3/17/2010

CMYK is the new SXSWi

This is to continue a twitter-burst about print, and the digital age.

I work at a commercial print shop. No, my company did not pay me to go to SXSWi. Hmm. Can't figure why not.

I actually had a pretty tough day at work today. The company is refiguring itself, and in the process, this means that often there is a lot of work to do with few people to do it. Other times, it means there is little work to do and too many to do it. But this is all part of "refiguring", right? I'm sure you know what I mean.

It's weird being a young person, artistic and idealistic, and working in the print industry. And I don't mean working as a "designer", because this is what all the young folks want to do these days. No one wants to learn how to operate a six-color press with a perfector, or mix ink, or play the irritating and demanding fast-slow-fast game known as "bindery equipment".

For some reason, I chose this. Not for least of reasons, because I'm a writer, so I have an interest in knowing a bit about it when all the old folks in the industry are gone. But also because I believe in print, even though I listen to mp3s, blog, tweet, and really really like my iPhone.

Those who "design" things, using computers almost entirely, regardless of age, know very little of the details about how the things they design turn into, often times, physical realities. Those who use those physical things mostly know even less. But the funny thing is, despite how digital everything is now, many things still wind up on paper, and probably still will.

As I just mused, ever see anyone using a ZIP disk? No. But still, despite Amazon, despite the iPhone, paperback book stores are still open for business. Paper is a hell of a medium. You can shape it, recycle it, repurpose it, you can even eat it. You can't erase it, you can only destroy it. It's made from plants, and you can make it in your kitchen sink.

My great prediction for the future of print is not really a prediction at all. It's more of a comment on any cheap, easily available, widely usable technology. Its use will change, as soon as we all figure out how to use it.

The greater change, if there is a change, is in capitalism. Capitalism has done the production and distribution of print for a long time now, and this production and distribution has followed capitalistic standards and typical tendencies. This will change, because capitalism, despite what the open-market profligates will tell you, is actually a pretty narrow window of production and general cultural momentum.

Economics, on the other hand, is not a narrow window. But economics has never been dependent on a so-called "open-market", or any of the features thereof. Actually, most economics has operated free from the idealistic zone of an "open-market". Black market, grey market, state market, or non-market economics is just as big as it ever was, and operates without an open-market at all.

Open-markets, which supposedly have their own prestidigititous logic less like the I Ching and more like a Ouija Board, have less to do with capitalism, than with an general ignoring of causes to prove the general fortuitousness of the effects. You have to admire it really. It's not even tautological, i.e. using the supposition as proof of its own validity. It is assuming anything to be valid, as long as it can be used as an argument for the validity of the status quo. "Things are great! This proves that things will continue to be great!"

I'm getting off track, but basically the open-market has allowed capitalism to not even wonder why it's getting so rich, and then when it stumbles, it can't figure out what to fix. Instead, it fixes nothing, and instead argues that it's still rich, and this is why it will be richer tomorrow. Anybody you know have a really expensive purse, and several thousands of dollars in credit card debt?

Print was sold as a commodity for a long time, not wondering about what sort of a commodity it was, not caring, as long as it continued to sell. When print stopped selling so well, all of a sudden the print industry had to make up some bullshit about what it actually was. Working in the print industry, I've had a lot of people try to tell me that print is actually junk mail, and that junk mail is actually the key to how businesses (the businesses paying for the junk mail) make money. This is funny, because they are arguing that junk is a commodity, and not only that, but that junk is the commodity that makes all commodities valuable. If we printed money, perhaps they would have a bit of a point. But we don't. So it just sounds stupid.

It should also sound stupid to anyone who has read a book.

I'm not trying to argue that there is some sort of a long-tail in POD publishing, or artisan books, or self-published e-marketing with a twitter presence. All of these arguments are just more of the same, i.e. the print industry trying to convince themselves that the products they have been selling at a profit all this time are still profitable, even though they can't make such a big profit on them anymore.

But I'm not in the publishing industry. I'm in the print industry. So let me tell you a little bit about print that you might not know.

- Print still exists. Sure, there's less work now. We lost the clients that had us print their forms in triplicate, and those that send out company wide newsletters every week. Now they do all that online. But we still print catalogs, envelopes, packaging, letterhead, business cards, magazines, postcards, art cards, posters, maps, manuals, and other stuff. We print less of that too. But we still print it. And we will, because people realize they don't need to spend money on it all the time. But often, they decide they do need to spend money on it. And not just because they can't use their computer.

- Print is still profitable. Did you know that five, ten years ago, it was normal to charge a 100-300% markup on print? Print literally was printing money. Now we make a 50-100% markup over cost. Apple makes a supposed 500% markup over cost on the iPhone. But that is assembled in foreign sweatshops. We can make a 75% markup with american materials and living wages in any american shop space with a strong floor, electricity, and fresh water. Yeah, I know: the capitalists are pissed they lost their gold mine. But this brings me to my next point...

- Apple can charge so much over cost for the iPhone because it is Apple, not just because it is something people want to buy. I don't mean that they simply have a brand, though obviously that is involved. The iPhone is a world-wide technological infrastructure, requiring world-wide IT support, communication networks, sales structures, and so on. They wouldn't have made X billion dollars if they didn't acquire X market share of the ENTIRE WORLD'S SMART PHONE MARKET. You and I could never make and sell an iPhone. Only Steve Jobs could. The best we could hope for is to maybe work in an Apple Store, or program an iPhone app.

On the other hand, you can earn a 75% markup by printing a thousand books. True, you have to find someone to buy a thousand books (wholesale or retail), and you have to own a print shop. To open a commercial print shop, you probably need 5-10 million dollars. That's not nothing. But if you are dreaming of opening a print shop, you could do it. If you are dreaming of inventing and selling an iPhone, you are an idiot.

- And the technology is changing. Thing about this example. You can lease a color digital printer, for, say, $1400 a month. You pay the base charge for all your supplies except paper, and then 5 cents per impression (one printed sheet). If you charge 10 cents a click (that's way conservative) you can make 100% over click charge, and it would only take you 21,000 impressions to break even. That's one run of 100 books with 210 full color pages. You sell another 100 books, and you just made $1000 pure profit. All you need is twenty square feet of floor space, and electricity.

- But then, of course, you have to think about paper, and binding, and someone to run the machine, and someone to buy the books (in the example above, a retail establishment could sell the full-color 210 page book for $30 and make 70% over the production cost), and someone to make the content of the books (do your own math for that). And this is where the capitalist says, "damn it, why can't it just print gold, or why aren't people showing up at my door with orders for 100K flat color sheets and providing their own paper?"

Well, this is where things are changing. The print industry would love to sell flat color sheets in runs of 100K. The rest of the world calls this junk mail. But the fact is, no matter how digital the world gets, can you see a world where there is not someone who would want to make/buy full-color books?

The fact is, print is just too damn easy, and too damn big. If you look around, you'll see a lot of new paper products you've never seen before. Some of it is cute letterpress stuff, some of it is paper craft inspired by Japanese arts, who have been more interested in paper than us for a while, even though they have plenty of smart phones of their own. Some of it is stuff you would have seen mimeographed or faxed or xeroxed twenty years ago, but now is crisp, colorful, and well-printed. Some of it will be free, or nearly so, because it is that easy to cover the costs, if you know what you're doing. Most of it, I would imagine, you will only see a few places, and then you will never see it again. But I'd bet you'll be seeing more of it than ever.

So the lesson of the example is that print is still possible, and even profitable, but it is shrinking in size. This means the capitalists are pissed, because no single book is going to be an iPhone. But it also means that someone is going to be making money, even if they are doing it in a garage, in runs of under 100, and racking their brains on who they are going to get to fill the pages and who is going to buy it. They might have a few hard days at work, like I'm having. They will never get any noticeable market share of anything. They will never be a publicly traded company. They likely will not be capitalists. But they will create their own market, as they learn about their industry and about their technology.

2 comments:

Michael said...

Adam - I enjoyed this piece. It struck a chord. I am currently in the process of leaving a big magazine publisher in the UK after 22 years. Having been responsible for the production of roughly 1.8M books each week, I am only too aware of the issues surrounding the commotidisation of print. Going from a high value, admittedly inefficient, almost craft based product (even at the mass manufacturing level) hey day in the 80's, to the, sleek, streamlined, comparatively low skilled, low to no margin, shrinking business that it now is. However, like you, I too am optimistic about the continued value in print, in the thoughtful, beautiful pieces of print that people will engage in and cherish.

You are the first printer that I have heard in years, that I have heard mention double figure margins. How on earth do you do it?

Thanks

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