October 7-10, 2012 Chicago, IL

Global Channel Partners Summit 2012 Presentations: The State of the Channel: 2012 DOES IT REALLY MATTER?

Global Channel Partners Summit 2012 Presentations: Channels are the least flexible aspect of the marketing mix. This is an open invitation to new competition.

Global Channel Partners Summit 2012 Presentations: In the Battle for “Place,” Convenience Wins versus

Global Channel Partners Summit 2012 Presentations: The State of the Channel: 2020 BREAK WITH TRADITION BEFORE SOMEONE ELSE BREAKS IT FOR YOU

Global Channel Partners Summit 2012 Presentations: A Step Back: Why Channels? Channels provide an advantage not easy created internally … fill a void in a unique way that is proprietary and preferred All channels exist to reduce the total long-term cost and increase the effectiveness of a system of relationships (Selling direct is not always what it’s cracked up to be)

Global Channel Partners Summit 2012 Presentations: Commercial Printing’s Undeniable Trends Fewer and smaller print businesses – Greater distance between commercial print establishments Fewer suppliers Shrinking offset installed base, digital base increases “Mainstream Print” disappears

Global Channel Partners Summit 2012 Presentations: What Do These Trends Mean?

Global Channel Partners Summit 2012 Presentations: By 2020, per capita consumption of US commercial print will drop by -25% or more

Global Channel Partners Summit 2012 Presentations: Fewer US Commercial Printing establishments: down 1/3 by 2020 … or worse… -40% from 2012 to 2020

Global Channel Partners Summit 2012 Presentations: Content is Still Being Created

Global Channel Partners Summit 2012 Presentations: Ad Agency + Graphic Design Employment Now Exceeds That of Commercial Print

Global Channel Partners Summit 2012 Presentations: Fewer suppliers Excuse me, sir, I came here to see the pre-press pavilion… can you tell me where that is? Influence of long-established vendors is diminishing – Kodak working through bankruptcy – Heidelberg stock about €1.20 ($1.50) – Presstek 50 cents per share – Xerox shares were about $12 at end 2011, now are about $7.50

Global Channel Partners Summit 2012 Presentations: CapEx investment rate shrinks CapEx decreases from 5% to 3% of sales Dealer opportunity: new homes for current installed base as industry consolidates

Global Channel Partners Summit 2012 Presentations: Decreases in overall demand create new channel opportunities Suppliers need to cut fixed costs Workflows must become focused on multi-channel deployment Printers seek new revenue sources Content creators become new opportunity for graphic arts dealers and reps

Global Channel Partners Summit 2012 Presentations: Commercial Printing’s Survivors Will be Healthier Smaller Media Integrated Focused on Specialties Broadly Dispersed

Global Channel Partners Summit 2012 Presentations: Smaller markets + More complexity = Channel Restructuring

Global Channel Partners Summit 2012 Presentations: New Issues for the Biggest Traditional Suppliers Industry suppliers will restructure sales and service coverage – Shift from W-2 workers to 1099 independents and current dealers Independent technical and service personnel

Global Channel Partners Summit 2012 Presentations: Does Digital Media Hold Opportunities for the Dealer/Independent Rep?

Global Channel Partners Summit 2012 Presentations: If You Believe in “Marketing Services” You Believe in this Chart

Global Channel Partners Summit 2012 Presentations: Print Workflow Transforms into Multichannel Deployment “BIG IRON”ERA – Single-purpose CapEx – Buy once and feed with consumables DIGITAL ERA – Multi-purpose infrastructure – Constant CapEx upgrades and integration

Global Channel Partners Summit 2012 Presentations: How Digital Media Changes the Print Workflow Printers used to enter new markets with new equipment that would last years Printers will enter new markets with new software and new communications technologies that last for months

Global Channel Partners Summit 2012 Presentations: Today’s “Mainstream Print” Decreases in Volume Specialty production is more tactical than strategic More specialized equipment, niche tactics, approaches

Global Channel Partners Summit 2012 Presentations: Channel Questions for

Global Channel Partners Summit 2012 Presentations: Are dealers the “systems analysts” for marketing services / communications logistics?

Global Channel Partners Summit 2012 Presentations: Are dealers the new CapEx sales and service infrastructure for the industry’s former high-flying vendors?

Global Channel Partners Summit 2012 Presentations: Can dealers bring new ranges of specialties to printers anxious for new revenue streams?

Global Channel Partners Summit 2012 Presentations: If you want things to stay the same, things will have to change The Leopard Giuseppe Tomasi di Lampedusa

Global Channel Partners Summit 2012 Presentations: QUESTIONS Thank You Very Much!