Looking to improve its position in the direct mail, transactional and transpromo markets, HP announced a technology alliance with RR Donnelley last week to develop digital printing solutions for inkjet-based digital presses.
Industry experts said the deal could lead to more common use of high-speed inkjet presses. Several manufacturers have introduced these presses, including RR Donnelley, which has a high-speed digital inkjet platform it developed internally. These presses are faster than other digital presses, while still producing high-quality results, and can use a variety of paper stocks.
These characteristics make the presses well-suited for high-volume direct mail, transactional and transpromo campaigns. However, there are only a handful of printing installations around the country.
“This technology is not mainstream yet,” said Kemal Carr, president of print communication consultancy Madison Advisors.
Because printers want to cut costs, Carr added, no high-speed inkjet platforms were placed in the second quarter. However, two major brands throwing their weight behind the technology could begin to change that.
“The Donnelley name [adds] credibility in the industry,” said Steve Welkley, business development manager for inkjet high-speed production solutions at HP. “This is a proof point that HP has an effective solution.”
RR Donnelley declined to comment for this story. The company is already a player in this market, with well-developed contacts and industry knowledge.
By collaborating with Donnelley, HP is expected to take solutions to market faster than if it were working alone.
The HP-Donnelley alliance “adds credibility through association for each,” noted David Davis, director of Interquest, an electronic printing and publishing market research firm.
Products developed by the two companies will be sold under the HP brand. The financial terms of the deal, or whether Donnelley is buying HP presses as part of this alliance, weren’t revealed.
HP and Donnelley will initially focus on developing a Magnetic Ink Character Recognition (MICR) printing platform that would be offered as an add-on to the HP T300 Color Inkjet Web Press and be used for RR Donnelley’s internal needs as well.
MICR printing is what is used by the majority of financial institutions to enable high-speed and secure reading of checks. There are also other applications that may offer bigger opportunities for HP as the financial services industry contracts.
MICR combined with a high-speed digital inkjet press so that it provides cost-effective color printing “is something that both high-volume direct mail and the transaction markets are very interested in,” said Welkley.
“It makes sense for HP to MICR-enable its inkjet press,” said Davis, adding that Océ already has a service along these lines and Infoprint expects to announce one at the Print 09 Conference.
Any MICR service from HP and Donnelley would probably see a lot of exposure on the direct mail side, where promotional checks printed with MICR information are “one of the hottest applications” right now, said Davis.
A new report from Interquest, released September 14, forecasts that while the volume of checks being printed every year has decreased from 32 billion in 2007 to 28 billion in 2009, promotional MICR documents such as balance transfer checks, refund checks, reward certificates and coupons have been a growth sector for direct mail printing companies.
“To date, transpromo hasn’t met expectations [in the printing industry]” but HP and Donnelley may be looking to change that, said print consultant John Zarwan. l