McIlroy--New Year, New Media Trends
People like ordering certain products over the Web. If you know roughly what you want, and if the supplier has an excellent reputation, Web ordering seems very low-risk and completely convenient. Large corporations are saving huge amounts in their procurement budgets by automating ordering via the Web.
Of course it's worth noting that no printing company has made much of a dent in this area. Over one-third of Dell Computer's business now comes in via the Internet—I wonder what percentage of R.R. Donnelley's comes in this way. I hear you saying that the reason for this is that print is not a commodity product. And I can only answer, "That's correct"—and wonder who's going to do something about it.
The big news in 1997 was that several companies started making a real profit on digital printing. Obviously not all companies—probably not even most—but enough companies started succeeding that we could state that digital printing can be profitable.
But it's very hard work. I think the industry has now realized that there is no pent-up demand for customized printing, and not much enthusiasm for short runs generally. The direct print customers are developed slowly and painstakingly by innovative, imaginative and determined entrepreneurs. (The big printers, like R.R. Donnelley and Moore, have not been very successful to date in this market.)
I can't see any indication that this will change rapidly in 1998. It's not a price issue or a capacity issue. It's just a human issue—it takes a long time to educate people to do things differently.
The one thing that really could change the situation is if the vendors with the most at stake would enter into a meaningful cooperative relationship to develop the market. There's already something called PODI—the Print On-demand Initiative—but if it's been active, it's managed to be active in a silent kind of way. None of my colleagues or customers has heard a thing from PODI recently.