Monday, February 13, 2006


Are We Part of the Solution or Perpetuating the "Print is Legacy Media" Stereotype?

Could there have been a more lackluster and 1950s-style response to the proposal by the SEC to allow companies to distribute and conduct business electronically, and not print all of those annoying proxies, reports, etc. that come to clutter my and others mail, in our supposed electronic age. This is an important issue, as 70% of American households hold some kind of equities, directly and indirectly, often referred to as "the investor class."

The PIA/GATF response to the SEC's proposed rule change is highlighted at ; it says that this would be destructive to the printing industry and its suppliers. The SEC document is at

Our industry sounds like a barrier to progress, protecting decidedly outmoded means of communications, when it actually needs a good swift kick in the behind. We're already being referred to as "offline media" and reference to us as "legacy media" has been common in recent years. I'd rather be putting out a story about how our companies are already on top of this issue. After all, EDGAR, the electronic reporting service of the SEC has been around for about 20 years. Why do I suspect that FedEx/Kinkos might already be salivating at the prospect of being an approved outlet for ondemand SEC documents? What's my recommendation?

The first rule of the new age for our industry should instead be to admit that electronic communications has significant and broader benefits that make it better than print in numerous, and growing, circumstances. I've written and spoken about this often for the last two years. I discuss this in my Print05 presentation, which are still available at no charge, online (MP3 and PDF of slides). Printers should be at the forefront of helping companies use the new media.

The second part of the response would have been something like:
PIA/GATF members have invested heavily in the latest, most innovative ondemand printing technologies that SEC-reporting companies and investment intermediaries can use in the many circumstances where hard copy is needed and preferred. We are working with the SEC and the Postal Service to ensure that any barriers to prompt acceptance, production, and delivery of financial documents are eliminated so that companies and shareholders can benefit from the speed of modern communications, the reduced costs that companies can re-invest in core operations, and the enhanced function of an informed investor marketplace. We want to be sure that PIA/GATF member companies have the latest information they need to participate in this critical aspect of shareholder rights and protections.
I might make the current PIA/GATF plea internally with the SEC, but the public would get a constant flow of information about our best, brightest companies, and how important ondemand technologies are and what great value they offer to shareholders and companies.

Evidence of the still growing reliance and consumer acceptance of the Internet is all around us. I'm wondering if our bad fourth quarter was the result of a new Internet surge. According to a recent Nielsen/NetRatings survey, December searches were 55% higher than those of 2004, at 5.1 billion searches. (Some days I think I was at least a quarter of those). Google was just under half of those searches. That's 17 searches for every person in the U.S., just in December. Needless to say, shopping was probably involved.

WSJ article about online printing businesses, mainly about Vistaprint. I still hate their constant e-mails about their "free*" printing, but I must admit when I recently changed my e-mail address it was very easy to go back to my old order, change my e-mail address, and put in a new order, which I received four days later. This time, the proofing feature actually worked. It's interesting that so many online printers had to die before one profitably emerged. It's not that Vistaprint has industry-leading profits, it's distinctly slightly above mediocre, but now their core business is set and they may have extended gross profits as they move up the economies of scale. I'd still prefer to put the order in online and pick it up at my local printer as I'm out doing errands, but I know that printer will never do it, and has no interest in doing it. His store sign doesn't say "Legacy Media Store" but it should. Vistaprint has separated itself from the rest of the industry because of its obvious Internet presence.

The printing industry is the barrier to progress by nature. Due to the experimental and experiential path it has taken historically to understand its own processes, instead of an analytical and theoretical path, the industry is not able to evaluate new situations in an abstract way.

This lack of abstract thinking skills has surprisingly carried over to the press building engineering community, which is a group that should know better. This exists because of their relatively very low rate of innovation over many decades due to the lack of competitive pressure. Of course now times have changed but the culture of innovation based on science has not been developed and press manufacturers are caught in a bog of no vision.

I deal with developing new science and techinical concepts to address consistency and predictability of density control on offset presses. The industry is actually ignorant of how this process works and even with all this competitive pressure, they are reluctant to think in new ways. They can't imagine an outcome unless they actually see it. They have not been trained to think that way and then knowledge base is faulty.

Recently top technical managers of a large press manufacturer in Europe agreed that one of my concepts, which is a simple and low cost modification to a press, would make density control consistent, predictable and independent of changes in water, temperature and press speed. It took ten years to get them to that point. Will they go farther? I really don't know. From the way they talk, it seems that they can not connect the idea of consistency and predictability to the idea of sustainable competitive advantage.

The idea of having a solution to the most troublesome process problems should make people excited but not in this industry. At every turn, there is almost indifference to the possibility, instead of excitement and curiousity. The cultural lack of vision is the greatest barrier.

Erik Nikkanen
Fountech Inc.
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