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Jan 1, 1997 12:00 AM
As the virtual gold rush plays out on the Internet's World Wide Web, printers are among the most recent prospectors. These cyberspace adventurers have their own Web sites, primarily as marketing tools, communication links to customers or both. Still others are also building and servicing sites for clients.
According to the latest Printing Industries of America (PIA) Technology Benchmark Survey, approximately 17 percent of PIA members have their own pages on the World Wide Web, and 12 percent create pages as a value-added service for customers. A few, four percent, and all since last year, run their own Internet servers, posting client pages under their umbrellas.
Obviously many printers are still unsure how a company Web site will benefit their business. What's more, the jury is still out on whether this new kind of Web production--site building and hosting for customers--can be profitable for printers or if they should even be involved. After all, there are no budgeted hourly rates to fall back on for planning.
The first answer from printers in the business as to what to charge customers is "whatever the market will bear," and they are decidedly reluctant to be specific.
Certainly, the country's largest printers and prepress houses are among the four percent that are involved. But is this an area exclusive to companies that can make huge monetary investments? Not so, say those with experience. From the point of view of some printers who have already taken the leap to cyberspace, a Web design company, a Web service plus an industry consultant, the Net remains an area in which even the smallest businesses can stake a claim. All of them caution, however, that it takes vision, planning, clear goals and know-how.
Printability, for example, is a five-employee quick/commercial printer with electronic prepress services in San Lorenzo, CA. According to owner Rodney Fite, the 10-year-old shop specializes in business-to-business printing, doing a little retail work. The company has maintained its own Web site (www.printability.com) for over two years. It began developing sites for clients about 18 months ago and added hosting services a little more than six months ago.
"We got hooked on surfing the Net and started a site for ourselves," Fite explains. "We learned HTML coding and how to set up a site."
In addition to acting as a marketing tool, the site's primary use is as an area to post initial color proofs for clients to examine.
"We post the pages from their files so that customers can check for color breaks and proof copy 24 hours a day," Fite says. "Of course, the color is way off but about one-third of the time customers catch something or want to make a type or layout change that would have made a second proof necessary. If they have a color printer in their office, they can even print the file out to look at a hard copy."
Fite also says the firm was "dragged into" putting together sites for other people. In the early days, this consisted of coding designs in HTML and returning a disk to clients. At first, Fite admits to not having a clue what to charge. Now that he has a feel for Web development, things have changed.
First of all, Fite notes that the company no longer has the time or programming ability to keep up with the constantly changing Web, a sentiment echoed by other Web designers as well. The browser wars, database publishing, and a steady stream of new programming tools and languages have made the technology of even the simplest web sites far more complex.
Fite notes that although there are services around that will set up a home page and a few links for around $100, the real challenge is to spend the time necessary to make sure that the only reasonable goal, a measurable benefit to the client, is met. The California exec claims he spends at least five hours with clients in site planning. They discuss what can and can't be done, realistic expectations and security issues. Then, the firm maps out the site and sends it out to a developer for coding.
"In the early days, it used to be safe to design for Netscape 1.0," Fite recalls, "there was no Internet Explorer. Now, a basic page will work with either browser but if you are doing something a bit more complex, you may have to have two sets of pages so that the site will work for most users."
Typically, Fite does an estimate for a complete job as opposed to billing by the hour, although he says that $55 per hour is considered reasonable in the Bay Area. The least expensive design from his shop is around $695 but, he notes, that price "rules out a great deal."
Printability's web hosting services resulted from customers' requests as well. Fite says the company offers both a high and low end service package through two different Internet Service Providers (ISPs).
"We set up the service and bill the client," Fite says. "We looked at doing it here, and someday we might, but right now the high-end provider we use offers excellent UNIX-secured servers. We bundle the ISP charge and our charge. For example, $500 would cover the service plus a predetermined number of hours for updating the site."
"Web design and service is not a commodity yet," points out Dave Mercier, chairman of the board of StarNet Digital Publishing (http://vangundy. com/starnet3.html) and Dave's World (www.dave-world.net) in Bloomington, IL. StarNet is an on-demand fully digital printing service running Docutechs and an Indigo E-Print 1000. Dave's World is a separate business set up exclusively for Internet and Intranet work.
"StarNet customers came to us and asked us to help with their Web sites," Mercier recalls. "That's when we set up Dave's World. Each business has to live on its own."
Mercier divides the printing world into three types of companies. "First, there are the printers who put ink on paper; at the second level there are companies that are communications groups that handle print and interactive multimedia, and there are companies that provide complete solutions. They might handle complete direct marketing or mail campaigns."
The first group, he believes, should not incorporate Web design and service into the original company.
"Some printers in our area are doing it on a casual basis with clients to keep clients happy. It's a loss leader to keep the printing business," Mercier says. "It's not the same thing as putting ink on paper. It's as different as going into the TV business. The best thing to do is set up as a separate business or at least a separate division."
StarNet, however, is not forgotten. Clients who need Web services are sent to Dave's World and Web clients, who frequently generate promotional printing for their sites, are served through StarNet. Despite their separate missions, Mercier reports a genuine dynamic between the two companies.
Dave's World employs 10 people full time and has a dozen or so on call for outsourcing work as necessary. It has been a standalone company for two years. According to Mercier, a typical site costs between $5,000 and $10,000 in design, although he notes that some companies generate $100,000 for designing a Web site. Maintenance costs depend on location and how much updating the client requires. Unlike Printability, Dave's World has an in-house hosting operation. Clients pay the local rate for their region of the country.
Mercier points out that the challenge for printers is not so much to figure out exactly what to charge as it is to get properly set up as a service in the first place. Expert Web site designers are hard to find, he insists, and not every designer is automatically qualified to work on the Web. Working with the lower resolution and limited colors on the Web, plus knowing what fits efficiently on the screen bring different aspects to a project. The other personnel challenge is finding skilled programmers.
"The browser delivery systems change from month to month," he observes. "Printers have to ask themselves how they can use the skill base in their area. It's difficult to run a Web design business because the environment is changing so fast."
Hosting is another matter as well, with good UNIX programmers expensive to keep on staff. Dave's World, for example, is migrating its hosting platform to Windows NT, which is more easily learned. Although Mercier sees that operating system as less robust than UNIX and less customizable, he believes that you can make up for these aspects with additional hardware.
Darren David and Rob Gilson, principals of Swank Website Architecture (www.thebomb.com), located in San Francisco's Multimedia Gulch, exemplify the new breed of designer that possesses the skills Mercier describes. Both men are graduates of California Polytechnic's Graphic Communications Dept. They have backgrounds in graphic design, print media and electronic prepress but they have also studied computer science and have hands-on experience in programming and networking.
"A Web site is not a shot in the dark," David says. "A Web site should have targeted goals and objectives. Functionality is the key. The first generation of Web pages are entertainment. These basically say, 'Here's what we do.' The second generation are dynamic pages with more interactivity and more timely material. These sites use database interfaces. The third generation is a site that allows people to conduct business on the Web. For prepress or printing organizations it may be showing clients where a job is, proofing, FPO transfer and so on. With theses functions, the Web can save a company money."
"A Web site is not a one-time static deal," Gilson adds. "It involves updating. We offer that service."
Swank has worked on Web sites for Bay Area graphic arts firms. In fact, as a summer intern, David designed and set up the Web site for Printing Industries of Northern California (www.pinc.org). And while the partners would certainly work with a printer on a client's Web project, neither David or Gilson see traditional commercial printing firms as possessing the appropriate skills in-house for Web site design and hosting.
"Yes, you can design a Web page, but a highly skilled use of interactivity requires design at a totally different level. Interactive design takes a knowledge of individuals and how people interact that's not inherent in an electronic prepress department," David asserts.
In serving its own clients, Swank puts together what David and Gilson call a "collection of resources"--a team with the skills necessary for the project at hand. They bill "what the market charges," for professional design projects plus the fees for the resources they employ on any one job.
On the other side of the country, Alan Rihm, a principal in Surf Network, Inc. (Willow Grove, PA), has a somewhat different take on printers offering Web services. Surf Network's home page is called Planet 3 (www.p3.net) and its special graphic arts page is found at www.gaweb.com.
Rihm, whose graphic arts background includes four years in prepress equipment sales, and Al Perelli founded the company two years ago. At first, it was going to be a local bulletin board service providing E-mail, newsgroups and content similar to America Online or CompuServe. Then the Internet came along. Today, Surf Network is a full-service Internet access provider as well as a Web service provider that rents space on its servers. The company also offers site building and Internet marketing and advertising assistance. And, even though his printer customers may someday compete with the company, Rihm believes it is a viable business.
"Printers have all become digital," Rihm points out. "The Web is a natural extension because it allows a direct link to customers. It's value is in reduced turnaround and cost and it's also an opportunity to make money.
"Printers are mentally committed to ISDN or T1 lines for prepress production, so in essence, they're already a Web server. Why not host? Also, there are different levels for Web sites. Printers are already producing pages, scanning and doing all the electronic prepress work. They don't have to be a design shop for certain levels. They can repurpose pages for customers."
Rihm sees pricing as a challenge, since there are no set prices for Web pages. He estimates costs to range between $500 and $20,000.
"A printer can look at in-house costs per hour and come up with a billable rate to produce a job and then add on enough to make a profit," he suggests. "In the best case, the client is buying 'mindware,' and the printer will need to work with a Web designer. Then you bill out as a project, say 10 hours for $1,500. If original art is involved, that figure might be $3,000. You're paying for the designer's ability."
To develop a charge for hosting, which Rihm points out is recurring monthly revenue, the first thing to do is amortize the equipment costs over a 24-month period and assign those costs spread over the number of sites that equipment can handle. The next step is to research how much local providers are charging, since costs around the country typically range from $100 to $500 per Web site. Rihm believes that printers usually can get more money for hosting than pure ISPs because they can offer a lot more value, for instance site maintenance and updating.
Lou Laurent, principal of Laurent Associates International (Sarasota, FL), has a much different slant on printers involvement with the Internet. Laurent Associates provides business and market development for companies engaging in electronic imaging and recording, including equipment vendors.
The consultant sees, for example, value in printers having their own Web sites and using them to maintain a closer relationship with customers. He also sees what he calls template publishing--simple projects, such as single to four-page brochures, that can be selected and specified over the Internet as potential revenue producers. Finally, he also urges printers to focus on targeted communications, such as dedicated 800 numbers, to make money with on-demand services."
"There already are lots of people who design Web sites, and you don't just build Web sites," Laurent says. "They have to be continually revised, updated and promoted. A site is never right the first time--or the second or third. There's a lot of rework and ongoing maintenance. That requires ongoing resources. Printers should find the people who focus on this business and make some arrangement with them so that it doesn't take up company resources. A strong printing business might even acquire an Internet firm and then closely monitor the results produced."
Laurent also is quick to point out that Internet services are not the solution for printing or trade shops that are in trouble financially.
"If you have a virus in your core business, why do you think you can run something else?" Laurent asks.
Nor does he particularly see the Net as a profitable business opportunity. Like others today, he calls it the "CB of the 90s," although he points out that unlike the CB, the Net is not going away. Instead, he predicts that we are in for a decade of pain as the telecommunications companies sort out access problems.
His advice to printers whose clients ask for Web work is to not provide this service unless it means incrementally more printing for the company.
"Web sites don't promote themselves," Laurent points out. "They need advertising media. First, carefully qualify a firm commitment and synergy between production, promotion, and the Net. Second, understand what the relationship of the Internet to print will be. In other words, directly link the Net services to print."
If you decide to involve your company in Web design and/or hosting, keep these basic principles in mind: 1. Make sure you have the design and programming skill base in your area. HTML programming in-house is not nearly enough. 2. Develop agreements with companies that offer resources you lack. 3. Be sure the Web site planned for your client will meet measurable goals. 4. Establish a mechanism for measuring results within the site. 5. Reach an up-front agreement with clients about site updating. Be very specific about how much time per period (day, week, month) will be devoted to that client's site and how long it will take to make changes to the site. 6. Run the numbers to make sure you can recoup equipment costs and still make a profit if you have to add more server power to host sites.