Dr Joe Graph Expo091107


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Dr Joe Graph Expo091107

  1. 1. Presented by: Dr. Joseph Webb, Director WhatTheyThink.com Economics & Research Center Graph Expo, Chicago September 11, 2007 Graphic Arts 2017: A Speculative Look Ten Years from Today
  2. 2. Agenda <ul><li>A look at the economy and commercial print </li></ul><ul><li>Graphic Arts 2017 </li></ul><ul><li>The 9:40 Pause </li></ul><ul><li>Questions and Answers </li></ul><ul><li>before we begin… </li></ul>
  3. 3. Audio Chart of the Week - FREE <ul><li>Chart of Industry Trend or Topic </li></ul><ul><ul><li>Weekly </li></ul></ul><ul><ul><li>3 to 6 minutes </li></ul></ul><ul><ul><li>Wide range of topics from content creation and technology to end-use markets and more </li></ul></ul><ul><li>Use the chart in internal presentations </li></ul>
  4. 4. Management, Marketing, and Economic Notes - FREE <ul><li>“ Blog”-like comments about latest news </li></ul><ul><ul><li>A lot happens between weekly columns </li></ul></ul><ul><ul><li>Sometimes I just vent </li></ul></ul><ul><li>“ Road Warrior” </li></ul><ul><ul><li>Comments and recommendations about personal computing and communications technologies </li></ul></ul>
  5. 5. Economics & Research Center - FREE <ul><li>ERC Industry Snapshot </li></ul><ul><ul><li>Updated just hours after new industry data are published </li></ul></ul><ul><li>Data </li></ul><ul><ul><li>Shipments, capacity </li></ul></ul><ul><ul><li>Imports/exports </li></ul></ul><ul><ul><li>Employment </li></ul></ul><ul><ul><li>Postal weights and pieces </li></ul></ul><ul><li>Markets </li></ul><ul><ul><li>Content creation & printing </li></ul></ul><ul><ul><li>Paper </li></ul></ul><ul><ul><li>US & Canada </li></ul></ul>
  6. 6. Wednesday, September 26 Webinar <ul><li>The economy and the subprime aftermath </li></ul><ul><li>Forecast for Q4-07, 2008, and 2009 </li></ul><ul><li>Hot and cold: trends that are, and aren’t, driving the business </li></ul><ul><li>What we know isn't so: a look at industry common wisdom. Is it still wise? </li></ul><ul><li>.... and Dr Joe's Fall Reading List </li></ul><ul><li>Signup online at WhatTheyThink.com </li></ul>
  7. 7. The Economy & the Outlook for Print
  8. 8. The Overall Economy <ul><li>Real GDP Y/Y basis </li></ul><ul><ul><li>Q1-06: 3.31% </li></ul></ul><ul><ul><li>Q2-06: 3.23% </li></ul></ul><ul><ul><li>Q3-06: 2.37% </li></ul></ul><ul><ul><li>Q4-06: 2.60% </li></ul></ul><ul><ul><li>Q1-07: 1.55% </li></ul></ul><ul><ul><li>Q2-07: 1.92% </li></ul></ul>
  9. 9. Economic Conditions <ul><li>“ Subprime” fallout </li></ul><ul><ul><li>Froth is out of credit markets </li></ul></ul><ul><ul><li>Discipline to lending? </li></ul></ul><ul><ul><li>Housing stimulus to economy disappears for minimum of 18 months, possibly more </li></ul></ul><ul><ul><li>Budget cuts in financial institutions </li></ul></ul><ul><ul><ul><li>Search for cost savings </li></ul></ul></ul><ul><li>Future inflation worries ease </li></ul><ul><li>No recession </li></ul><ul><ul><li>No significant growth, either </li></ul></ul><ul><li>Business investment cools </li></ul><ul><li>Overseas markets strong over long term, always volatile </li></ul><ul><li>Future tax rates still uncertain </li></ul><ul><li>Fed is about to ease (9/18) </li></ul>
  10. 10. Employment in Key Segments
  11. 11. Do Commodity Prices Matter? 1967 CPI = 624 494.6 917.9
  12. 12. Commerce Department has Updated Printing Shipments Data from 2003-2007
  13. 14. Old Habits Die Hard: Stop Looking for GDP as Indicator of Printing Shipments
  14. 15. Updated Print Forecasts <ul><li>Conservative model: </li></ul><ul><ul><li>2007: $103.1B </li></ul></ul><ul><ul><li>2008: $102.1B </li></ul></ul><ul><ul><li>2009: $101.2B </li></ul></ul><ul><li>Aggressive model: </li></ul><ul><ul><li>2007: $96.8B </li></ul></ul><ul><ul><li>2008: $87.6B </li></ul></ul><ul><ul><li>2009: $80.8B </li></ul></ul><ul><li>GDP model using +2.5% GDP growth rate): </li></ul><ul><ul><li>2007: $101.1B </li></ul></ul><ul><ul><li>2008: $99.0B </li></ul></ul><ul><ul><li>2009: $96.8B </li></ul></ul><ul><li>WTT 2007 ERC forecast </li></ul><ul><ul><li>$102.0B, -$1.5B, -1.5% </li></ul></ul><ul><ul><li>Likely to be revised down </li></ul></ul><ul><ul><li>No political campaign bump </li></ul></ul><ul><ul><li>Slower growth of direct mail and direct marketing </li></ul></ul><ul><li>2008: $102B </li></ul><ul><ul><li>The “last” print campaign? </li></ul></ul><ul><li>2009: $ 99B </li></ul>
  15. 16. Encouraging Profits Report for Q2-07 It’s Not What You Make It’s What You Keep
  16. 17. Graphic Arts 2017 … Finally!
  17. 18. Agenda: 2017 <ul><li>Economic, demographic, technological trends that will create the graphic arts and content creation business </li></ul><ul><li>How many printers? workers? designers? publishers? </li></ul><ul><li>What communications needs will emerge, grow, decline? </li></ul><ul><li>Where will jobs and opportunities be? </li></ul><ul><li>Getting ready </li></ul>
  18. 19. Advertising Age: Lies, Damned Lies and Ad Predictions <ul><li>As any media researcher will tell you, the concept of using benchmark reports and forecasts is intended to serve as less of a crystal ball and more of a hype-driver for emerging technologies and market trends. </li></ul><ul><ul><li>Sept. 3, 2007 issue </li></ul></ul>
  19. 20. Steve Forbert: Sounds Like an Executive ? <ul><li>I don't wanna see no fortune teller, </li></ul><ul><li>I'd rather do without prediction </li></ul><ul><li>I'll see it when it's all around me, </li></ul><ul><li>Hey, what's the hurry? </li></ul><ul><li>Sweet Love that You Give </li></ul><ul><li>Jackrabbit Slim, October 1979 </li></ul>
  20. 21. Forecasting is not very difficult, because it’s about the future <ul><li>Forecasting long-term and very short term are easy </li></ul><ul><li>Timing is always the most difficult to predict; underlying trends are usually right </li></ul><ul><li>Easy to forget that all actions have reactions </li></ul><ul><ul><li>Those penalized by change have a habit of adapting to new situations </li></ul></ul><ul><li>Not all things can be foreseen; but context can </li></ul><ul><li>Change is residue of thousands and millions of daily buyer-seller decisions, not the acts of a single company or even a single industry </li></ul><ul><li>Just because it is possible does not mean it is marketable </li></ul>
  21. 22. Why Forecasting with Quantitative Models Alone Can Be Dangerous <ul><li>Pink line: Forecast based on actual data ending in 2000 </li></ul><ul><li>Blue line: what actually happened </li></ul>
  22. 23. The Best Forecasts are Always Judgmental <ul><li>Statistical forecasts or forecast models are springboards for discussion </li></ul><ul><li>Remember, this is “a speculative look” </li></ul><ul><li>Almost anything can be justified by a consultant with a good vocabulary </li></ul>
  23. 24. Economic trends <ul><li>U.S. government policies that constrict long term growth and wealth creation seem certain post-2008 election, leading to slow growth economy, stagnant business investment </li></ul><ul><li>Developing countries, even “old Europe” decreasing taxes, especially corporate rates </li></ul><ul><li>Communications reduce “friction” between economies, increasing transactions, putting new emphasis on logistics and transportation </li></ul><ul><li>Emerging economies significantly increasing wealth beyond their natural resources </li></ul><ul><ul><li>More sophisticated monetary systems </li></ul></ul><ul><ul><li>Increase in service economies </li></ul></ul><ul><li>Economic and monetary policy influence of U.S. and Europe ebbs </li></ul>
  24. 25. Technological Trends <ul><li>Rampant connectivity at declining costs </li></ul><ul><li>Richer communications, with more video </li></ul><ul><li>Mobility is habit-forming </li></ul><ul><ul><li>Supercomputers in one’s hand, and nobody knows it </li></ul></ul><ul><li>Storage becomes “free” </li></ul><ul><li>Instant access to information and content, anywhere, anytime, anybody, any format, with printing optional </li></ul><ul><li>E-commerce a normal course of business for everything </li></ul>
  25. 26. Considerations <ul><li>Technology and adoption do not move in lockstep </li></ul><ul><ul><li>More alternatives chase same resources, solve same problems </li></ul></ul><ul><li>Technology and profits are rarely simultaneous </li></ul><ul><li>All technologies are two-sided </li></ul><ul><ul><li>Internet competes with print </li></ul></ul><ul><ul><li>Creates and expands opportunities for print businesses </li></ul></ul>
  26. 27. U.S. Population Trends Source: U.S. Census Bureau
  27. 28. Content Creation Markets
  28. 29. Technologies Re-Shape Publishing
  29. 30. Publishing’s Future <ul><li>Monetization of content remains a serious issue </li></ul><ul><ul><li>Critical beyond publishing; content needs to create value </li></ul></ul><ul><li>Contrary to popular belief, the Internet has limited space </li></ul><ul><ul><li>“ Shelf space” is part of the Internet, too </li></ul></ul><ul><li>Small publishing grows and grows and grows </li></ul><ul><li>Redefinition of publishing as a business </li></ul><ul><ul><li>Severe downsizing of infrastructure </li></ul></ul>
  30. 31. Is This Too Optimistic for Newspapers? <ul><li>Monetizing content remains mysterious and unpredictable </li></ul><ul><li>Newspapers become magazines; magazines become newspapers </li></ul><ul><li>The “deadline” or “press time” grows meaningless </li></ul>
  31. 32. Where Have All the Printers Gone? <ul><li>On-demand printing is a weak competitor to computer screens </li></ul><ul><li>Mobile computing of all types continues to reduce reliance on print </li></ul><ul><li>Are there really opportunities in non-print media? </li></ul><ul><li>Digital printing has market value because of its inherent integration with communications and information storage and transmission </li></ul>
  32. 33. Evolving Nature of Business <ul><li>Globalness for more aspects of business, even the smallest </li></ul><ul><ul><li>“ Digital proximity” </li></ul></ul><ul><li>Production is still becoming global, creation and content has not; that will change </li></ul><ul><li>Increase in global specialization of labor, capital and ideas </li></ul><ul><ul><li>Interconnectedness becomes more evident </li></ul></ul>
  33. 34. Rising Global Wealth Effects <ul><li>Decreased birth rates </li></ul><ul><li>Increased interest in environmental issues </li></ul><ul><li>Longer & healthier lifespans </li></ul><ul><li>Increases in services compared to manufacturing </li></ul><ul><li>Increasing demands for information, of greater variety and wider means of access </li></ul>
  34. 35. What communications needs will emerge, grow, decline? <ul><li>“ Managing” content is not the issue; deploying content is </li></ul><ul><li>Reaching desired targets is not as important as having targets find the content </li></ul><ul><ul><li>Search is a natural way of finding information now </li></ul></ul><ul><ul><li>Social networking “fad” will pass; easy to confuse the tool with a centuries old trend to associate with others of similar nature </li></ul></ul><ul><ul><li>New trend: lifelong social communications? – “digital neighbors” </li></ul></ul><ul><li>Bewildering number of access devices is not a call for standardization, but a bewildering number of standards </li></ul><ul><ul><li>iPhone is culmination of past events, a new building block </li></ul></ul>
  35. 36. Where will jobs and opportunities be? <ul><li>Decrease in sales jobs now evident in economic data </li></ul><ul><li>“Internationalizing” content and deployment </li></ul><ul><li>Content creation with new tools, in new formats, in new markets: “newness” is always a market-changing trend </li></ul><ul><li>Specialization in multiple media applications, implementation and deployment </li></ul>
  36. 37. Getting ready <ul><li>Create and encourage curiosity </li></ul><ul><li>Play in the new communications and new media </li></ul><ul><ul><li>Be the gadget guru for others </li></ul></ul><ul><ul><li>It’s only cool if you can create unforeseen uses </li></ul></ul><ul><li>Media rules are being re-written every day </li></ul><ul><ul><li>The Geico-ization of media strategy </li></ul></ul><ul><li>Rules may change, but the objectives do not </li></ul><ul><ul><li>Long-term profitability and innovation never go out of style </li></ul></ul>
  37. 38. THANK YOU! Questions?
  38. 39. In Search of Dr. Joe… and others… <ul><li>WhatTheyThink.com </li></ul><ul><ul><li>“ Mondays with Dr. Joe” </li></ul></ul><ul><ul><li>Economics & Research Center (ERC) </li></ul></ul><ul><ul><li>ERC Notes </li></ul></ul><ul><ul><li>ERC Industry Snapshot </li></ul></ul><ul><li>PrintCEOBlog.com </li></ul><ul><li>Economic and other webinars </li></ul>