliminates inventory, document waste and obsolescence.

Color print-on-demand has moved out of the early introductory phase and launched into its growth phase. Finally, the industry is witnessing the critical price-performance required to take digital color printing to the next level. These, along with increasing quality and ease of use, are all coming together to propel digital production color into the mainstream.

Preliminary numbers show that the retail value of print on-demand will grow from $26 billion 2001 to $55 billion by 2006, at a compound annual growth rate of 16%. Digital printing will be a key driver in print industry growth. The print-on-demand color market generated $17 billion in retail value of printing in 2001. This will grow to $32 billion in 2006, at a compound annual growth rate of 14%.

In order to reinvent the printing and publishing industry, and re-launch a growth phase, we must refocus from a press-centric to a content-centric industry. The printing and publishing industry need to present itself as the content publishing services industry. What this means is focusing on offering your customers the services to manage, store, aggregate and deliver content, maybe via print, maybe electronically.

The message is clear. Redefine your business.

• Continue to invest in digital print technology. There is no question that this must be a key element of your future strategy.
• Integrate solutions that streamline processes, drive down costs and provide higher levels of service to your clients and partners.
• Expand your business to include electronic document services in addition to paper-based print services.
• Redefine your business to include content publishing services."

In the black and white print-on-demand marketplace, specific strong trends include:

• Added value provided by advances in front-end system technologies including job submission, job ticketing, workflow management, job archiving and reprinting, etc.
• Increased impact of mid-range (40-79 ppm) equipment, and universal front-ends.
• Growth in high-speed systems from suppliers such as IBM, OCE, and Xerox. In addition, growth is present in slower-speed machines designed for establishments with low requirements.

Color copiers and printers for print-on-demand applications today feature:

• Process color digital devices that copy or print with four-color electrophotographic toners.
• Speeds range from 30 to 50 pages per minute (where a page is 8 _ x 11" cut sheet). Many products are now dropping into a traditional gap between 9 and 24 pages minute, while the low-end is moving up.
• Most products support both a digital copying mode (from hard copy originals via an integrated digital scanner) and a direct digital mode when used with a connected (or embedded) control or Raster Image Processor (RIP).

Most news today concentrates on high-speed digital color printers. This class of device prints color output at 25 or more variable-imaged 8 _ x 11" pages per minute, using four (or more) color process. All current products in this class support up to 12 x 18" paper size, enabling printing of a full-bleed 11 x 17" image, and offering standard or optional duplex.

Another important trend witnessed is Workflow Automation and Standards. Key efforts for print on-demand standards include:

• PPML/VDX – VDX, a variable data standard that builds on a subset of PPML (the personalized page mark-up language).
• CIP4 – Umbrella group involved in standards efforts, including JDF.
• UP3I – Feeding and finishing standard.
• XML – Many standards in the print-on-demand market are taking advantage of XML (the extensible mark-up language).
• JDF (job definition format)
• PrintTalk (uses the JDF Standard)

On-demand printing has to lead to a logical requirement for on-demand finishing. Otherwise, what’s the use? Specific trends in feeding and finishing include:

• Automated set-up for standalone devices.
• Attractive low-end devices for low-volume environments.
• High-end, in-line finishers for entry-level products.
• In-line perfect binding for cut-sheet or roll-fed systems.
• In-line finishing for dedicated applications like books and direct mail.
• New standard efforts including Universal Printer Pre- and Post-processing Interface (UP3I) standard; including its debut at Xplor 2000 and vendor support by Duplo, Hunkeler, OCE, Stralfors, and others.

One of the prime opportunity for printers in evaluating digital toner printers such as the NexPress 2100 , iGen3, Indigo or Xeikon is their ability to print each individual page, differently. While evaluating this, printers must realize the immense challenge facing them. These include:

• Lack of printer and customer knowledge of personalized printing business potential and requirements.
• Database limitations and the knowledge of their application in 1-to-1 communications.
• Relatively high cost and lack of experience in database preparation and variable data printing.
• Printer’s inability to sell, market, manage and price variable data print applications.

It is important to note that a recent study by TrendWatch indicated that only 29% of digital printers see variable data as an opportunity, while only 3% of creative professionals view digital printing as a top sales opportunity. So where is the opportunity?

Specific questions a printer should ask himself or herself include:

• Is there an adequate volume within current customer base to drive 700,000 impressions a month?
• How much market development is needed to generate that volume?
• Are the right sales and marketing skills available within the current organization to develop the market?
• Is the right infrastructure to handle variable data applications in place?
• Can current order processing systems handle the multiple short-run jobs required each day, at a reasonable cost?

Variable data trends in print include:

• Document creation and composition standards based on XML and object-oriented document structures.
• Support for standards, particularly Personalized Print Markup Language (PPML) and PPML/VDX.
• Support for other methods including Creo VPS, Indigo SNAP, and Xerox VIPP2001.
• Convergence of traditional data center applications providing support for graphic arts output, specifically PostScript and PDF.
• Continued increase in variable print volumes.

Digital printing trends include:

• Migration from copier/printer to printer-only models in color now, as it happened to B&W in the past.
• Investments in areas including chemical toners.
• Activity on the high end in color.
• Increased availability of low-cost productive color copier/printers and printers in the 15-25 ppm range.
• Continued decline in color costs, directly impacting higher print volumes.
• Very capable and low-priced cut-sheet black & white products from about 60 to 110 ppm.
• Integrated in-line finishing across all print products.

What’s Next?
From Print-Centric to Content-Centric: The recommendation is for printers to become content managers. This should be about as easy for the average printer to do as buying your way into heaven. When desktop arrived, it took years (and is still taking printers some time) to develop systems and procedures to successfully deal with client files. Dealing with missing fonts is still a problem for some printers. Working with clients’ Web needs has been almost an impossible task for most printers. They simply don’t want to touch this. Incredibly, there is a large number of printers who do not have Web or e-mail connectability throughout their organization. These are the printers that are going to deal with content management?

With all good wishes, managing a client’s content is an amiable goal, but will be extremely expensive and difficult to achieve. It is an executive level sale far beyond most printers’ sales capabilities. It also places responsibility on the printer that most do not want to accept. It will require another new executive in the print organization – the CM (Content Manager) executive or the IT officer, at a time when printers simply have to reduce their costs.

Content Center is a marvelous idea for avoiding "commodity" printer image, but nearly impossible to achieve. In addition, a majority of print sales representatives are simply not "solutions" providers. They sell vs. listen. Variable and personalization printing will require these same print sales representatives to listen to client needs, relate these to possible digital solutions, have the guts to suggest an appropriate solution, and then implement the digital alternative. Each of these processes is fraught with danger, with sales representatives with less than perfect expertise.

Data is One of the Stumbling Blocks: Even if the sales person has enough expertise to sell the database management part of variable (personalized) digital print project(which most do not), the next question is—can the printer or distributor handle this internally, which is preferred? If not, can an outside third party provider be used and trusted?

The desktop era certainly well illustrated that printers are not anxious to create partnerships (in this case with service bureaus). Most often, when bad files arrived, it was mild warfare between the printer and the service bureau and the distributor, as to cost to repair and who takes the blame. What will happen with bad database files? Whose fault will it be and who will blame whom?

Planning This Transition: Most print providers simply do not plan for the future. Less than 5% of all printers have even a rudimentary strategic plan. Without a well-formulated strategic plan (business/marketing/sales) the risk of failure in the digital/content world will be significantly heightened, especially with the immense amount of change that will have to be planned, and executed.

One approach for a printers and distributors seeking to offer Content Management is, of course, to partner with companies already in this business. This takes extensive investigation, trust, and patience. It also requires a change in how print sales people sell. A second, more preferred way of developing a Content Management orientation, is to build it from within. This is difficult, expensive, time consuming and fraught with risk.

Squeezing Costs Out of the Business: One thing for sure, all this further emphasizes the need for print suppliers to squeeze costs out of every operation. Even with a growing economy, traditional print price competition will continue to flourish and exist. There’s simply not enough business to support all the iron in our factories today. Printers don’t control the price, but they do control their costs. Cost reduction must be a key target for all print suppliers.

Terry A. Nagi is president of Terry A. Nagi & Associates. He now concentrates his energies on assisting print providers in positioning their organization in the digital print world. He can be contacted at 202/342-1727(voice), or by email at tanagi@aol.com.

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