T

H
E

T
R
A
N
S
F
O
R
M
E
D

G
R
A
P
H
I
C
S

S
U
P
P
L
Y

C
H
A
I
N






J
U
N
E

2
0
0
9
W
H
E
R
E

N
E
X
T

F
O
R

I
N
D
I
A
N

P
R
E
-
P
R
E
S
S
?
1
dj@intermediaglobal.com
MEDIA & COMMUNICATIONS INDUSTRY THOUGHT LEADERSHIP
DHANAN)AY BALUDI June 2009 (Rev/ July 2011)
MEDIA & COMMUNICATIONS INDUSTRY THOUGHT LEADERSHIP
Tb Transformd
Crapbics Supply Cbain
Wbr Nxt For
Indian Pr-prss?
Copyrights Intermedia Global, 2009
Intermedia
Global
Powering b2b Markeng
T
H
E

T
R
A
N
S
F
O
R
M
E
D

G
R
A
P
H
I
C
S

S
U
P
P
L
Y

C
H
A
I
N








J
U
N
E

2
0
0
9
W
H
E
R
E

N
E
X
T

F
O
R

I
N
D
I
A
N

P
R
E
-
P
R
E
S
S
?
dj@intermediaglobal.com
2
MEDIA & COMMUNICATIONS INDUSTRY THOUGHT LEADERSHIP
AUTHURS NUTE:
The Graphics Supply Chain includes all businesses involved in the creation, production and implementation
of visual graphic communications in the print and electronic media as well as all enabling businesses such
as technology, consulting and logistics that help in the automation of processes and exchange of data across
the supply chain.
Tb Transformd Crapbics Supply Cbain series of though leadership articles aim to capture the
sweeping changes across the media and communications industry. Further, they seek to analyze the
viability of traditional business models in this changing industry landscape and propose new thinking.
While these articles look at the Indian context, most trends and insights closely shadow what is happening
in the global industry.
Wbr Nxt for Indian Pr-prss analyses one such traditional business in the supply chain - the
pre-press tradeshop and seeks answers to questions like why the tradeshop is threatened with extinction.
What strategies are Indian tradeshops applying to re-invent and survive? And do they stand a chance?
Your opinions are welcome.
DHANANJAY BALODI
dj@intermediaglobal.com
T: +91 (0) 98923 23661
www.intermediaglobal.com
AUTHUR BIUCRAPHY:
Dbananjay Balodi (DJ) is a Mumbai, India based consultant and entrepreneur
with over a decade of experience in the media, publishing and graphic arts
market. Over a 19 year career, DJ has successfully built two start-up BPO
businesses in the graphic arts space, launched and edited a popular German
magazine title in the Indian market, designed and launched b2b
e-Commerce services at Satyam Wbxcbang (part of a Top 4 IT services
major) and has led the design and development of a collaborative publishing
workflow system.
DJ is Founder at Intermedia Global a marketing and premedia KPO consulting firm and an
Esko Artwork consulting partner. He is currently involved in the development & rollout of a new
global media services strategy for Eastman Kodak Co. DJ has also been consulting for several
premedia & marketing services businesses from the UK, Europe, Australia and North America
interested in the India opportunity.
Earlier, DJ was Managing Partnr in a joint venture with Indias largest prepress company
where he led the business eforts at transitioning into a prmdia KPU supplier for the global
packaging, marcoms and magazine publishing markets. In October 2008, DJ was invited to be
panelist at the US FTAAs (Flexographic Technical Trade Association) annual conference to speak
on Prmdia Uffsboring for the packaging graphics market.
DJ can be reached on email (dj@intermediaglobal.com) or on cell phone at +91 98923 23661.
Cover photo sourced from photolibrary.com
T
H
E

T
R
A
N
S
F
O
R
M
E
D

G
R
A
P
H
I
C
S

S
U
P
P
L
Y

C
H
A
I
N






J
U
N
E

2
0
0
9
W
H
E
R
E

N
E
X
T

F
O
R

I
N
D
I
A
N

P
R
E
-
P
R
E
S
S
?
3
dj@intermediaglobal.com
MEDIA & COMMUNICATIONS INDUSTRY THOUGHT LEADERSHIP
argantuan changes are sweeping the media and communications
industry landscape. At a fundamental level, this change is in the form
of what constitutes the definition of media. Print which had until
the early 1990s stood its ground as medias de-facto definition, gave
way to television (electronic media) as the emerging medium for
mass communications. The re-emergence of radio a little later, further
altered the landscape shrinking prints share of the communications
pie. While Indian newspaper advertising continues to grow at a
healthy 17% YoY since 2005 and still is the number one media of
choice for advertisers, TV (16.75%) and Radio (39%) combined have
emerged as a close second **.
To add to prints woes, the post dot com era of the mid 2000s has rapidly driven
new wedges into the print-centric advertising pie garnering a growing foothold for
electronic/new media in the communications budgets of mass advertisers. This
new media emergence is both swift and telling. Swift because of the sheer nature
of technologys rapidly growing sophistication and telling because it is challenging
popular notions of marketing, communications and brand building. More
significantly, new media is already questioning the traditional agencys capabilities,
thinking and influence over the marketers communications budgets.
Crapbic Arts: An Industry in Transition
While the changing media landscape print to electronic - is obvious because we
see and experience it as consumers, there are other significant changes brewing in
the background that have engineered far-reaching impacts to the graphics art and
communications services supply chain.
New media and the impact of I.T have challenged the relevance and value of
traditional print-centric service providers. Certain skills and industry constituents
such as print pre-press long held as a super specialization - have been ruthlessly
marginalized and driven to irrelevance. PDF, Photoshop, CTP, digital proofing and
the Internet along with a host of smart new applications for workflow and data
management digital asset management (DAM), marketing operations management
(MOM) and rules-based artwork production - have put the power of producing
media-ready output directly into the hands of the designer, rendering downstream
pre-press processing stages needless in most cases.
Some of the capabilities that were central to pre-press processing such as color
retouching and file integrity checks have become non-dependent on specialist
equipment or software due to the evolution of Adobes Photoshop and Acrobat
platforms. Proofing which once needed high-end capital equipment and manual
expertise (recall wet proofing?) is now almost a desktop capability (if not already,
will very soon be). To top it all, the demise of the scanner and the film some years
back with the advent of digital photography and CTP almost fore wrote
** India Media Forecast, Apr 2008 GroupM
G
Nw mdia and
tb impact of I.T
bav cballngd tb
rlvanc and valu
of traditional
print-cntric
srvic providrs.
T
H
E

T
R
A
N
S
F
O
R
M
E
D

G
R
A
P
H
I
C
S

S
U
P
P
L
Y

C
H
A
I
N








J
U
N
E

2
0
0
9
W
H
E
R
E

N
E
X
T

F
O
R

I
N
D
I
A
N

P
R
E
-
P
R
E
S
S
?
dj@intermediaglobal.com
4
MEDIA & COMMUNICATIONS INDUSTRY THOUGHT LEADERSHIP
Pr 1980 1990 2000 2005
PRE-PRESS
UFFERINC
> Litbograpby
> Engraving
> Typstting
> Block Making
> Postscript to Film
> DTP
> Scanning
> Wt Proofs
> Color Rtoucbing
> Digital Proofing
> PDF Cration
> Prmdia {print
& digital)
> Digital Asst Mgmt.
> Color Rtoucbing
DRIVERS UF
CAPABILITY
(Over and
above
knowledge of
print process-
es & media)
> Craftsmansbip
> Spcializd
Hardwar
> DTP Systms &
Computr Skills
> Spcializd
Hardwar
> Vrtical
Spcialization
{Commrcial] Pub-
lisbing] Packaging)
TIME ERA
> LAN]WAN
> Spcializd
Softwar
> Color Mgmt.
> Vndor
Rlationsbips
> Comprbnsiv I.T
& Workflow Integration
> Procss Excllnc
> Markting
> Branding Knowldg
> Vndor Rlationsbips
> Program] SLA Mgmt.
> Data Mgmt.
2009
Pr-prss Industry Evolution: Diferent Times, Diferent Demands.
PRE-PRESS ERA PREMEDIA ACE
pre-press obituary. To justify their continuing relevance, prepress tradeshops
have made desperate attempts to promote concepts of color management.
Understandably, this ploy has met with little success. While there exist pockets of
specialization such as packaging repro for flexo and gravure printing or even high-
end color retouching, the trend is clear; pre-press tradeshops need fundamental
changes to their business model driven by the markets demand for a whole new
set of capabilities. Some of these new capabilities will mean battling for footholds
in traditional agency turf or downstream in the print services domain. Given their
state of evolution and inability to attract or aford quality professionals across
technology, operations and business development, this is too much of an ask for
most tradeshops.
Tb Cbanging & Tb Cbangd
Like most industries, pre-press has gone through constant upheavals over the last
3-4 decades. So the current changes arent a new phenomenon. Tradeshops have
managed to survive previous upheavals largely because they have been around
equipment or specific techniques. Whats diferent this time is the fact that the
change is industry-wide and driven by fundamental shifts in both technology and
supply chain relationships (refer graphic on next page). The nature of customers,
markets, products and business relationships have undergone transformations.
Moreover, the speed and magnitude of the change this time around, make it both
disruptive and almost unmanageable.
Pr-prss
tradsbops nd
fundamntal
cbangs to tbir
businss modl
drivn by tb
markts dmand
for a wbol nw st
of capabilitis.
Tb Emrgnc of Prmdia
Information technologys relentless inroads into the graphics supply chain at
equipment, software, process and workflow levels has realigned skills, redefined
service provider capabilities and more significantly, reconfigured industry
T
H
E

T
R
A
N
S
F
O
R
M
E
D

G
R
A
P
H
I
C
S

S
U
P
P
L
Y

C
H
A
I
N






J
U
N
E

2
0
0
9
W
H
E
R
E

N
E
X
T

F
O
R

I
N
D
I
A
N

P
R
E
-
P
R
E
S
S
?
5
dj@intermediaglobal.com
MEDIA & COMMUNICATIONS INDUSTRY THOUGHT LEADERSHIP
structures. Traditional, linear relationships have given way to newer structures
over the last decade.
The most significant trends as far as industry structure and power equations go
has been triggered by the agencys diminishing hold on the marketers spending
decisions and the emergence of a new class of service provider - the premedia
business. Agencies having painted themselves as the intellectual and creative
business in the supply chain, have always been loath to do run-of-the-mill studio
production work. Besides, their exorbitant fees and lack of focus on service levels
has begun to put of marketers who do not always need a creative approach to
design but are instead, looking for templatized execution, rapid turnarounds and
lower costs. Typical of such work includes design adaptations and artwork building
for below-the-line (BTL) marketing communications especially in situations where
the branding rules and artwork creation guidelines have already been defined.
As a result of the agencys inability to heed this need of the marketer, such work
started moving to stand-alone production agencies as well as to the few pre-press
tradeshops and print providers that were willing to extend their capability.
Tb most
significant trends
as far as industry
structur and
powr quations go
bas bn triggrd
by tb agncys
diminisbing bold
on tb marktrs
spnding dcisions
and tb mrgnc
of a nw class of
srvic providr
-tb prmdia
businss.
> Brand strategy
> Media cost management
> Supplier choice
> Studio production
> Studio production &
premedia services
> Print output quality
> Digital asset
management
> Print production &
output quality
> Logistics & print
fulfillment
> Brand strategy &
design
> Media buying
MARKETER
MARKETER AGENCY
CREATIVE
AGENCY
PREMEDIA
AGENCY
PRE-PRESS
SHOP
PRINTER
PRINTER
> Print production
> Logistics & print
fulfillment
> Print quality
management
Pr 2003 Era: The Agency-Controlled Graphics Supply Chain.
2004 - 2009: The Marketer Begins To Take Control. The
Premedia Agency Emerges.
SUPPLY CHAIN DRIVERS:
> Production Quality
> Brand Consistncy
SUPPLY CHAIN DRIVERS:
> Production Quality
> Brand Consistncy
> Cost Efficiencies
> Spd of Implmntation
> Workflow Integration
T
H
E

T
R
A
N
S
F
O
R
M
E
D

G
R
A
P
H
I
C
S

S
U
P
P
L
Y

C
H
A
I
N








J
U
N
E

2
0
0
9
W
H
E
R
E

N
E
X
T

F
O
R

I
N
D
I
A
N

P
R
E
-
P
R
E
S
S
?
dj@intermediaglobal.com

MEDIA & COMMUNICATIONS INDUSTRY THOUGHT LEADERSHIP

Consequently, pre-press tradeshops largely dependent on the agency business saw
a huge shift in their customer profile as corporate brand managers began soliciting
their services directly. While this brought for pre-press tradeshops the golden
opportunity to evolve into premedia services, most have struggled to come to terms
with the new set of challenges.
Survival Stratgis for Indian Pr-prss
With waning demand for traditional pre-press services, tradeshops have been forced
to transition their business models for survival. These transitions have been along
one or more of the following lines:
Pr-prss to Print
Most pre-press tradeshops have found in print services a natural extension of
capabilities particularly via the digital print route - large format outdoor, indoor
signage and short-run digital print services. However, none have managed to
translate technical familiarity with print processes into big business or grasp the
complex commercial and operational challenges of the print market. Competing in
print services also meant making capital investments and risk-taking of an order
much larger than tradeshops know or can aford. With disruptive change being the
need of the hour, incremental investments by tradeshops in print capability has
done nothing to alter the status quo.
To complicate matters, in-house pre-press operations at print shops - often, much
larger and more sophisticated than stand-alone tradeshops - are now in direct
competition with specialist tradeshops. Considering printers determine output on
far larger budgets, they have greater leverage of client relationships (especially in
publishing and packaging). In majority of cases printers have simply ofered pre-
press as a free value-add to their print orders. As a result, stand-alone tradeshops
are no longer in demand for pre-press expertise like in the past nor have they fully
been able to transition into mainstream print businesses.
Pr-prss to Prmdia
The second attempt at a transition has been through the upstream migration into
a space between design (the intellectual, creative domains) and pre-press (the
hardcore technical end) called premedia. This transition however, is the result of
market forces rather than any strategic, pre-determined response from tradeshops
to explore upstream competencies. Globally, most of the larger, better managed
tradeshops have made this transition into the premedia space quite efectively.
However, in the Indian context, tradeshops have discovered how woefully short they
are on the capabilities front to play this game (Refer graphic on Pg. 4 again). Instead,
the premedia space is being occupied by a new breed of technology and market
savvy players who have better understood the drivers of premedia capability i.e
focus on IT-enabled services, delivery excellence, program management and strong
capabilities on the digital media front.
Tb inability of
pr-prss tradsbops
to undrstand tb
prmdia gam bas
cratd a vacuum
tbat is quickly bing
filled in by better
quippd playrs
upstram and
downstram of tb
supply cbain.
T
H
E

T
R
A
N
S
F
O
R
M
E
D

G
R
A
P
H
I
C
S

S
U
P
P
L
Y

C
H
A
I
N






J
U
N
E

2
0
0
9
W
H
E
R
E

N
E
X
T

F
O
R

I
N
D
I
A
N

P
R
E
-
P
R
E
S
S
?
7
dj@intermediaglobal.com
MEDIA & COMMUNICATIONS INDUSTRY THOUGHT LEADERSHIP
In the next part of this thoughtpaper series titled Tb Indian Prmdia Markt:
Top 5 Supplirs the relative strengths and capabilities of this emerging breed will
be analyzed.
Local Markts to Uffsbor Srvics
In response to falling rates and sharp margin erosion in the domestic market, a few
Indian tradeshops jumped into the ofshore bandwagon. Again, this move has been
attempted without first addressing fundamentals - ability to engage in large-volume,
multi-year contracts and the capability to deliver (people, process, technology).
With historical technical expertise no longer the sole criteria for buying ofshore
services, tradeshops that presumed superiority in pre-press knowledge was enough
to crack deals are learning hard lessons. Growing buyer maturity has also led to
the realization that ofshoring is more about managing risk at multiple levels than
merely managing delivery of print-ready output. Along with technical evaluation
comes the assessment of several critical vendor capabilities such as scalability,
quality of service (QoS), track record for contract and SLA adherence, project
management, ability to attract and retain professional talent, business continuity
measures and overall business maturity. To compound matters for tradeshops,
the new breed of professionally managed ofshore service providers has begun to
capture the imagination of global buyers for premedia services.
In the publishing domain especially in journal publishing and to some extent
magazine prepress, there has been strong success primarily due to the far superior
capabilities of service providers who have essentially come from the IT-enabled/
software services domain. There have also been large print businesses that have
made successful forays into the ofshore publishing services space.
A Cbasm Too Wid
Because of their non-professional management (most are family run businesses with
revenues in the under $5 mln. bracket), lack of brand image and often, poor business
vision, tradeshops have been unable to put in place many of the key drivers needed
to make the transition. Some of these include:
Inability to attract quality talnt: Tradeshops are still considered a blue-collar
organization making them distinctively unattractive to knowledge workers as an
employment and career option. Further, as closely held family businesses many are
loath to sharing management control with professionals or getting outside funding
for fear of losing their hold on business.
Lack of markt and customr knowldg: Most tradeshops lack the ability
to understand the marketers needs and develop suitable solutions around those
needs. From dealing with the agencys account servicing, creative and production
staf on technical issues to managing business and commercial expectations of
corporate marketing and procurement experts has been too wide a chasm to bridge
in terms of business approach and market making ability.
Witb bistorical
tcbnical xprtis
no longr tb
sol critria for
buying offsbor
srvics, tradsbops
tbat prsumd
supriority in pr-
prss knowldg
was nougb to crack
dals ar larning
bard lssons.
T
H
E

T
R
A
N
S
F
O
R
M
E
D

G
R
A
P
H
I
C
S

S
U
P
P
L
Y

C
H
A
I
N








J
U
N
E

2
0
0
9
W
H
E
R
E

N
E
X
T

F
O
R

I
N
D
I
A
N

P
R
E
-
P
R
E
S
S
?
dj@intermediaglobal.com
8
MEDIA & COMMUNICATIONS INDUSTRY THOUGHT LEADERSHIP
Copyrights Intermedia Global, 2009
Smartr nw comptitors: A third factor is a new breed of smarter competitors
production agencies run by ex-advertising professionals, new-media agencies
and a whole host of technology-savvy service providers that have moved into the
graphics production services space particularly through ofshore outsourcing.
Tb pricing sbock: During their heydays (until the late 90s) Indian tradeshops
charged and got rates at between $45-$60/hour** for services such as scanning,
retouching and such activity simply because they ofered a specialization or had
equipment that others didnt. With the dilution of expertise brought about by
technological changes, typical rates came down to between $30 -$45/hour in the
early 2000s. Today, similar work is being done for between $20 - $30/hour by a
plethora of production studios and small agencies and for volume-based work
such as in ofshore outsourcing engagements, rates today, range between $8 -
$18/hour depending on type of work, service level expectations and volumes. This
new rate expectation from commercially savvy clients for services such as image
manipulation is a huge cultural shock that tradeshops have found impossible to
come to terms with.
Lack of projct managmnt infrastructur & skills: The organizational
capability to handle large work volumes in a process-driven production environment
that leverage I.T and workflow systems simply does not exist.
Conclusion
Global trends clearly point to a growing demand for technology-centric premedia
services. With traditional tradeshops ill-equipped to move up the technology curve
or professionalize fast enough, the premedia landscape is seeing the emergence
of a new breed of professionally managed service providers with strong I.T and
marketing expertise. And with Indias growing local market and strategic location
as a low-cost, English-speaking production base, global majors such as Schawk, R R
Donnelly, Watt Gilchrist (now Sun Branding), Stibo Systems and Fresh Media Group
have been quick to establish their presence in the Indian market.
A fundamental problem Indian tradeshops have is in their approach to business
which is still transactional rather than partnership focused. Tradeshops need to
clear the cobwebs in their mind and professionalize at all levels if they have to
make an attempt at a successful transition. But professionalizing means letting go
of personal control over business and the shopfloor as well as making fundamental
changes in the approach to managing business - corporate governance, business
ethics, legal compliances, IPR track record and H.R policies - thoughts too culturally
alien and radical for the small, family-run tradeshops.
Clearly, the turf is ripe for a new generation of premedia players in the Indian
market. For the traditional tradeshop still living in the past, the alternatives are
clear: sell out before its too late or be driven to irrelevance.
** 1 US $ taken at current conversion rate of Rs. 48 approx. Rates vary depending on task complexity.
Clarly, tb turf
is rip for a nw
gnration of
prmdia playrs in
tb Indian markt.