‘Those who offer something different will be the winners’

At a post-Drupa PrintWeek event, industry guru Frank Romano discussed the web, diversification and newspapers’ futures. Here are his key points.

14 Aug 2012 | By www.proprint.com.au

Diversify to survive was the message from print guru Frank Romano, who spoke at a PrintWeek event last Wednesday (July 4), entitled ‘Frankly Speaking’.

While Romano, whose career spans 50 years in the printing and publishing industries, and who is currently professor emeritus at the Rochester Institute of Technology (RIT) in New York, was positive about the future of print, he warned that printers would need to explore new markets as print volumes continue to decline.
“In the past, commercial printers only had to compete with other commercial printers, but that is no longer the case. Now you have to compete with suppliers from outside of your niche,” he said.
Romano, who highlighted trends from around the world and their impact on the print sector, noted that many commercial printers had begun to diversify into packaging, but warned that packaging could suffer the same drop in margins as commercial print.
He said: “In packaging, we are starting to see price competition similar to what we have seen in other markets. If the trend continues, we will see the commoditisation of packaging because printers just want to keep their presses running. They don’t want to lay people off.”
Other challenges facing those in the packaging sector are the continued offshoring of manufacturing, said Romano, but he added that inflation in China is making it less attractive and causing many companies to set up elsewhere.
“We are seeing shifts away from manufacturing in China where labour rates are going up,” he said.
Rather than bring work back to the West, however, manufacturers are looking for cheaper labour in other countries, he noted.
“We are seeing some printing shift to Vietnam where the industry is growing,” he said.
Romano suggested that the need for newspaper printers to diversify into other sectors is increasingly urgent. Echoing comments made by Rupert Murdoch, who warned in April that printed newspapers will cease to exist in 20 years, Romano highlighted the willingness of older generations, who have typically been characterised as technology-averse, to embrace devices such as iPads and Kindles.
“This, along with the immediacy of online news, makes me believe that printed newspapers are not long for this world,” he said. “If newspapers survive, there will probably be very few of them and they will have to provide something other than news.”
He said that he was seeing a growing trend whereby newspaper printers were competing for work with commercial printers.“At the printer that produces the New York Times, three-quarters of the work done on their presses is commercial work,” he added.
Romano expressed doubt over the market for on-demand newspapers and said that he did not expect print on-demand to change the newspaper sector in the same way that it has impacted books.
Brighter future
He predicted a brighter future for magazines, adding that the catalogue market is “robust” and” doing well”.
Romano also recommended that printers explore other, less conventional growth areas, such as textile printing and security printing, rather than focusing purely on more traditional sectors. 
 “Printers need to discover new markets in areas that they may not have considered before, such as textile printing or hologram printing using traditional presses that have been slightly modified. We are already seeing some printers looking for these new marketplaces,” he said.
Another potential opportunity highlighted by Romano was the shift in the breakdown of printer revenues, with a larger proportion often coming from non-print services.
“More printers are offering additional services such as fulfilment and direct mail, which can generate more revenue than the actual printing of the piece,” he said. 
Romano also highlighted that some of the finishing equipment shown at Drupa could create opportunities by enabling printers to diversify by adding value to their work.
“We saw devices such as an embossing machine demonstrated by Scodix which gives you texture on the material. Printers can differentiate themselves with the finishing of their work,” he said.
The tendency of print buyers to focus only on price was another issue noted by Romano, who told of an association in the US called Print Buyers International, which aims to educate people in the sector about different printing techniques, and how to successfully bring print into the marketing mix.
Romano concluded his presentation with a similar message to the one with which he opened: he emphasised that, while print volumes will continue to decline, there will be winners and losers.
“Printers who can offer something different and who can add value, whether through additional services or through finishing applications such as foiling, embossing or stamping – the businesses that do this will be among the winners,” he said

Words: Melanie Defries

30-second briefing: Romano’s words of wisdom
 - Printers need to explore new markets, including less traditional sectors such as textile and industrial printing.
 - Many commercial printers are moving into packaging and price competition is starting to appear.
 -The trend for printers to diversify into packaging could lead to the commoditisation of the sector .
 -Inflation in China means that companies are starting to set up factories in different countries such as Vietnam, which has a growing print sector.
 - Older generations are embracing new technology, such as iPads and Kindles, which could contribute to the demise of newspapers.
 - Newspaper printers and commercial printers are now in competition for commercial print jobs.
 - At the New York Times, 75% of the work produced on the presses is commercial print.
 - Printer revenues are coming from changing sources, with some printers making more money from services such as fulfilment than from printing.


Opinion: This Drupa found its identity in the variety of technology
- Frank Romano, Professor emeritus, RIT

I have never seen so many printing technologies in one place at the same time as at Drupa 2012. We had offset, gravure, and digital to name but a few. While this level of choice is a good thing, it leaves people trying to figure out what technology is best for what they want to do and that is the real issue.
Having stayed at Drupa for the duration and having attended every press conference, I have drawn some conclusions. Offset has improved incrementally. There were great leaps of technology but offset got better in terms of higher quality, better efficiency and greater productivity.
All of this is relevant, of course, if you buy a new press. I encourage printers that have two or three older presses to replace them with one new one. It will cost less to run, as you will cut manpower costs and be more productive in the process. However, printers like having two of something in case one happens to break down. That is their choice.
Looking at toner-based printing technologies, these remained static while digital inkjet technology also improved incrementally. 15% of print worldwide today is produced digitally, but when you say there are a trillion possible pages that can be printed digitally, you are in danger of commoditising that technology. This is wrong – especially when you consider the developments taking place in that sector.
B2 was a prominent technology at Drupa but much that was on offer is a while off from becoming reality at present. You look at the Elan machine – a year away; the KM1 Konica and Komori tie-up– a year away; the MGI Alphajet – a year away. And it’s the same with Miyakoshi and Ryobi, too.
The real growth in print is in inkjet, but this is where Drupa is all about hope, because much of what we saw there will not be ready for two years. There is also an argument concerning whether we really need B2 inkjet machines. In my eyes, the most overlooked technology at Drupa was the Highcon Euclid. This machine, an Israeli device, is very interesting, but questions of speed, the cost of the machine and cost of the unit still need to be answered.
The Scodix digital embossing technology was another highlight for me. People will pay for the value of that sensory approach – when you walk into a print competition, you know that you will be seeing their best work, but what differentiates between the competitors is finishing. 
Ultimately, people will remember Drupa as the Landa Drupa and its technology has phenomenal advantages. What Landa has promised to give, more than anything else, is the ability to print on any kind of paper and any substrate to a degree – unlike inkjet, which requires a coating before printing. 
With Landa, you have the potential for a stable platform going forward by printing onto any paper, much like offset technology. A lot of people have put their money where their mouth is. When it comes out, they want to be in the line to get it. Benny Landa still has some way to go in terms of quality, but you know he will make it work because he has his own money behind him.