Industry guru Frank Romano reminds us that cost is what it takes to make something and price is what you can sell that something for. Hopefully, price is higher than cost. With printing, both cost and price have declined in recent years. This is good and bad. Good because lower cost coupled with stable value-based pricing produces reasonable profit. Bad because, as an industry, we tend to give the profit away.

The key to success in the printing industry has long been cost control.

This has been accomplished through heavy doses of automation in the form of digital workflow, computer-to-plate, direct imaging, automated presses, digital printing, and highly efficient pre-press processes. An example of this is a visit I made to a printing company that had the first layoff in their long history. They installed a CTP system that negated the need for the film stripping department, as well as platemaking and related personnel. It was somewhat eerie to pass by the glass-enclosed room housing a large CTP system with virtually no one in the room. After re-training, re-assignment, and other approaches a small group of people were left without jobs. The company had no choice: they had to automate to compete and they had to compete to stay in business.

Overnight, the workflow changed. Overnight, many of the skills of the old printing industry became shrinkwrapped—they became software-based processes.

I also visited one of the largest printers in the U.S. and saw a pre-press department that applied PDF workflows and on-line “blueprint proofs.” They had integrated the customer into the process and utilized the Internet as a primary communications link. In other plants I observed the smallest press crews in history as press automation allowed control of sophisticated reproduction equipment by small numbers of very smart operators. The days of multiple echelons of press operators with a hierarchy that would rival the military are gone.

Applications of technology such as these examples have allowed printers to cut costs and keep some semblance of profit in a very competitive market. At the same time competition and the relentless quest for lower prices by print buyers is squeezing most of the profit out of many jobs. The early dot-coms promised print buyers big savings. Most of those dot-coms are gone. Servador.com still says it provides its clients with 20-40% savings in purchased printing. Large print buyers are cutting the number of printers they use and forcing the few that remain to fight for the work. Auctions are making print as we know it a commodity and that is the worse thing that could happen.

Back in the 1950s and 1960s printers found a major cost advantage in switching from letterpress to offset. Much of the savings was in pre-press, but overall the printing industry was able to absorb an entirely new technology while maintaining an existing pricing structure. Hot metal and letterpress were expensive and print buyers were accustomed to paying the price because print required unique skills and competitors were few and far between. After offset, the barriers to entry fell and we saw a phenomenal growth in the number of printers. This engendered higher and higher levels of competition as more and more printers fought for the base of work. This period saw the rise of quick printing and the birth of many new commercial printers. Fortunately a growing print volume could sustain this growing base of printers.

While visiting printers throughout the U.S. I have also discovered a dark secret that is quite provocative: we, as an industry, are selling print for less than we did two decades ago and are passing most of the cost-cutting benefits on to the customer. One printer said that they are selling color printing today for a little bit more than black and white printing back then. They can do this because of new presses that give them makeready and speed advantages and other production advances.

This sounded a little weird so we tested the hypothesis by surveying several printing firms and finding someone at those firms who had data and experience that went back that far. This was not easy. Sure enough, for printing alone (putting ink on paper), the selling price today is equal to or about 6 percent lower than it was in 1982, considering inflation and other factors. This is based on twenty two surveys with commercial printers nationwide. What has happened is known as “profit migration.”

Printers make less money from ink on paper and more money from other services, primarily in digital printing, finishing, and fulfillment. Printers have had to move to new value-added services, especially digital printing, to find new profit potential.

Without cutting production cost, most printing companies would be at breakeven or less—neither of which is an acceptable condition. The Catch-22 is that continuing re-investment is absolutely necessary to stay ahead of the pricing-pressure curve. If you are not improving your workflow; you will find it mandatory.

Print is no longer growing at previous levels and we are seeing a contraction in the number of printers. Eventually there will be an equilibrium reached as the number of printers, print volume, and print buying expectations come into some sort of uneasy harmony. That will take a few years. In the meantime, cost-cutting is a fact; value added services and pricing are a required philosophy.

And now a musical interlude. With apologies to B.J. Thomas and “Raindrops Keep Falling on My Head”

Reply cards keep fallin' on my head
They keep droppin’ from every publication spread
Nothin’ seems to stop ‘em
Those reply cards are fallin' on my head, they keep fallin'

So I just did me some talkin' to the guy
And I said I never intend to reply
‘cause I already subscibe!
Those reply cards are fallin' on my head, they keep fallin'

But there's one thing that I know
The cards they send to re-sell me won't repel me
It won't be long til postage-paid mail steps in to help me

Reply cards keep fallin' on my head
But that doesn't mean my ink will soon be turnin' red
Anger’s not for me
‘cause I'm never gonna stop the cards by complainin'
I just return them by the stack
With nothing written on the back

Reply cards keep fallin' on my head
But that doesn't mean my ink will soon be turnin' red
Anger’s not for me
‘cause I'm never gonna stop the cards by explainin'
I just send the blank cards back
Postage paid and by the sack 

What do you think? Please send feedback to Frank by e-mailing him at