IN3: Why the Internet is Bad for the Graphic Arts Business

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Research

Why the Internet is Bad
for the Graphic Arts Business

Published: January 10, 1997 Updated: December 15, 2001

Walking around the giant Fall Internet World show here in New York, you could see how much money, time, and talent is being spent on new communications businesses. Hardware, software, digital design, electronic commerce, multimedia, publishing, entertainment, manufacturing, finance -- there’s no industry that isn’t being changed in some way by digital technologies. It’s not just the Internet, it’s the whole texture of the wired world making communications faster, easier, cheaper and more automatic. That can be very bad for the graphic arts business.

The problem for most of us is that the changes are too big and they’re coming too fast, and they’re sucking the profit margin from many companies. Digital communications follow a whole different business model from the standards we’re used to, and a lot of what we’ve learned about the way business works no longer applies in the electronic age.

Economies of scale, for example, don’t apply to Internet publishing: Once you put up a web site, it costs about the same to ship pages to 1,000 or 100,000 readers. Customer service is different on-line: electronic hardware and software sites sell millions of dollars-worth of product with nobody answering the phone or punching up the sale on a cash register. Marketing approaches have been turned inside out: Interactive advertisers focus on personalized advertising messages instead of broad national branding and awareness campaigns. Management and labor are both under the gun: Everywhere from banks to airlines to copy shops to gas stations, digital do-it-yourself technologies are making tellers, ticket clerks, printers and pump jockeys—and their bosses— increasingly obsolete.

Where’s the profit margin in all of this for graphic artists, prepress firms and printers? Desktop publishing in the 1980s proved that many people have the inclination (if not the talent) to create pages on their own, and digital prepress technologies have replaced most of the high margin type and prep work done in the U.S. When I worked at a type shop in 1980, we charged $3.00 to set one inch of magazine copy from manuscript to camera-ready repro proof. Today, some service bureaus sell the whole page for that much, and nobody really cares about camera-ready repro anyway when the digital page is streamed directly to the imposed plate of a laser platemaker or to the xerographic drum of a high speed laser printer. The steady, high paying jobs and high profit businesses of those days are gone, replaced by a combination of low-paid freelances and in-house staff, low-margin service bureau operations, and poorly-defined "graphic solutions" companies who come and go.

The Internet is even worse. At least with DTP you have to send out for film, plates, printing and paper, and you could charge for the special knowledge and skills that resulted in a perfect press run. On the World Wide Web, thirty seconds after the customer has finished the page, it is published to 400 million potential readers with the click of a mouse. They don’t even need high res scans, 72 dpi works just fine, and they can change the copy as often as they like without paying a dime for reprinting.

Since 1995, hundreds of millions of pages have moved on-line: Time Warner alone has over 1 million pages on its web sites; Popular Mechanics has posted more than 10,000 on its site; and bookseller Amazon.com publishes a web catalog of over 4 million book titles without printing, paper or postage.

Who makes money here? Certainly not printers, there’s nothing to print. Web page designers who know how to layout a page in HTML are in demand, but there are few barriers to entry in web development and that kind of creative work usually doesn’t generate stable, high margin businesses. We heard from a web developer online who charges $5 per page for home pages, $3 per page for interior pages, and 50 cents per square inch for illustration art. Of course, he’s only 13 years old, but he had two successful business sites and had just signed several more. He was concerned because WYSIWYG web page software like Microsoft's FrontPage is likely to replace HTML coding and he’ll have to learn something more useful soon like Java scripting or virtual reality.

We all moaned and groaned in 1985 when Apple and Aldus let any graphic novice publish from the desktop, but for many, many people the do-it-yourself approach works. Now on the web, the biggest, smartest and richest computer company in the world is turning computer users on to universal web publishing. Microsoft’s Internet strategy envisions a day when every computer is on the net and every application program can share its data with the world. The gap between creator and reader that has been narrowing since 1985 will disappear for many by 2005 as the whole world goes on-line. Professional designers and artists will still have a role to play, but the competition from increasingly easy-to-use software and more compelling multimedia formats is likely to grow.

In fact, the hottest publishing designers are not typographers, illustrators or photographers at all, they are the programmers who create animated sequences, on-line shopping and ordering programs and virtual reality worlds. Every art director on earth knows how to make a hyperlink button on PhotoShop, but it’s hard to find somebody who can hack a server-side Perl script or write a video game in Macromedia Director.

Like bank tellers, airline ticket clerks, copy shop printers and gas station pump jockeys, graphic arts professionals are under the digital gun. For some people and some firms, there are no doubt some “upgrade strategies” that capitalize on special skills, long term customer relationships and unique markets. For others, the evolving markets may be just enough to get by until retirement. And for still others, it may be a time to take stock and to reassess career and company strategies. One thing is for sure: As long as things keep going as they are going now, the conventional graphic arts world of the future will be a very different, and not so profitable, place.\\

IN3 BOOKS

"Graphic Arts Business" at Amazon