Posts Tagged ‘simon’

  • Geon today, gone tomorrow – Print21 Magazine article

    The long-running saga of Geon, once the biggest offset sheetfed printer in the region, is nearing its end. As the dust starts to settle after a tumultuous couple of months, Simon Enticknap looks back at the genesis of this ambitious project to reshape the industry and examines the fall-out from its collapse.

    The end, when it came, was quick. After eight years under private equity management, during which time many observers wondered how long it could survive, the final Geon death throes lasted just a matter of weeks.

    The company’s private equity backers, Gresham, finally walked away at the beginning of February when it handed control of the company over to KKR/Allegro private equity investors which had earlier acquired $80 million of Geon debt from Lloyds International. At first there was talk of restructuring and turning the business around but after less than a fortnight, the new owners had called in the receivers. Almost immediately, the dismantling of the Geon group began in earnest.

    First to go was the Christchurch-based Kiwi Labels business, which went to Blue Star NZ, itself recently returned from private equity ownership into the arms of former owner, Tom Sturgess. Then Geon’s NSW and Victorian operations went to Blue Star Australia under Geoff Selig who acquired the former Geon Banksmeadow and Parramatta sites in NSW, as well as its Mt. Waverley site in Victoria. These sites were immediately earmarked for closure with a “meaningful number” of Geon employees being offered positions at Blue Star.

    Tom Sturgess came back for more 10 days later when Blue Star Group NZ picked up the remaining Geon assets in New Zealand with 50 former Geon workers being offered positions at Blue Star; another 185 former staff missed out.

    By mid-March, Geon Perth was looking to go it alone by means of a management buy-out and then, a few days later, Geon’s Tasmanian assets reverted to their former identity, Mercury Walch, under the ownership of the Todisco family. That just left the Queensland operations which failed to find a buyer and were closed down, the Eagle Farm site quickly being listed for sale or lease.

    And that was that. Before you knew it, the waters had closed over Geon’s head and the region’s largest sheetfed printer was no more. All that remains is for those staff and suppliers left behind as the ship went down to see what they can salvage from the wreckage.

    The industry has seen some hard times in recent years – great companies gone, some of whom it was almost unfathomable to believe could go out of business – but perhaps nothing matches the trauma of the past couple of months.

    Pain and sorrow

    When news of the receivership first broke, the response from the industry was swift and unrelenting. No story on the Print21 website has ever generated so much impassioned comment. The level of industry-wide anger was palpable, mixed with a certain degree of schadenfreude and genuine sympathy for the many Geon workers facing an uncertain future.

    “Poor staff – it’s time these PE types go gamble with their own money. Total grubs! They burn lives, then just happily move on to the next job leaving destruction in their wake. They deserve punishment,” responded ‘Ink Farmer’.

    “Heart goes out to the employees and suppliers. This is a private equity chess move, in order to eliminate KKR’s obligations,” said ‘Rotten at the start’.

    “It was those in charge that are responsible and they should be made to pay… how many families are left pondering how they will pay next week’s mortgage or feed their kids,” added Loz.

    Others responded by reflecting on the changes wrought on the industry over the past decade. Theo Pettaras at Digitalpress, for example, paid tribute to the legacy of Geon’s predecessors:

    “Let’s at least take this opportunity to remember that Geon, previously known as Penfold Buscombe, was a printing company with a history in the printing industry dating back to 1865! Vicprint, Concord Corporate Communications, David J File Printers, Inkolour, Mockridge Bulmer, Prestige Plates, RT Kelly, Southport Printing, URI Printing, Pot Still Press and of course Websdale Printing were all well-known, respected printing companies that were included in the group’s portfolio of printing companies.

    “Those of us old enough to remember some of these companies would agree that they played a very important role in employing and training tens of thousands of people and making a significant contribution to the craft of printing.”

    Much of the criticism voiced was directed at the private equity owners and the management team which was widely perceived as having no understanding of how the print industry works. Special condemnation was reserved for Geon’s managers who jumped ship to positions with new owners while leaving employees to fend for themselves. The resulting sense of betrayal and outrage was white-hot.

    And whilst nobody seemed surprised at what had eventuated, many expressed a hope that Geon’s demise would see a return to sane pricing policies in the industry.

    “A current printer working in Perth, the prices have to rise because the way things stand at the minute everybody’s getting screwed. Quality at a decent price I reckon…” commented Buster.

    The disconnect

    Over the six years that Geon was in existence, there was always a strange disconnect between its public and private personae. Publicly, the announcements were all about building a ‘world class’ printing company with ‘sustainable’ manufacturing sites dotted around the country. Even as late in the game as last September, when the company was asking its staff to reduce labour costs, this was presented as part of its “commitment to building a sustainable business model for the future”.

    “Our focus is keeping Geon in the strongest position for the future,” said CEO Graham Morgan at the time. “We have reduced our debt significantly, reduced cost from the business across site mergers, reduced management layers, streamlined processes and now we are working with our employees on reducing the cost of labour through flexibility and open dialogue.”

    The talk was all about building a business for the ‘long-term’ based on the model of a nationwide, integrated production network. And there’s no doubt, too, that the company did produce some good work over the years, a testament to the skill and dedication of the staff it inherited from the various companies absorbed. It was a consistent winner at print competitions on both sides of the Tasman.

    Away from the public utterances though, it was always difficult to see how the company could survive under the burden of so much debt. It didn’t matter how successful it was, how much revenue it generated, how much quality print it produced or new customers it gained, it was never going to emerge from beneath the mountain of imposed debt. Something had to give; either the debt goes or the company does.

    For its part, Gresham had shown that while it was capable of producing successful turnarounds in some cases, it was also not afraid to close down businesses if necessary, as it did with boat builder, Riviera, which collapsed in 2009 with debts of over $300 million.

    The intervention of the GFC didn’t help. It’s a moot point as to how many of those businesses taken over by Pacific Print Group and then Geon would have survived one of the worst industry downturns in recent history. While they might have fared better, it’s hard to believe there would have been no casualties; plenty of well-known names have gone to the wall over the past few years. In the eyes of many people involved in the company though, the situation at Geon was compounded by bad management decisions and the loss of experienced talent and industry know-how at precisely the moment when it was needed most urgently.

    Some viewed this as evidence of the private equity financiers’ inability to understand what was unique and specific to running a printing business, what made it different to managing other manufacturing concerns. There may be some truth in that view but it presupposes that the goals of private equity are the same as most other enterprises, namely to build a ‘sustainable’ business, to earn money from making and selling things. That’s not necessarily the case.

    The collapse of Geon is not an indictment of the ‘failure’ of private equity because the business model it holds to is not the same as everybody else’s. Private equity plays by a different set of rules.

    The bust out

    There’s an episode of the TV series The Sopranos in which Tony Soprano and the gang take over a sporting goods store after the owner gets into debt with them. Not surprisingly, Tony has no intention of becoming a shopkeeper. Over the coming days and weeks, he and his cronies systematically strip the store like locusts, running up huge debts and selling off the stock at less than cost price (sound familiar?) until eventually the credit dries up.

    At one point, the exasperated store owner asks Tony what he’s doing, why he is deliberately running down a good business. “This is how a guy like me makes his living,” says Tony, referring to the old fable of the frog and the scorpion. “This is my bread and butter.”

    Finally, with the business on the point of collapse, the owner, drunk, desperate and suicidal, asks Tony Soprano how it will to end. “The end?” replies Tony. “It’s planned bankruptcy.”

    During the last US presidential election campaign, the Huffington Post made the same analogy between the modus operandi of private equity groups and Tony Soprano in reference to Republican candidate Mitt Romney’s history with private equity mob, Bain Capital. In the US, Bain has a reputation for buying up companies, loading them up with debt to extract higher dividends and then allowing them to go bankrupt. Romney’s attitude was exemplified by his opposition to any government bail-out of the US auto industry, commenting that “these companies need to go through a managed bankruptcy” as if going bankrupt is simply another form of re-branding.

    The point is that, for private equity investors, bankruptcy is not necessarily indicative of business failure; it is a strategy for getting rid of debt and cutting costs. At least Tony Soprano was capable of empathising with his victims.

    Sitting pretty

    In much the same vein, some of the commentary about the collapse of Geon has highlighted how much money has been lost by the private equity backers since Gresham bought out the former Pacific Print Group in 2005 and then upped the ante by buying Promentum for $127 million. How could they have been so misguided?

    It is true that Gresham Partners, the holding company behind Gresham Private Equity, did make a loss last year, perhaps the first since it was founded in 1985. It lost just a smidgin over $1 million. That was mainly because its fee income fell to $46 million over the year, down from $55 million the previous year. In fact, over the years while Geon floundered, the fees earned by Gresham Partners remained fairly consistent, reaching $64 million in 2009 in the wake of the GFC.

    Not all the fees earned by Gresham Partners come from its private equity operations and it is true that Gresham Private Equity has suffered bigger losses in recent years. For instance, last year, Wesfarmers, the giant conglomerate which owns Coles supermarkets as well as having a 50 per cent stake in Gresham Partners, recorded a loss of $55 million on its investment in Gresham Private Equity Funds due to “downward non-cash revaluations following a difficult year for some of the funds trading businesses”. That followed a $60 million loss on the same funds, also due to “downward non-cash revaluations” etc, in 2011, as well as another $57 million loss in 2009.

    Over the years, Wesfarmers has lost tens of millions of dollars from investing in Gresham Private Equity while continuing to inject funds into it. The division at Wesfarmers of which Gresham forms a part is the only one to consistently record negative earnings over the past few years. So why would a massively successful company such as Wesframers keep funding an apparent lame duck?

    Well, Wesfarmers itself made a profit after tax last year of over $2.1 billion, up 10.6 per cent on the previous year, so any losses it has sustained from Gresham Private Equity are flea bites in comparison. In effect, Wesfarmers has been bank-rolling Gresham’s private equity losses out of the huge profits it is making on its supermarkets and chain stores. Food for thought the next time you go shopping for cheap milk.

    Moreover, James Graham AM, founder and director of Gresham, who still has a controlling interest in the other half of Gresham Partners not owned by Wesfarmers, also sits on the board of Wesfarmers with a shareholding worth over $30 million. So the company of which he is a board member and shareholder is investing in and carrying losses sustained by the private equity arm of the company of which he is co-owner.

    All this is perfectly fine and dandy. There’s nothing untoward about it at all, so long as any potential conflicts of interest are made known. But it does give the lie to the notion that the principals associated with Gresham received a bloody nose with the collapse of Geon and were forced to retreat from the printing industry, tails between legs. Far from it. For the private equity fee-earners, it’s just business as usual.

    The biggest losers

    Inevitably where there are winners, there are losers too. The banks that provided the finance for the Geon roll-up –BOS/Lloyds International – were forced to sell off their debt at a massive discount so, in dollar terms, they are the biggest losers. Equally though, given that the Lloyds bank group is 40 per cent owned by the UK government following its £20 billion bail-out in 2008, the ultimate losers are the British taxpayers, a good example of ‘privatising the gains and socialising the losses’.

    Locally, there are hundreds of staff, many with years of service with Geon and its predecessors, who now find themselves out of work. They not only lost their jobs but also their entitlements, having to rely on the Federal Government GEERS scheme to pick up the pieces. They still won’t get their long service entitlements. Inevitably a lot of expertise will be lost to the industry for good. Likewise, there are hundreds of smaller creditors, not just the paper companies but also contractors and trade printers, who in all likelihood will see nothing for their labours and will be left to carry the burden of debt. The ripple effect throughout the industry will continue to be felt for some time to come.

    More generally, another casualty – at least for a while – is the notion of the ‘roll-up’. Back in 2006, when the private equity players were making their audacious bids to buy up printing companies like schoolboys collecting stamps, there was talk about how the future of the industry would belong to just a few mega-printers. Gordon Towell, former CEO of Geon, told Print21 in February 2008 that, in the future, “there will be only four major printing companies in the region”. With the benefit of hindsight such talk seems ludicrously far-fetched, but it is indicative of the prevailing mindset at the time. In many ways it was a response to the fragmentation of the industry and the ongoing problems of over-capacity.

    In the last issue of Print21, Andy McCourt gave a roll-call of all the printing companies that have disappeared due to private equity acquisition over the past few years. The current dismemberment of Geon’s remains may see some of these businesses resurrected, albeit in a different form, but it also sees the process of consolidation through to its logical conclusion. The end result is that there will be fewer sheetfed offset printing companies in the region from now on and the likelihood is that none will ever aspire to provide a networked nationwide footprint.

    It is true that many older print companies have gone but it is equally true that there are now a lot more new, re-fashioned companies, many employing technology that wasn’t even invented back when Gresham entered the fray. Indeed, as Andy McCourt points out in this issue (p65), there are many graphics-based businesses that are not even regarded as ‘printers’ as such, even though they are at the cutting edge of what printing technology today can achieve. The perception of what a ‘printer’ is lags behind the reality of the transformation that has taken place.

    In that light, the Geon experiment looks like a response to an industry-view that is already out-of-date – one based on large-scale manufacturing of sheetfed offset print – when in fact the industry has been heading a different direction altogether – digital, specialised, localised and service-based.

    There are lots of lines being drawn under the Geon business at the moment and perhaps collectively it’s time for the industry to do the same. Now that the big private equity players have departed the scene for the time being, everybody can get on with doing what they do best – making great printed communications and earning decent money for doing so.

    From a personal point of view, I’ll just be glad I never have to write that idiotic ‘G’ word ever again.

  • Game on for printing’s largest supplier – Print21 magazine feature

    The creation of the Canon Professional Print (CPP) division recasts the entire supply side of the printing industry in Australia and New Zealand. The amalgamation of Canon and Océ has produced a comprehensive industry supplier that addresses every level of the industry.

    In January, CPP’s inaugural director, Simon Wheeler, fronted the management cohort at the new company and spoke of his vision for the business as well as for the industry. This is an edited version of his presentation. 

    Canon Professional Print in Australia and New Zealand is the new division that addresses the markets where print is the business, or it is fundamental to the business. Our market breaks down into printing companies of one guise or another, corporate in-plants that are in effect internal print businesses and architect, construction, engineering companies where technical drawings are fundamental to the business.

    Today I’d like to explain to everyone what Canon Professional Print, CPP, is, why do we exist, who are our customers, what will we achieve and what strategies will we employ. I will lay out how we will profitably double our revenues in three years, through a strategy of extreme client intimacy. By the end of this speech I want you to believe this can be achieved and come with us on the journey. We need your support.

    So the first place to start is to explain where CPP has come from. It is an amalgamation of the majority of Océ, excluding its office business and the major parts of the PPS, LFP and DreamLabo businesses. Summarising last year, the sales of new equipment in the year proved difficult due to market conditions. Despite this the Océ Australia profit level was held at the 2011 position by the stable service results and the strong control of costs.

    What Canon Professional Print is all about – CPP’s first director, Simon Wheeler.

    The production print team also had a great year, with revenues 10 per cent up on 2011 and a strong profit improvement. They installed 15 colour ImagePresses, 60 per cent of which were new business. Large format grew all aspects of the business performance in 2012, revenue, profit and market share. This was achieved in a declining market, so well done!

    The DreamLabo team installed the first DreamLabo 5000 in the world at Pictureworks in Melbourne. After a problematic start the customer enjoyed a largely downtime free pre-Xmas period, when the machine was running up to 21 hours a day. Over 20 per cent of Pictureworks orders now coming from photo-books made on the DreamLabo.

    We are now through the integration challenges, we are lean and we are poised for growth. Sincere thanks to everyone who helped us through the integration.

    A new era

    Now let’s look forward. It is rare that something as significant as the birth of CPP happens in the print industry. It is big news. I am really excited about the possibilities open to us in the new era.

    So, let’s talk about print. Contrary to popular opinion print isn’t dead. Print is important. It inspires, persuades and records. It touches our lives constantly and we are much richer for it. Sure, some printing is unnecessary. If print is part of a workflow process that can be digitised then new technologies are replacing it. Who here has opted out of receiving bills? Who here uses a chequebook anymore? And we’ve all heard of the paperless office predictions.

    However if print inspires, persuades and records, it has more value than ever. Impact is everything. Our solutions are used by people that care about print, people that are proud about their print.

    Whether it’s sign-writer printing banners for Grand Final day on a Canon Arizona; a book printer printing the book that you or I ordered on Amazon yesterday on a Canon ColourStream; a university printery printing examination papers ready for panicking undergraduates on a Canon Varioprint; a family printer manufacturing point of sale marketing material for Myers on a Canon ImagePress; an engineer designing a new hospital with the help of a Canon Colourwave or a photography printer recording a bride’s memories of her wedding day with a digital photo book; they all care about print. CPP is a place for people that care about print as much as our customers.

    So this is the why of CPP. Canon digital print has the power to create new ways for printing businesses to achieve more than ever thought possible for customers. That’s why we do what we do. That’s why we get up in the morning.

    Market size and growth

    So let’s look forward. As I mentioned earlier, I believe we can double our revenues in three years. Let me explain how.

    Let’s talk about our customers, they are what counts. Without them we do not exist. There are 5,795 printers in Australia with combined revenues of $8.6bn. The top five; PMP, IPMG, Blue Star, GEON and OPUS only account for 18.9 per cent of the total, so it is a very fragmented industry. The vast majority of printing companies are privately owned sub-$10M turnover businesses, competing in tough markets. Many are family run and they rely on their relationships with customers and suppliers like Canon to make money. Our wide format architect, engineer and construction customers are also relatively small companies where technical drawings are fundamental to their business, so the strategy of client intimacy equally applies.

    The over-arching theme in the industry is change. Some print is in decline, some is growing, but just about every sector is seeing a growth in digital print technology. Digital print has grown to account for 8 per cent of the total volume of print in Australia, but this is set to grow markedly.

    Many printers tell me they will never buy a non-digital press again.

    Digital is coming of age and Canon is poised to be one of the key new industry leaders.  So there is an opportunity for us to build a renaissance in print. It is a new craft, with new profit opportunities. It is changing and there are new players and new technologies. We are poised for growth.

    The growth is not going to be easy. It is a hyper competitive market and in the digital press space we are number three behind Xerox and HP. We need to be number two in 2014 and number one in 2015 if we are to double our revenues.

    Enhancing Competitive Advantage

    So what’s the plan? For us, in CPP, growth will come from moving our market position to one of extreme client intimacy. We already have a client intimate approach, but we must now make this approach systemic in CPP. I’ll explain what that means later.

    Our success will come from our customer’s success, our growth from their growth. Our relationships with them are always either win-win or lose-lose, never a combination. We will grow by step increasing our revenues with enterprises we already know:

    Everything we do must make us more client intimate. Every decision we make must be viewed through the filter of does this make us more client intimate as a team? We must be trust-worthy and, importantly, we must learn who in the industry to trust. Trust is the key to any relationship. We must be constant in living the Canon values, particularly Integrity and Togetherness.

    We had three of customers at our kick off to tell us what client intimacy means to them. They were Bruce Peddlesden, managing director of On-Demand, the biggest digital printer in Australia, Frank Veltman, managing director of the largest Job printer in Australia and Andrew Smith, managing director of PictureWorks, the world’s first DreamLabo customer.  What they told us is that too often suppliers tell them what they can do with one of their machines. The suppliers they deal with ask them what do they want to do and is there any way they can help, regardless of whether there is a sale in it or not. The orders then will happen when they have the need. The selling is still tough, but being trusted is the license to be considered.

     Our cultural identity

    We will make client intimacy our cultural identity in CPP. We will shift emphasis from a position of customer intimacy based on product centricity to one based on market centricity, from trusted market follower to trusted market leader, from solutions supplier to trusted income generator consultants for our clients.

    I am announcing three strategic change initiatives today that are the key to our drive to achieve the transition to client intimacy:

    People over process, not process over people. Put simply, process is critical, but only when it supports our people to become more client intimate and help customers grow their businesses.

    Solutions to Services. This is about building Canon Print Management CPM. For those in North Ryde you will see an example of this as we will deliver this service to Canon via the ATC. We are now offering full print, print brokering, graphic design, creative and mailing services internally to mirror our offer to customers. We recognise we are in a competitive market with external suppliers, that’s healthy

    Finally, experts to networks. We will build on our technical and application expertise to become highly networked in the print industry. We will know and understand our customer’s customers, their partners in the trade and be at heart of the printing industry networks.

    We will be creating action plans for each of these initiatives and it will impact our whole business; systems, bonus plans, training, policies and financial reporting. These initiatives will deliver growth. And let me be clear, to be able to focus on the initiatives there will be some areas we will have to place less emphasis on. Bluntly if there is no link to growth through client intimacy we will only apply the required effort.

    So we bring all these ideas together in one coordinated message for the market. We let our customers know that we get it. We know they are unique and proud of their print business:

    • That they stand apart from their competition.

    • That we are proud to work with them.

    • That we know they are experts and we respect them.

    • That we will drive our growth through client intimacy.

  • Photobooks make a pretty picture for Christmas – Print21 Magazine feature

    ‘Twas the night before Christmas and all through the land, photobook printers were frantically fulfilling the last minute rush of orders from their customers. Well, that’s not exactly true but there’s no doubt this is the busy season for photobook purchases as everybody searches for that special, one-off gift. It comes at the end of an amazing year for this burgeoning print market, one in which it has garnered some impressive accolades. Simon Enticknap reports on a unique print product.

    It’s not exactly Santa and his elves in the Christmas grotto but, you know, it’s probably the closest the printing industry gets to it. At the Momento production facility in Sydney, it is all hands on deck in the lead-up to Christmas as last-minute photobookers submit their orders as eagerly as children sending wishlists to the North Pole. This is traditionally the busy season for photobook purchases, certainly in the retail market, and that means that, for one section of the printing industry at least, the presses will be running flat-out until the cut-off date for guaranteed deliveries (I’d like to say that’s the night before Christmas but, realistically, that’s not possible even with today’s turnaround times).

    The first eye-opener on visiting the Momento offices is that it really is a hands-on operation. In an age of computerised inline spectrophotometric colour quality control, it might come as a surprise to learn that every single print produced by Momento is individually checked by a real, living, breathing human being wearing soft, white cotton gloves, painstakingly poring over the pages. If any page doesn’t come up to scratch, it gets re-done. That in itself is a measure of just how seriously quality is regarded at the company, which is certainly reassuring given what they are handling – nothing less than people’s memories.

    Much of the finishing process too – the hard cover binding in a range of materials – is also done by hand, not just for quality purposes but also because the variety of finishing options offered by Momento doesn’t easily lend itself to automation. Again, it’s an odd sight in an industry where the dominant modus operandi in recent years has been to eliminate people from the production process; too many hands make for slow work, inefficient work, expensive work. Real people are not as ‘lean’ as the current manufacturing dictum requires.

    Do you see the irony here? In this instance, digital print output which, for so long, has been accused of causing the ongoing de-skilling of the industry is in fact re-inventing the ‘craft’ of print. OK I can hear the grinding of teeth from certain offset print sections of the industry but the fact is that the modern photobook, digitally-produced, is a work of great skill and ranks among the finest examples of print available today.

    The break-through winner at this year’s Galley Club awards produced by Momento, Postcards from Home by photographer Sam Harris (© Sam Harris).

    Seismic shifts

    In the case of Momento, the results speak for themselves. For the past couple of years, the company has been consistently winning awards for the quality of its work and not just because it is one of the country’s fast-growing companies. It has steadily accumulated a wall-full of golds in the NSW PICAs as well as consecutive golds and sponsor awards at the last two National Print Awards.

    It’s a similar story in Victoria where Michael Warshall of fellow photobook printer, Picpress, has worn a groove in the carpet on his way to collecting a swag of awards at the Victorian PICAs in recent years, as well as winning a top gong at the last three National Print Awards. These two friendly rivals are set to renew their battle for top honours at the next year’s NPA ceremony having both picked up gold awards at their recent respective state-based PICAs. Between the two of them, they have helped to redefine how digital print and short-run books are produced and perceived.

    Two recent wins for Momento are especially significant – the Australian Book of the Year and the overall Book of the Year awards at the recent Galley Club Awards. This was the first time that the company had entered the awards, going up against the big guys of book publishing, the people who have been doing it for eons, and so to win both the top awards was certainly pretty spectacular. It was also the first time an Australian-made book had won the Book of the Year award and, just as remarkably, the first digitally-printed book to do so. These are ‘momento-us’ shifts indeed.

    Results such as these must be especially satisfying for those people in the industry who, over the past decade or so, have been advocating how short-run digital print can enable local printers to compete with and out-do competition from overseas. At times like these, it is possible to see how the market is changing, not just in terms of the technology used but also the means by which content is generated; the intersection between the digital environment and niche, self-funded publishing is a new dynamic for print producers.

    Not for all printers

    The photobook market is one that has been identified for a number of years now as a growth sector for printers. At any printing trade show these days, it is possible to see photobook samples produced on a range of digital presses and, increasingly, a variety of automated equipment for gluing and binding the finished books. There are opportunities to be had, we are told, for those prepared to have a go.

    What’s interesting though is the number of current photobook companies that come from a non-printing environment. Geoff Hunt and Libby Jeffery, co-founders of Momento, have a background in digital media and publishing; in the early days of the business, the print component was actually out-sourced before the company moved production in-house when it acquired its own Indigo press. Michael Warshall is a portrait photographer (or, as he puts it, “I document people’s existence in life”) and Picpress itself is an off-shoot of Nulab, an well-known professional photolab service (Warshall recalls collecting his first PICA award and not knowing anyone in the room; “What are you doing here?” he was asked, to which he replied, “Diversifying”). Similarly, Photo Create, the photo-gifting wholesale supplier based in Glen Innes in NSW and one of the biggest digital printers in the country, is part of the Eastmon Group that pioneered digital photo-processing in Australia with the development of retail kiosks.

    Photobooks may be a growth print market but it’s not necessarily the print industry that is driving this growth. Rather its emergence derives from a convergence of different digital technologies in photography, digital media, imaging software – as well as print.

    The photobook market is different in other ways too. For instance, unless you are printing and supplying wholesale product to other retailers, it is primarily a retail market that involves selling print to people who would otherwise probably never buy it directly. Unlike the business of selling print to other businesses, large and small, this creates its own customer service demands.

    Geoff Hunt highlights customer service as a key area in which Momento works hard to differentiate itself from other suppliers. It employs dedicated staff whose task it is to liaise directly with customers, both retail and professional, to help them through the ticklish task of managing files and layouts and image quality. Even with professional photographers – perhaps more so – there is an expectation of a high level of attention to detail. Picpress, for instance, offers three levels of customer support – one for professionals and agencies, another for prosumers/consumers, and then there’s the ‘grandmother’ level where the purchaser knows nothing and it has to be very, very simple.

    In the main, photobook printers are dealing with customers with a print run of one. They may only order print once or twice a year and it has to be perfect every time. If you’re not set up to manage that type of market expectation – and many printers are not – then it might be a hard row to hoe. Customer service is the reason Hunt gives as to why some printers enter the photobook market and quickly discover that it’s not to their taste, not realising how much time they have to spend with customers in order to make it work.

    Software is the key

    Another characteristic of this market is that the print component is, to some extent, the least important. What really matters is the software that drives the whole process.

    For instance, while the post-print production at Momento is largely manual-based, it’s the total opposite at the start of the process. From the moment that the customer uploads their files for printing to when the sheets are fed into the HP Indigo 7500 press, it is a completely automated process. There is no prepress to speak of and no proofing – the files go straight to the press – and so the first time that anybody gets to see the jobs being done is when they are actually printed (for retail customers anyway, professional photographers get more guidance).

    This is mainly due to the sophistication of the Momento software which is downloaded and installed on the customers’ computers. I’ve used this software a couple of times to make photobooks and it is certainly a very flexible, intuitive layout tool. For anybody thinking about implementing a web-to-print solution, it is well-worth checking out as an example of how easy a client layout tool should be, and not just for photobooks. Michael Warshall agrees that the key is the software. “It all starts with how the customer delivers the work to you. It has to be simple and intuitive, drag-and-drop, otherwise they can get frustrated.”

    This applies just as much to professional photographers, particularly the new generation who have the latest DSLR cameras capable of taking great photos but who don’t want to learn the complexities of an editing program. Hence the need to be constantly working to improve the front-end interface. The latest version from the Picpress consumer site called NuShots <> is all web-based so consumers don’t have to download large files to install but can do everything online. Apps and tablet versions are the next stage in the wake of the shift away from PC-based computing.

    Geoff Hunt talks about the “Holy Grail” of photobook software whereby it should be possible to just “throw a whole bunch of photographs” at the software and have it automatically create a beautiful, high quality, professional-looking photobook. There are some people who will always want to do that themselves and for whom the creative process of putting together a photobook is as important as the final result. Equally though, there are many other potential customers who would prefer to have it all done for them seamlessly and quickly. Most photobook packages already include design templates and themes to help users quickly create finished book but Hunt envisages this could go a lot further.

    Further education

    The easier it becomes for customers to make their photobook then the more likely they will be to do it and, by all accounts, there are plenty of people out there who are yet to do so. Warshall cites figures from the Photo Marketing Association which suggest that currently only about 7 per cent of local consumers know what a photobook is. That compares to Germany, for instance, where 25 per cent of consumers buy photobooks. That’s a lot of upside to the local market, but it also suggests that there is a lot to do in order to build public awareness.

    Certainly, Momento has worked hard over the past few years to encourage this awareness. It sponsors a number of awards and promotes its own competition, and it has a Momento shop were customers can sell their self-published work, much in the same way as Blurb or Lulu except with a local inflection and a focus on photography. These are all great ways of building a community and helping to foster a visual culture.

    Michael Warshall makes the point that there has been fundamental shift in photography whereby, today, most pictures are no longer printed. People don’t realise though that their digital files are not permanent – they can be erased, file formats change, disks get corrupted. Even printed photographs can quickly fade. Hence the need to educate people about the need to preserve their images not just on disk but also in high quality printed books.

    “People don’t understand. Nothing digital is permanent. Nothing,” he says.

    There are many photobook customers who will always shop around for the best price, as in any market, and there are plenty of outlets prepared to court them, offering big discounts and low prices. The quality is fine although there is probably less choice in terms of different formats and finishes. The likes of Momento and Picpress though offer a different service with an emphasis on high quality and a range of formats, stocks and bindings. They acknowledge they are more expensive than the mass market products but their customers are prepared to pay extra for a premium product.

    Photobooks at this end of the market are not cheap and they are not for everyday consumption but, for those special occasions, nothing beats getting a beautiful, permanent, one-off print item hand-made and delivered to your door. Not quite made by elves and brought by Santa but perhaps the next best thing.