Now Main Street's whitewashed windows and vacant stores
Seems like there ain't nobody wants to come down here no more
They're closing down the textile mill across the railroad tracks
Foreman says these jobs are going boys and they ain't coming back to your hometown - lyrics from Bruce Springsteen's "My Hometown"
Running the business of being a poster publisher has never been easy. Oh, there was a time back in the day when art entrepreneurs with a little savvy, an eye for what sells, some cash and ambition could start up a poster publishing business and become successful. Those days are long gone.
If one studies the history of the open edition print and poster publisher market, it quickly becomes obvious there hasn't been any new blood for years. Even before the advent of the Internet and the Giclee phenomenon, the cost of entry had risen to the point it was not feasible for new companies to enter the market. That gave the existing crop of publishers protection from serious competition from newcomers to the field and they needed it. The price of posters has not kept pace with the economy at all. The $40 price barrier has held firm for years. This while the cost of nearly everything else has escalated two, three, four fold and more. Just look at fuel and housing.
While retail prices for posters has been relatively stagnant for decades, the pressure for greater discounts continuously increased with even small fry operations negotiating hard for 50% less 50% less 20% off retail for low volume orders. That means a $40 retail poster goes out the door at $8 wholesale. You have to move a lot of paper to make an $8 sale meaningful. Complicating matters further has been the rise of the big box retailers pushing out mom & pops. With their buying power, big retailers and volume framers, aka OEMs, drive serious hard bargains with publishers. The latest wrinkle is requests to license the art from publishers and source the printing to you know where...China.
Think about the multiple hats required in the job of a publisher. Find the artists, guide the artists, create, follow, find trends in color, fashion and decor, find the galleries, the retailers and distributors to get the work shown and sold to consumers. Deal with demanding buyers and knockoffs from everywhere. Keep track of what's happening with tradeshows, trade magazines and other marketing venues. Maintain a vigilant marketing program to keep the brand awareness high. Take all the risk in printing at least 1,000 copies of each print it licenses from its artists. Tie up the inventory while the marketing of the art takes place. Manage multiple licensing opportunities. Regularly review new artists's work. Deal with the ever frustrating declining number of buyers with the potential to place large orders, e.g., volume framers and big box retailers. Keep a watchful eye on the development of online sites such as ImageKind, Finerworks and others that cater to self-represented artists by providing POD and Web marketing capabilities.
Publishers also must deal with the vagaries and whims of a small cadre of important buyers that dictate taste for 2D art for the mass market, sometimes to their personal dissatisfaction. Imagine having to publish what the buyers want while often having to turn away talented artists because their look is not "decorative", "graphic", "colorful" or whatever descriptors these buyers demand from publishers. This factor alone was enough to drive some of the smaller boutique publishers in to selling their businesses to larger publishers. Bentley Publishing Group alone swallowed up numerous other publishers in the past decade.
This on top of dealing with artists who in their ranks have more than a fair share of tempermental personalities that can be difficult to work with. And to be fair, there are also many artists who are professional and a dream to work with as well. It's just that the prickly ones make the business more challenging than it ought to be. In addition to the above mentioned factors, the rise of the Internet coinciding with the development of the giclee process have thrown more wrenches into the work.
This week, a press release was released about Art.com and Allposters.com. These operations, owned by the same company, announced they were going full scale into the business and trade categories. For poster publishers, that is the equivalent of having your best distributor and one of your largest customers go into business against you. At least in this case, the dotcoms will have to source through the publishers for the time being anyway. However, the more successful they are in penetrating the market, the thinner the margins will be for poster publishers. This in the face of the most severe competition print publishers have ever faced. It comes from Chinese oil paintings, online art sites, self-published artists just to name a few. And, as previously mentioned, publishers are also in some cases being asked by big box retailers to provide content but not product. That is, the printing can be done cheaper overseas.
Unfortunately, poster publishers cannot live on this kind of continual slicing their margins to the bone. It is a cruel world out there and many other industries are under similar kinds of siege from a convergence of technology, overseas competition and other factors. The outcome for nearly all of them has not been pretty. And it points to the problems of staying profitable for poster publishers.
I wouldn't be at all surprised to see some shake out in the business as a result of the ongoing upheaval and changes that continue to occur. When you consider new publishers are non-existent and now the likelihood that the weaker ones are facing dire circumstances that might cause them to sell or shutter their businesses, it adds up to a loss of vibrancy and variety, as fewer poster suppliers further consolidate and cater to a small but important group of buyers.
If all this weren't enough, the effort to create and distribute a massive printed catalog is more burdensome and expensive than ever. The Internet and DVD and CD catalogs may offer some relief to printing a huge catalog of work, but it is still being done. Some of the top tier have invested as much as $1 million or more in producing and printing their hefty catalogs only to have new inroads into their business as never before.
I understand why Art.com et al is going after the design trade. It is attempting to garner business wherever it can find it and to leverage it's enormous catalog and extensive production framing capabilites. Of course, the expected IPO, which I have previously blogged about, also has to be behind the drive to expand the business.
Orders from contract designers can run into thousands of prints for one order. And, when framing is included, the sales volume on such deals easily runs in six figures. There just aren't other sources that can provide the opportunity to bid on such huge jobs. But, having them in the field which is already crowded and competitive means life isn't getting easier for poster publishers as a result. Without question, it will lead to slimmer margins which are already razor thin or under water for many publishers. You can look at the list of exhibitors at this year's Hospitality Design Expo to see how many publishers are competing in that space. Art.com was listed there this year as an exhibitor.
I don't have a crystal ball for how things will play out for poster publishers. I'm certain every one of them is carefully considering its options and closely watching how the business is unfolding. The undoing of the New York Decor Expo show was a harbinger of things to come. Now, the Atlanta Decor Expo show continues to show fewer booth sales. The size of the show in September will be telling. These shows were once huge buying influences for poster publishers. Their continuing decline foreshadows the direction of the industry and the fate of the poster publishing business.
How this plays out is anyone's guess. And, anyone purporting to know would be doing so only through conjecture. Still, one can easily imagine that many poster publishers might stop publishing (as in printing and inventorying) art altogether. They might morph into content consolidators and distributors or licensors instead. To a degree, that is what is being asked of them when they are confronted with offers of taking a royalty on artists' work they represent. Despite the high overhead, printing and carrying inventory has been a sacrosanct profitable component of a publisher's business. That it is under siege is yet another straw being laid on the camel's back.
To have the printing profits taken away, but leaving the same expense and difficulty of sourcing new artists and maintaining profitable ongoing relationships with them makes a major change in a publisher's operation. It's a fundamental shift that in consideration with other changes will cause many to rethink if they want to be in the business at all. The evolving situation in the poster publishing business will ultimately wreak changes in the art print business model that will have an outcome far different than most publishers would choose for their companies.
In many ways, we've turned a corner and despite looking back at the good old days, things are not going to be the same. Posters aren't yet the buggy whip manufacturers of the day, but their business model is rapidly changing. Sadly, it's quickly coming to a time where the best and brightest will find ways to cope and thrive and those not up to the challenge will be looking for other ways to make a living.
