Thursday, January 26, 2006


The Print Council: A $5000 Return for Every $1 Invested

I read with great interest the press release of the Print Council today, which can be found at

It was titled "The Print Council's Expenditures Approach $1 Million," and it details the value of membership dues, donated ad space and public relations services, and other contributions.

The statistical impulses arose within me. Over the past two years, commercial print volume is down about $5 billion dollars. I had to do the math. That's $5 down for every dollar spent. Whoops, that's not right. It has to be $50. No, that's not right either. Just to be sure, I opened my spreadsheet program, and it's $5000.

Yes, for every $1 achieved by the Print Council, printing volume goes down by $5000.

So I just assumed that this was a conspiracy by people who hate print. Therefore, the Google founders must be at work.

So I have a deal for them. Just, please, put us out of our misery. If Google donates about 41,000 shares of stock to the Print Council, we can all go home for the rest of the year, because that would erase the $88 billion in U.S. commercial shipments. Since there are almost 200 million shares of Google outstanding, giving 1.3 shares to every print business every year will probably net them more than they are making now. After all, to hear printers explain it, no one makes money in the printing industry. In fact, Google has enough shares issued to give every U.S. printer 1.3 shares of stock every year for 4700 years.

Measuring your success by how much has been donated, or how much has been spent, is not particularly good. Businesspeople know that. Investments require positive returns.

What will save the industry is not an association, but the innovative actions of motivated individual entrepreneurs. Those people generally don't work well in groups. And they know that a loss of $5000 for every $1 invested is not a good idea.

Saturday, January 21, 2006


Warning: Self-serving Blog Post Ahead

Like everyone blogs out of the goodness of their heart?

Industry deal-maker Harris DeWese made a very nice and generous mention of me and in his widely-read column in the January 2006 Printing Impressions.

Monday, January 16, 2006


I Admit It, I've Called It "The Post Awful" More Than Once

The Washington Post has an article about the future of the Post Office.
The USPS is often a marvelous organization, but it's also a symbol for the effects of constant meddling by bureaucrats, politicians, unions, and big business interests. It is a horse designed by a committee, a camel. I didn't say dinosaur.

Much is made about how the Post Office has to deliver to every address, no matter how remote. I'm not aware of any restrictions that UPS, FedEx, or others have in this regard: at one time they did, and I presume that they still do.

And as far as the idea of just having one person visit an address and it being cheaper? Nah. One of the paradoxes of economics is that it never works out that way. There's things called "division of labor" and "specialization" and "competition" and "competitive advantage." None of these lead to a singular delivery service or delivery person. That chaos of trucks going from business to business is the marketplace working to deliver the lowest total cost. When you look at the costs of sending packages over time, that chaos has been an incredible boon to customers and businesses. Its efficiency means that we can shop on the Internet looking for the best price of goods, anywhere, and have the assurance of getting exactly what we ask at historically low costs in a comparatively very short time.

What needs to be done? What they'll never do... free the postal service from government regulation. It will have two to three years of horrible chaos and disorganization. Just like airline fares, telecommunications services, prices will drop, delivery will improve, and creativity will replace inefficiencies. For years, the postal service has been protected from the marketplace. That's one reason why its efficiencies are not known or understood. Prices only go up. Costs are just shifted to mailers as the postal service claims to offer discounts. The discounts only result in more byzantine and confusing regulations. It just becomes a shell game for cost accountants.

One of the reasons is that prices are fixed. UPS, FedEx and others were able to adjust prices in the recent energy price spikes and stayed profitable. When prices are fixed, consumers never understand the nature of what they are buying. It also means that prices cannot fall. Trying to work in a tight budget almost always means cutting around the edges, trimming here and trimming there, doing something better now and then, but not changing the core of a business. Trying to work when customer dollars can easily go somewhere else always forces a reinvention of a business.

UPS, FedEx are often cited as parcel specialists that would not be interested in distributing mail. What never gets into the argument is that by law they cannot get into that business. They only got into businesses that they could get into. In fact, there was a suit years ago, where the Post Office tried to sue FedEx because they were allowed only to deliver "urgent letters" and not regular documents or letters. They sparred in court a few times; I found this link on the Internet. There are many other situations as well; the postal service can't offer discounts. It can't negotiate fees with mailers. It can't adjust prices for seasonality to balance its workload. It can only accept mail in its own system; it can't offer customers "your newspaper can be delivered here" or "we'll accept all of your packages at your PO Box" or "you can send this by UPS or FedEx or by Express Mail." No, you have to go to a UPS Store or an office superstore to get some of those services and get access to choices.

Businesspeople hate free markets; one of the strangest things of "common wisdom" is that they love them. Economist Bruce Bartlett explains it well: "The last thing most businessmen want is a free market, where they must compete, slash prices, continuously innovate, suffer narrow profit margins and live constantly on the edge of bankruptcy. They would much rather have assured profits, monopoly positions, price supports, trade protection and the other trappings of a corporate welfare state." Free markets mean that there is a significant risk of loss. That fear of loss is what stimulates investment to reduce costs and a bias for action to confront realities sooner than waiting for a commission and hearings to determine what their prices will be. It would be a vastly different Postal Service that would result, but the fear of change will keep the camel well-fed.

As I'm writing this, I know Harrisville, RI's late postmaster Roland Rivet is turning over in his grave. Roland was one of the pleasures of having a business in our small town, a postmaster who loved the mail and loved his customers, and always took that extra step. On Sundays, he would stop by and wash the stations two panel trucks. He thanked us for buying postage for our survey mailings, saying that we could have gone anywhere. He gleefully assigned us business reply envelope permit number "Oh-Oh-One" as he read it to me over the phone back in 1990. His death in 1997 was met with a string of postmasters just counting the days for their retirement. He was different than the other postmasters, and it showed in the people who worked with him. What was different about Roland, and he didn't know it, was that he was an entrepreneur who loved his business. It just happened that his business was a little post office in a tiny New England town. His work in the bureaucracy was never rewarded by the marketplace, just by a schedule of salary levels based on seniority and volume that some far-away committee established. And that's the shame of it: there are some marvelously talented people in the Postal Service, numbed by the ideas of job security and stability, which become paramount, and dims their enthusiasm and creativity... so much so they forget they have those capabilities.

Friday, January 13, 2006


Dr Joe's Assigned Reading

The eroding relationships of printers and publishers is the subject of an anonymous article in Folio:

Article about European printing trends

The new format of TV Guide is touted as a success (sales up 38%!)... until you read the last paragraph (circulation down 60%! -- rats, it really does make a difference what year you compare to, doesn't it?). The operation was a success but the patient died.... well, almost... should we really count it as a new magazine? It's nothing like the old one.,1,6343202.story?coll=la-headlines-business

Ah, the old days... I remember when GAF was a well-known but dying company in the graphic arts, and then revitalized by investor Gary Andlinger (who was trained by ITT legend Harold Geneen), and then sold for 20x what they bought it for by International Paper... who was on a wild and fruitless acquisition spree at the time. The Anitec/GAF site in Binghamton, NY now has a new owner...

e-Marketer's seven predictions for 2006

Wednesday, January 11, 2006


Dear Folks, Sorry I Haven't Blogged Lately

Gosh things have been incredibly busy here. I've been trying to get used to the weekly publication schedule of the free weekly e-mail, the paid weekly subscription podcast and presentation (which finally has a name: The Contrarian View), and the weekly column. It's all coming back to me now... I remember how to do this...

Below are a variety of articles that have caught my attention.

Hachette Filipacchi Media creates a new digital position in its organization. Article has great comments about how non-print formats are changing the publishing business.

Gee, why were November print sales so awful? This article may have some insights. Note the change in media allocation that seemed to occur earlier in the Fall.

BtoBOnline recently had a survey of marketing execs about their plans for 2006

China's printing industry. Some interesting data on capex in here. Beware, data geeks: most printing data for China includes everything imaginable where a chemical ends up on a substrate, such as textiles, specialty promo items, as well as packaging.

2006: The Year E-Mail Marketing Comes to Age, or at least that's what this article claims

Two Barrons articles, but you must be a subscriber to see....
Economist Gene Epstein talks about how writers and talking heads got the year's economic stories wrong
And a review of the recent Las Vegas Consumer Electronics Show

Michael Kinsley of Slate writes in the Washington Post about the death of newspapers

I've never believed that "convergence" describes what's really going on with technology and gadgets at all. Two things passed my desk that show how silly the convergence argument can get.
Great Dutch lampoon of cellphone convergence. So what if you can't understand the language... the video is just hilarious.

But as proof that something else is going on than convergence, and also proof of original sin and man's fall from the grace of God, this product serves no useful purpose other than horror and dismay. The wrath of the almighty will make us pay for this one.

European business statistics are available here:,30070682,1090_31583003&_dad=portal&_schema=PORTAL

Famed investor Mario Gabelli's Global Multimedia Trust closed-end fund (symbol GGT) has long been in my retirement portfolio. The recent edition of their quarterly report (starting on page 2) had some very interesting commentary. (You may want to buy the fund. I've been selling my shares gradually to deploy for other opportunities, so that probably means that it will double or triple in value soon now that I'm lightening up).

Sony's e-book reader, Libre, will finally be aggressively market. From folks who have seen it I have heard that it is just stunning.

Profile of a Canadian printer that I found interesting

Story about PC connectivity, and how that market seems endless

Speaking of that, Walt Mossberg of the Wall Street Journal had a great article about how individual users are way ahead of corporate users when it comes to PC technologies. It's the loss of control that scares IT managers, that somewhere there's a rogue employee actually using technology to be productive. Believe it or not, I have bumped into companies that are still using Windows98 and Office97! The article is mainly about how the big PC makers cater to big business, and only a few niche players like Alienware, and, of course, Apple, cater to real people. The article is downloadable for subscribers. If you can't get it, send me a note and I can forward it.

Wednesday, January 04, 2006


November 2005 Shipments -6%... Worst Showing of the Year

November 2005 printing shipments were down by -6% compared to November 2004. This is the steepest monthly decline over the past year, rivaled by the -5.8% decrease of July. Since June, the average monthly decline has been -5.2%. Historically, September through November is the strongest combination of months for commercial printing volume, and these were down
-5.4%. 2005 looks like it will be -3.3% overall, but on an inflation-adjusted basis, it's -6.0% compared to 2004 and -9.7% compared to 2003. I was recently chatting with someone about comparisons with GDP, and the GDP growth of around +3.5% to +3.8%. That's real growth, however; in current dollars GDP is up +6.0 to +6.5%. So the difference in economic growth is actually GDP +6.0% compared to -3.3% for printing, or a 9.3 percentage point spread. I know people like to call me "Dr. Doom" (and then whisper to me that they know I'm right but they're afraid to say that to their bosses), but I'm just saying what the data plainly say for themselves.

There's more detail in the latest Data-to-Go release, just posted on the e-store.


2006 Index of Economic Freedom Released

The Heritage Foundation has released its annual Index of Economic Freedom. It is a free download as a PDF, and is packed with frank assessment of more than 100 economies and lots of data. Highly recommended.

Information page with download links
Press release

The most free economies and their ranks are:
Hong Kong (1st)
Singapore (2nd)
Ireland (3rd)
Luxembourg (4th)
Iceland (5th)
United Kingdom (5th)
Estonia (7th)
Denmark (8th)
Australia (9th)
New Zealand (9th)
United States (9th)

The least free economies are:
Turkmenistan (148th)
Laos (149th)
Cuba (150th)
Belarus (151st)
Libya (152nd)
Venezuela (152nd)
Zimbabwe (154th)
Burma (155th)
Iran (156th)
North Korea (157th)

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