Print media & the Great Recession

I am not an economics expert. When I sit down to read the business news I usually go straight for the tech stuff like you probably do. However, now and again I take the time to read economic assessments and forecasts. It is important for all of us—regardless of where we are in the value chain of graphic communications—to try to understand the business climate and how it impacts our professional and personal lives.

Without getting lost in so many facts and figures, it goes without saying that you need an idea of which way the wind is blowing in the overall economy even if you are planning to buy the latest Internet-enabled 3D HDTV much less than make a capital improvement or hire new staff. This is especially true now with what appears to be the aftermath of the greatest economic downturn since the Great Depression of the 1930s.

For these reasons, I welcomed the opportunity to read and comment on the recently published report from the Printing Industries of America “Moving Past the Great Recession: Print’s Recovery Path for 2011-2012 and Beyond.” The PIA’ s Economic and Market Research Department has done our community a huge service in providing a comprehensive outlook on the printing industry, its markets and technology segments.

The PIA document is broken up into four sections with each containing much that is valuable. I will highlight what I consider to be the most important aspects of each section and then finish with a summary and some conclusions of my own. You might want to go for that cup of coffee now before you read on, or you can just skip to the end.

The Economy: Recession and Recovery

The essential question here is: are we on our way up or down? Well, according to PIA, we’re actually moving sideways. The Great Recession was significant in terms of damage to the economy in comparison to the previous four recessions (1974-75, 1981-82, 1990-91 and 2000-2001). However, in contrast to these events—where the principle of “the steeper the decline, the stronger the recovery” prevailed—this recovery stalled following the fourth quarter of 2009 and not long after the recession was declared officially over (June 2009).

What this means is that much uncertainty continues. However, according to the report, “At this time, the most likely trajectory of the economy over the next two years is a somewhat stronger rebound with inflation-adjusted growth of 3.3 percent in 2011 and 3.5 percent in 2012. While this is not a robust recovery, at least it is improved from just a few months ago.”

Assessing the Damage: Print and the Great Recession

The printing industry took a significant hit during the crisis of 2007-2009. According to the PIA report, the Great Recession “shrunk print’s economic footprint by historic proportions last year” with 8 percent (2,943) of total printing plants closing and 15.6 percent ($25.9 billion) of total volume of printing falling between 2008 and 2009. The PIA’s caveat is that print remains a major part of the economy in spite of these declines.

In this section, the report makes some important observations about the different segments and technologies of the industry and the overall impact of the downturn on printing businesses:

  • Marketing and promotional printing is by far the largest component of our industry with 52.8 percent ($74.2 billion) of all shipments compared to informational and communications printing at 27.4 percent ($38.8 billion) and product logistics at 19.8 percent ($27.9 billion).
  • The category of “product logistics,” i.e. packaging, labels and product manuals, is the one print function that does not compete against other media (with the exception of manuals) and has a protected competitive position.
  • Digital printing grew throughout the downturn and projected to grow ahead of overall GDP, but this will come at the expense of the other categories of printing technology.
  • Profits for printing companies on average were -1.7 percent of sales in 2010 which was a decline from 2009 where profits were +1. 6 on average.

Print Market Outlook for 2011-2012

PIA projects that print markets will grow by 3 percent in the next two years based on the likely trajectory mentioned in the first section of the report. The report also predicts that the “shake out” of unviable enterprises and industry restructuring will continue. While this undoubtedly means more unemployed print company workers, the good news is that those firms that remain should see an increase in business volume.

The report refers to “survivors” as those companies that have made it through the storm and it predicts that we will see an overall growth of 12% for these firms. This is further broken down into 4% growth in conventional print, 16% growth in digital print and 16% growth in ancillary services. With printers’ profits generally lagging sales growth and the overall economy, PIA predicts that average profits will be 2 percent of sales during the next two years.

Different Paths: Printers Race for the Future

Here we get into the more challenging problems of the industry and our prospects for future success. Much of the material in this section is derived from a previously published PIA report called “Beyond the Horizon” (2009) and an upcoming book entitled “Competing for Print’s Thriving Future.” The main question here is this: how do move into the future and not just survive but thrive.

PIA puts printing companies into four broad categories each representing one quarter of the industry for the purposes of their analysis. Each group is defined by the combination of financial success and the perceived-value of the mix of product and service offerings:

  • Super Printers: 9 percent profitability
  • Survivors: 5 percent profitability
  • At Risk: 2 percent profitability
  • Expendables: -2 percent profitability

The key to movement up the scale from one category to the other is the ability to navigate from being a provider of printer products, to a provider of ancillary services, to a provider of business solutions to a provider of outsourced print management.

The report ends with the observation that when asked in a survey to select a strategy that best describes their firm, a majority of printers still select “general commercial printer.” This is one among many challenges that printers will face in the next year or two: how to address the transition from traditional print markets to the new world of communications and product and vertical niche services providers.

Summary and thoughts

These are the key points from the PIA report:

  • The recovery is going to be very slow at best
  • The entire printing industry was hit very hard by the crisis
  • There will be a further “shakeout” in the printing industry
  • Those who survive can expect a modest increase in sales
  • Industry profitability will also be modest and depend on where companies fall in the customer-perceived value spectrum.

The one area that the report does not discuss is the outlook on pricing. Although no figures are provided by PIA, I would submit that the softening demand and overcapacity problems of our industry have had, and will continue to have for some time, a downward impact on pricing. This undoubtedly is an element of the slow return to profitability that is predicted.

Over the past two years, we have been hit simultaneously by very difficult economic conditions and dramatic shifts in the media landscape. Budgets have been cut and the dollars that were previously spent on print media are migrating in ever-greater amounts to alternative technologies such as social media, eBooks, online portals, tablets and smartphones.

As an industry, we cannot run-and-hide from these changes; we must embrace them and find the appropriate role for print within the range of media options. We have to answer the question: what is it that only print can do that is both unique and plays a supporting role with the online world.

With the small signs of recovery in the business climate, although tentative and uncertain, we have cause for some optimism and can begin to once again to focus on those things that make print a cost effective, reliable and indispensable component of all publishing, marketing and communications programs. Along these lines, I would recommend the information contained in the PIA campaign called “The Value of Print” which specifically highlights many of these features:

Typography & the content of the message

When I was 19-years-old, I decided I wanted to be a graphic artist. It was actually during a drawing class that I became convinced that I needed to be a visual artist. I suppose I could have pursued fine art, but ultimately I was compelled by one thing: typography. Where do these graphic forms come from? Why do we use these iconographic images to communicate? How can typography (and other images) be used best to express the content of the message? These were and are still the most important questions of graphic design!

This brings me to the topic of my post. I just watched the documentary film, Helvetica directed by Gary Hustwit. As described on the film website, it is “a feature-length independent film about typography, graphic design and global visual culture.” Although the movie was made on the occasion of the 50th anniversary of the modern and ubiquitous typeface family, it is something of a primer for all of us: it helps to connect the desktop, Internet and social media generations with the bigger picture of visual communications history and theory.

Helvetica is indeed everywhere and the movie shows this with its rich visuals of daily life in countries around the world. But the film is very important for its review of the changes in the twentieth century that first led to the creation of Helvetica as an international standard, later saw a movement against it and now, in the age of online communications, has seen something of a renaissance. Perhaps the movie itself is part of the renewed appreciation in the twenty-first century of this breakthrough font.

Helvetica is the quintessential modern, sans serif typeface and it is connected with the strivings of the design community in the 1950s for something new and global in character. As designer Massimo Vignelli explains, “When Helvetica came about we were all ready for it. It just had all the right connotations that we were looking for. For anything that had to spell out loud and clear: Modern.”

Helvetica was developed jointly by Swiss type designers Eduard Hoffman and Max Miedinger at the Haas Type Foundry in Münchenstein, Switzerland in 1957. It was originally called Die Neue Haas Grotesk. Since Haas was owned by Linotype and subject to the marketing interests of the large corporation, the name was later changed to Helvetica. In order to sell the font particularly in America, Hoffman and Miedinger agreed to change the name to an alteration of the Latin word for Switzerland (Helvetia), i.e. Helvetica is literally: The Swiss Typeface. The film includes an interview with Alfred Hoffman, son of Eduard, reviewing the specification sheets and hand written notations from the type design process. Hoffman, although he has gotten less credit for Helvetica than his partner, is revealed in the film as having had a clarity of vision with regard to the appearance and aesthetics of the form.

Several of those interviewed explain that the runaway attraction of Helvetica for the graphic design community, especially for corporate identity in the 1960s, was its simplicity and neutrality. Helvetica is the cameleon of graphic communications; it can be used to embody the identity of almost any concept or organization. It can also be equally used to communicate simple public information and is very often used in directional signage. Soon almost everyone was using Helvetica to transform their look and cast away the remnants of the premodern world. The film then illustrates the impact of the font on US and European corporations; the number of companies that adopted it appears substantial and shocking even for someone like myself who pays attention to such matters.

But, as the movie also clearly shows, Helvetica—and the rules of typography as they had come to be understood—eventually came under attack by notions of postmodernism. This took the form of a rejection of the structure, clarity and rules that were the bedrock of the design of Helvetica. The critics said that typography itself does indeed need to convey something more than the meaning of the words they express; some even said that the type needs to have its own message and the meaning of the words are of little consequence. In the backlash, Helvetica was said to have become identified with safety, conformism and predictability in design. Helvetica and its sense of structure was the dull and conservative background noise that had to be displaced by more expressive forms.

The counter-culture began in the 1970s as the postmodernists circumvented what they perceived as the boredom of Helvetica with things like illustrated typography. Veering in the direction of fine art, type began to take on many different chaotic forms. Experimental works that pushed the limits of legibility were the rage. Postmodernist design was also enabled by the technological revolution of the personal computer, where the structured principles of type design were violated by anyone who felt like it. With that went the business of typography; Adobe, Apple and Microsoft became the bearers of the intellectual property of generations of type designers going back to Gutenberg.

The theory of the postmodernists, or lack thereof, is expressed most clearly in the film by David Carson whose work became popular in the 1980s and world-renowned in the 1990s. Known as the father of “grunge design” Carson says, “I have no formal training in the field. In my case, I never learned all the things I wasn’t supposed to do. I was doing the things that made sense to me. I was just experimenting … I didn’t understand why people were getting so upset … only much later did I learn what the terms ‘modernism’ and this and that.” While the aestheticism Carson represents may be good at conveying visual atmospherics, it is not effective for typographic communications; it is all about impact through anticommunication (if that is even a word).

Fortunately, and I think naturally, the deconstructionist approach could not predominate. With the development of the online publishing and the pixel grid of the computer display, typography has moved back more closely to rationality. While it is certainly possible to find poor typography on the web, there is an awareness and sensitivity among a growing group of us about what is good, effective and appropriate use of type. As is pointed out at the end of the film, social networks are now playing a role in the development of new and innovative approaches to typography. The growth of the networked mobile device will certainly also contribute to this evolution.

I am the last to argue that the history of typography ends with Helvetica. However, it appears that things went off-the-rails for a period and we are now somewhere between 1957 and the next great step in the evolution of typography beyond Helvetica. Perhaps we will see something that dovetails with tiny URLs, texting and 140 character limits.

Johannes Gutenberg: c. 1398 – 1468

Bust of Johannes Gutenberg outside the Gutenberg Museum in Mainz, Germany

The known details of Johannes Gutenberg’s life are few and far between. With documentary evidence quite meager after 600 years, there are many gaps in his biography. Due to the lack of information, a mythology has been built up about Gutenberg that (1) his ideas about printing came to him “like a ray of light,” (2) that he was a failed businessman and (3) he died in poverty. None of this is true.

What is known is that Gutenberg left Mainz in 1430 due to political conflicts between the patricians and the guilds. Gutenburg, himself a patrician with an inclination toward the guild members, was owed considerable sums by the local government. It is likely that Gutenberg began his project in 1439 while living in Strasbourg. Far from it coming to him in an instant, Gutenberg worked on what he called his “secret enterprise” for some ten years before it was complete and ready for commercial production. The processes involved in the technique were complex and expensive and would have required numerous approaches and attempts. Among them were:
1.) Typeface design
2.) Engraving of patrices
3.) Manufacture of matrices
4.) Creation of the manual metal typecaster
5.) Composition of metal alloys
6.) Ink formulation
7.) Experiments with paper and parchment
8.) The construction of the wooden press machinery

By far the most significant of these, was (4) the invention of the handheld mold for casting metal type. While I was at the Gutenberg Museum in Mainz, Germany in June 2008, I asked if any of the original casting devices were existent and was told that none had been preserved; the ones that were in the museum were recreations from information available about how they were constructed. This information did not include any drawings or schematics. Below is a video of a demonstration given by the museum on Gutenberg’s invention.

It is believed that Gutenberg returned to Mainz in 1448 and it was around this time that the process was finalized and live projects could be produced with his invention. In 1449-50, Gutenberg secured an investment from Johannes Fust and the two became partners, opening the first commercial printing establishment in the world. A rented facility was located, new presses were built, a staff was hired and trained, materials were procured and stored for the purpose of producing the 42-line Bibles that are well-known.

In 1455, there was a business dispute between the two men and Fust sued Gutenberg in court on charges of refusal to pay interest on his loan and embezzlement. In a complex ruling, the court issued an order for Gutenberg to pay a portion of what Fust demanded and the two parted company. The legal dispute with Fust certainly set Gutenberg back as he was unable to pay immediately. Fust kept the Bible inventory, opened up his own printing facility and took the most skilled employee of the firm (Peter Schöffer) with him. However, Gutenberg was not ruined and he continued to work energetically on the development of his technique … he just had a competitor down the road, another first in the industry.

It is believed that Gutenberg continued to produce Bibles and other products such as calendars and letters of indulgence. In 1465, the archbishop of Mainz, Adolf von Nassau, appointed Gutenberg as “gentleman of the court” in recognition for his achievements which he enjoyed until his death in 1468. His invention spread rapidly throughout Europe, led to an tremendous expansion of literacy and is considered a key element in the Renaissance.