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Jan 1, 1995 12:00 AM
Sales are soaring as the industry changes, but what does it take to be a winner?
Every service bureau, color separator or commercial printer can point with assurance to the many changes "desktop publishing" has wrought. Low-cost, easy-to-operate electronic technologies have democratized the way pages are produced. No longer is it the quiet craftspeople in the trade shops that have the keys to the mysteries of color production. Today, everyone can produce, or thinks they can produce, complete color pages.
The impact of these "desk-top" technologies has been far reaching, changing the way graphic arts firms of all kinds do business with their clients - even changing the clients themselves.
Although technology is most frequently cited as the principal element influencing change, there are several other factors that are having a strong effect on prepress markets.
Recognizing that reality, two associations, operating separately, recently commissioned studies to determine changing prepress dynamics and their impact on graphic arts services. In this special report, AMERICAN PRINTER presents the "best and the brightest" of these two studies. The goal, of course, is to help graphic arts firms better understand the changing marketplace and provide practical assistance in adapting to these changes.
The two studies cited in this special report come from the Graphic Arts Marketing Information Service (GAMIS), a special section of Printing Industries of America (Alexandria, VA), and the International Prepress Assn. (IPA), headquartered in Edina, MN.
The GAMIS study, titled "The Impact of Electronic Publishing on Traditional Pre-press and Printing Services," attempted to analyze functions that have migrated in-house and how that migration affects the use of prepress trade shops, service bureaus and printers. Conducted by BIS Strategic Decisions, the study looked at the current and future use of so-called desktop publishing equipment in corporate design groups, ad agencies and professional publishers.
All the segments looked at are responsible for the creation of electronic mechanicals; prepress service providers and printers are responsible for producing the initial proof and subsequent finished piece.
In recent years, many industry gurus have predicted the demise of prepress services because of the rapid adoption of desktop publishing equipment by in-house groups. But the GAMIS study clearly indicates this to be untrue.
The vast majority of the participants in the GAMIS study say that their duties have already increased tenfold. "Stop," they say. "We don't want any more responsibilities."
Strategically, these agency, design and publisher groups believe strong relationships between themselves (the creators) and producers (prepress service providers and printers) need to be developed and nurtured. Furthermore, it is through these relationships that many agencies and designers see their firms as becoming more profitable.
Participants in the GAMIS study clearly maintain that they do not compete with prepress/printers but are cooperative allies in providing clients with attractive, price-sensitive print media.
Overall, the study suggests that in-house groups are contributing to the prepress service providers' workload. As more work is brought into the mainstream of print material, more work will be available for printers and trade shops.
However, savvy graphic arts execs would be well-advised to look into the findings of another study for more details.
"Print buyers today know less about print production than their predecessors," warns Lou Laurent of Laurent Associates, who conducted the IPA study titled "Prepress - Its Changing Role." These buyers often have unrealistic confidence in desktop publishing and software solutions, continues the consultant.
The IPA study also reveals that most print buyers want to continue to use their current prepress vendors. However, only IF those vendors can meet their changing requirements for faster turnaround times, quality, flexibility and pricing. No easy task in today's competitive environment.
The good news in this scenario is that the volume of color material being created is increasing. According to the GAMIS study, more than 50 percent of material being designed by all segments is produced in full color. Not surprisingly, 62 percent of advertising/design work and 51 percent of corporate design work is full color.
Leading applications for print production include brochures, catalogs, books and magazines.
The bad news (and there always is bad news) is that although the total number of color pages continues to grow, most of the new growth is in so-called low-end color.
Among the corporate IPA survey respondents, 100 percent indicated that they are fully capable of performing image retouching and color manipulation functions. Although most printers and trade shops would seriously object to that response, designers obviously believe what they say.
Keep in mind that these corporate designers are not producing their company's annual report or other high-end color publications. They are adopting a lower quality standard for much of their color work.
The IPA study points out that much of this work was black-and-white until recently, and corporate departments are very satisfied with the results they are achieving on desktop color systems compared to their black-and-white benchmarks.
Settling for lower quality color, reminds the IPA study, is also being driven by tighter budgets. These cost-control issues may keep corporate clients' taste for higher quality color at a depressed level for the next few years.
With the continuing growth of color pages, it is safe to say that image scanning and manipulation is alive and well in all in-house segments. This is especially true for advertising/design and corporate users, with a vast majority reporting scanner installation, according to the GAMIS study.
At present, the scanned images - especially color images - are low resolution and used for position only (FPO). Very little color correction or sharpening currently is being done. In the GAMIS study, over 80 percent of the respondents believe that their time "is too valuable" to spend on this specialized work.
During GAMIS/BIS focus group meetings, many of the participants indicated they would not purchase a scanner above 600 dpi. Those who already owned 1,200-dpi devices believed that the higher resolution capability was not absolutely necessary.
The IPA study tended to agree with the GAMIS conclusions. Corporate and creative/design respondents both indicated their strong involvement in low-resolution scanning for positioning images in page layouts. "The fact that they also are performing at least some of the layout functions makes many respondents believe they are performing a significant portion of prepress production," relates Laurent. Customer perception, therefore, suggests that low-resolution scanning and page layout functions are no longer unique color trade services.
Although the IPA study indicates that high-resolution scanning will not become as commonplace as low-resolution scanning, it does identify a definite trend toward expansion in this direction.
"There are two elements driving this trend," relates Laurent. "First, as the equipment market becomes saturated, vendors are being forced to promote their products directly to prepress service buyers. Although this trend may be reversed by the end of the decade, in the meantime, more and more prepress buyers are being convinced that cost and turnaround advantages can be derived from expanding the scope of their in-house pre-press operations.
"Second, the definition of high-resolution is a relative issue that varies among survey respondents. Designers, for example, often define high resolution as 600 dpi. Corporate departments that are making the transition from black-and-white may consider 300 dpi to be high resolution."
Designers, claim both studies, are doing more low-res scanning and perceive themselves to be doing full resolution scanning. This fact also can be correlated to proofing.
In the GAMIS study, 100 percent of both the ad/design and corporate design groups believe that professional proofing (contract proofs) is the responsibility of prepress houses or printers. In general, these respondents do not believe they possess the technical competence nor the technological resources to accomplish this type of proofing activity.
However, among these groups there is an extremely high level of digital color proofing being done for FPO applications. According to the IPA study, continued advances in both ink-jet and thermal dye-sublimation technologies are driving the widespread in-house use of these devices.
"There are advantages and disadvantages of the in-house digital color proofing trend," cautions Laurent. "The widespread use of digital proofs sets the stage for 'direct-to' technologies. Conversely, as print buyers become more familiar with desktop digital color proofing, they are more frequently approving color from these proofs."
Increasingly, reveals the IPA study, color is being ap-proved at the design stage, long before the job enters pre-press production. This presents a difficult challenge for printers and trade shops that have to convert design concepts into finished products. It is no surprise, then, that graphic arts firms find it next to impossible to meet customers' demands when inexperienced print buyers assure that the designer-supplied color proof represents how the job will appear in print.
Regardless of these problems, there is no doubt that designers and print buyers still see a need for professional pre-press services. "It matters very little who performs prepress service activities - printers, color trade shops or service bureaus," says Frank Trocki with BIS Strategic Decisions. "What matters is that the designers do not have to invest in additional technology, develop new skills or hire staff to accomplish high-res scanning and sophisticated image manipulation, color proofing, imagesetting/platesetting and imposition."
The creators of electronic mechanicals all appear to believe they are contributing their fair share to the total process, notes the GAMIS study. All indicated they do not have enough time now and that to do more would jeopardize their relationships with their customers. This is one of the major reasons that designers believe certain activities are better accomplished by commercial printers or pre-press service providers.
"Relationships need to be built between the service providers and their customers," advises the GAMIS study. "If clients' needs are fulfilled, then client satisfaction will be the outcome."
One way to help build these relationships is identified in the IPA study. As in-house designers do more and more work, the need for effective and efficient image archiving grows in importance. While the argument can be made that the cost of digital storage is continuing to decline, storage demands are increasing at an even faster rate.
As file sizes continue to increase, more digital storage is needed to support these jobs. When these files are altered, several image revisions may require storage.
In this scenario, Laurent reminds us, the issues of file and job tracking, retrieval and the flexibility of the image database must be addressed.
IPA survey responses indicate that many graphic arts execs are learning how to handle image archiving as a means of expanding their businesses, developing more control of the customer's database, reducing job turnaround and setting the stage to configure media for different formats.
This represents a significant opportunity for printers, trade shops and service bureaus. By offering digital image archiving services to their clients, these graphic arts firms extend value while deriving revenues from this offering. Perhaps more importantly, image archiving allows service providers to assume greater control of the customer's data.
The key, of course, is to be proactive in dealing with in-house customers' emerging needs. It also is vital that graphic arts firms understand and plan for continued change, including trends that may not always be obvious.
Science tells us that for every action there is an opposite reaction. Nowhere is that more apparent than in the graphic arts industry.
Like so many trends that have significantly influenced the market, there will come a point when the in-house publishing trend will reverse itself.
Approximately 20 percent of the process-color titles published today are produced in-house, according to the IPA study. That trend is expected to rise through 1998, when it will reach its highest level of approximately 35 percent of process-color publications of all types.
However, IPA data suggests that from 1998 on through the remainder of the decade, there will be a steady decline in the number of process-color titles produced in-house.
Laurent suggests a number of practical reasons for this gradual reversal.
1. Publishing is not the firm's core business. With the back-to-basics trend in business today, publishing operations increasingly are susceptible to termination.
2. Cost savings are not being realized. In-house publishing operations justify equipment purchases by identifying the projected cost savings that will result. These cost savings estimates often are based upon comparisons between what the firm is spending on outside services versus savings that can be realized by performing these activities in-house. Trade service firms and printers should be well-advised to make their clients aware of ALL incurred costs, even if they are not billed back.
3. Recognition of hidden costs. As in-house operations become more aware of the true cost of these electronic functions, they will realize that cost savings estimates are higher than can actually be achieved.
4. In-house publishing is not a profit center. When the economic stability of the firm weakens, management's commitment to an expense center often wanes.
5. The cost of ongoing support. The rate of technology obsolescence and the level of ongoing systems support and operator training often end up being more expensive than the initial installation.
6. Loss of the passionate advocate. Behind most of the sizable in-house prepress operations is an individual or a group of people who have championed the program. With time, champions move on, leaving the operation to defend itself.
In spite of the coming trends detailed above, the IPA study cautions graphic arts execs not to "wait it out." "To survive in today's business world, a proactive business strategy must be developed and implemented," cautions Laurent.
So what are the strategies graphic arts firms should follow in the coming years?
"The control of the job (and the money) increasingly goes to the first organization to get the file - service bureau, trade shop or printer," claims Laurent. It is within this environment that shops can cash in.
The IPA study recommends that companies build strategic [TABULAR DATA OMITTED] [TABULAR DATA OMITTED] marketing alliances or make acquisitions to get control of jobs sooner and keep control longer. This trend already has started, with some firms adding creative and design capabilities and others adding presses to handle color production. "The underlying issue," asserts Laurent, "is job control and the opportunity to win a larger portion of the allocated budget."
Another service that printers, trade shops and service bureaus might excel in is database and job management services for clients. Many clients, as stated previously, are able to use a desktop publishing program. However, they are not as likely to know how to manipulate and output their files and images to support multi-use publishing requirements.
For many graphic arts companies, opportunities exist to derive revenues from their technical expertise. Clients increasingly are willing to pay for services that only printers, trade shops and service bureaus can provide.
Among the types of services being offered are software development, in-depth training and round-the-clock on-line technical support. These types of operations are meeting with success in some markets, but consultant Laurent advises that firms establish autonomous business units to provide these services.
Larger firms in particular can identify new business opportunities and establish pilot business operations off-line. "Whether these business ventures are directed at multimedia, database management services or other market niches," claims Laurent in the IPA study, "they should be operated autonomously to avoid being absorbed by the mainstream business."
Last, but certainly not least, graphic arts operations of all types must remember that print buyers want more control of the job but not necessarily the responsibility for the finished product. When asked who has the ultimate responsibility for quality on the work produced in-house, 25 percent of the IPA respondents named the printer. Sixty-five percent said their existing personnel had responsibility, and an amazing 10 percent stated that quality was the responsibility of the system!
In spite of intimations of doom for the printing industry in general, there can be little doubt from survey responses from both the IPA and GAMIS studies that print is here to stay. Although non-print media will proliferate, it will largely be used to augment print, except in cases where it is critical to communicate volatile information.
"The ongoing challenge for the graphic arts, therefore, is working with industry customers to better understand and participate in the production of chargeable non-print media formats," claims Laurent. This represents an opportunity not only to ensure business growth in new areas but also to sustain traditional print business.
It all goes back to gaining control of the media buyer's database. The graphic arts firm of the future should be able to provide multimedia services as well as handle printing - either directly or through close alliances.