Print CEOs Protest New FedEx Kinkos Deal
Print Franchise CEOs Hold Angry Pow Wow With Adobe Over FedEx Kinkos Print Button
SAN FRANCISCO - Adobe Systems Inc. has inked a deal with FedEx Kinkos. Starting with version 8.1 (available now), every Adobe Reader has a "Send to FedEx Kinko's" button (see logo next to the printer button on the Adobe tool bar above).
The problem is that most franchise quick printers over the years have worked with Adobe to develop their own version of "send to", or what is technically known as PrintMessenger PDF drivers. Their franchisees seek permission from their customers to install such print drivers. Print jobs are then easily sent from any computer desktop with an Internet connection to a local print franchise in a pdf file, which ensures consistency in format.
All of that has changed with the release of Adobe Reader 8.1., which features a prominent option to print the pdf file at your local FedEx Kinko's.
Adobe hastily arranged a forum meeting with quick print industry leaders in San Francisco on July 17, 2007, after its 8.1 release on June 7. A coalition of quick print franchisors and print associations gathered in a hastily arranged forum to protest. Leaders from Alphagraphics, Allegra, Minuteman Press, Sir Speedy, ICED, PIP and Signal Graphics were among those in attendance.
CEO Michael Makin of Printing Industries of America, a trade association, told Printbuyers Online, "Adobe’s decision to give up its neutrality and try to align its business with one printer is unacceptable. It is our hope that Adobe’s CEO, Bruce Chizen, will realize the mistake that has been made and rectify the situation as soon as possible."
Cary Sherburne in the blog site, What They Think, reports the print coalition at the meeting heatedly affirmed its commitment to remove the button, saying, "Should Adobe Systems not comply with this request, the Coalition will continue to work actively on this issue, exploring any and all options—both legal and otherwise—to have the agreement blocked and to encourage our members to explore alternative applications to Adobe.”
Adobe's Response
Adobe's CEO, Bruce Chizen, attended the meeting for roughly an hour. Chizen stressed, "Adobe had a contractual relationship with FedEx Kinko’s that the company needed to fulfill" but that the company would listen.
John Loiacono, Senior VP of Adobe's Creative Solutions Business Unit, later made this statement on his blog about the meeting:
"We [SVP Loiacono and CEO Chizen] committed to coming back to them within two weeks with a decision on how we will move forward. We are going to do everything possible to find a way to deliver a win - win situation on all sides. It's the right thing to do. Another lesson learned. In the meantime, some good has come out of all of this. We finally got many of the industry leaders in the same room and we spent the last 20 or so minutes of the meeting talking about what we could work on together once we resolve this big hairy issue that is on the table."
NOT AN ANTITRUST PROBLEM
Right now I'm sure the non favored quick print sorts are running around trying to find a law firm that will tell them they have some claim under antitrust laws as a consequence of this arrangement. THEY DON'T.
I was neck deep into quick print litigation years ago when Kinkos got started, and I was really surprised that someone could come along in a really already then overcrowded quick print industry and develop a successful adavanced model.
I know that several franchisees were headed in that direction with advanced business models offering 4 color close registration more commercial printing and other business services, as flat printing black and white on a traditional press was really old technology. The franchisors were actually resisting support for such a model - out of laziness and ineptitude. The quick print industry was really becoming just a copy machine reproduction service because copier technology had become so good that the old press printing approach was no longer "the thaing". Even raised letter thermographic printing was losing business to copier technology. That and copier-computer linking were opening up vistas that made the standard quick print shop seem like something that belonged in a museum. That and some franchisors' unwillingness to leap ahead with the developments produced a lot of disputes and bought me a lot of motorcycles and good wine.
Kinkos is now - at least in my mind - the word for going to a business to get documents reproduced and assorted other related services. Kinkos is also pervasive in its locations in major markets. It proves that somebody really is smarter than a 5th grader.
If the Kinko model is performing well financially, as I suspect it probably is, the other quick printer groups named in the article are no longer relevant - certainly not as franchisors. They are just milking their over the hill model printing franchises.
It comes as no surprise that Adobe chose to tie in to Kinkos with this arrangement. The choice was easy - The Eagle or the Buzzards.
Richard Solomon
www.FranchiseRemedies.com
EFI Will Replace FedEx Kinko Button
EFI, the developers of PrintSmith, a point of sales software that is popular among quick print franchisors, will develop a way to delete the FedEx Kinko's button and replace it with the franchisor's PrintMessenger pdf driver. Franchise customers will be able to download these drivers when they access the print-on-demand function from their franchisor's digital purchasing website that EFI developed called Digital StoreFront.
Unfortunately, just a few thousand print buyers use this online service compared to 60 million Adobe Reader users who will see the FedEx Kinko's button everytime they access the software.
The WhatTheyThink blog contacted Marc Olin, senior vice president/general manager, EFI Professional Printing Applications, who also attended the Adobe Forum.
Didn't Even Know The Boat Was Leaving
What's wrong with this timeline?
In an industry filled with disruptive technologies, where were its esteemed franchise leaders? One would think that they would be plugged in since they rely on the technology so much. They should have had the "pow wow" with Adobe before the product was released; actually, key leaders should have been plugged in when it was in concept stage. But no.
Apparently, quick print leaders find out about product development when the rest of the consumer world does. Then it took them time to figure out what to do - after the product was released.
--
Read my article, The Lemming Walk of Quick Printers
YOU GOT THAT RIGHT
It's typical of the franchised quick print folks that they don't know what's going on until they read it in the papers.
Richard Solomon
www.FranchiseRemedies.com
Anti Trust
I wouldn't be so quick on this one Richard -after all it was Microsoft's decision to require OEM's to include IE as the default browser which triggered the DOJ anti trust investigation.
Certainly an intriguing development.
Michael Webster PhD LLB
Misleading Advertising Law
More motorcycles and wine
Who knows, maybe at a Kinkos location they don't have their " finger on the scale " either. This could give an opportunity to make some real money from franchising. Call options on FedEx and put options on UPS " deep in the money " should allow you to choose the color of your next Harley and the vintage of your next fine jug of claret.
PizzaGuy
What the heck - toss in a bucket of chicken as well
QUICKER'N A PREACHER IN FRONT OF FRIED CHICKEN
This is nothing at all like the Microsoft situation.
Richard Solomon
www.FranchiseRemedies.com
The UPS Store was going to be BIG in Business Document
The UPS Store was introduced in 2003 with advertising that these stores would offer small corporate business and document services, etc..again to compete with the capabilities of FED-EX Kinko.
I'm not sure The UPS University turned out any experts but all their franchisees leased color copy machines, etc... that didn't even pay for themselves, let alone make any money, as I understand.
A while back, FedEX, in Fortune Magazine, said the the individual consumer market for copy and print services was diminishing because of computers and their capabilities but that FedEX was actively going after the corporate business services for their FedExKinko Stores and opening up some smaller stores.
Looks like FedEx has buttoned down that market and now what will MBE-UPS tell their franchisees to do to stay in business? Just more bad brown stuff for The UPS Store Franchisees.
THOSE GLORIOUS 60s
I really miss the 60s. Everybody was suing everybody. Even franchisees could occasionally afford a good lawyer. In one case with 127 plaintiffs all over the country, I took all the dpositions all over the place - all on my motorcycle. Started in North Miami Beach and went all the way to Seattle, Chicago, Philadelphia and Atlanta. The opposition in one case started a rumor that the Hells Angels were representing my client.
Nowadays it's tough to find a franchisee who can afford representation. The really smart ones I can get out without a fight most of the time. If you never try cases, people don't see you as much of a threat. If you are known to love it in conflict, settlements happen more quickly. Apparent implacability and a client who can afford to fight are the best ingredients to settlement. I'm really a sweet pussy cat myself, but I can't afford for folks to see that side. You can see it in the Muldoon Cat stories, but almost nowhere else. Now that I don't drink martinis like I used to, I'm even meaner. They'll probably have to just lock me up if I ever have to forego sex.
Too bad the guy at Adobe is do damn smart. I'd really enjoy a good fight. He will probably do something sensible and ruin it for me. Oh well.
There was one case many years ago where I was living in a car for months going around fighting off newly filed cases and motions for restraining orders trying to put my clients out of business. I kept a case of Mondavi Cabernet in the car to enjoy along the way with the quarter pounders (with bacon and cheese) and the chicken. AH !! Those were the days
Richard Solomon
www.FranchiseRemedies.com
Adobe Anti-Trust
From today's WSJ
"Adobe is important to printing outfits because many of them now get much of their business directly from the Internet and computerized documents, rather than from walk-in customers. "Our members frankly feel betrayed," says Joseph P. Truncale, president and chief executive of the National Association for Printing Leadership, which he says counts about 3,400 printers, designers and graphic-arts companies as members.
Some critics liken the situation to a scaled-down version of the "browser wars" of the 1990s, when a U.S. Justice Department antitrust suit addressed Microsoft Corp.'s tactics in bundling its in-house Web browser with its ubiquitous Windows operating system, an attack on rival Netscape Communications. With Adobe, similarly, it's about "just not having a choice," said Ray Fusco, a vice president with printing and business-communications company RedmondBCMS Inc. in Denville, N.J."
Michael Webster PhD LLB
Misleading Advertising Law
NOPE - NOT AN ANTITRUST CLAIM YET
Super popular and successful product ties up with a single distributor/customer to the exclusion of its competitors who would dearly love to have access to a similar program = Not an antitrust problem/claim without a great deal more elements.
Saying"Microsoft" doesn't make it a Microsoft case.
I would dearly love to have the defense of this one. It is not just that the burden of proof is on the claimants - which makes it tougher by far. It is also a matter that this one is extremely winable on the merits if one develops the merits properly.
The Devil really is in the details here.
If I correctly understood Adobe a week ago, their management is smart enough to want to find some accomodation route - assuming that their contract with Kinko leaves such a route open. Smart people with constructive attitudes do more to rob antitrust lawyers of evergreen cases than anything else.
Richard Solomon
www.FranchiseRemedies.com
Adobe
When I first read about the Adobe move, I thought that it was a very clever hook-up with Kinkos -actually using a network effect that wasn't highway!
Now, I wonder -isn't the Kinkos part just taking about the bite that the Fedex part would have had for shipping?
Michael Webster PhD LLB
Misleading Advertising Law
That is an interesting
That is an interesting thought. I hadn't thought of it that way.
But....
if you are sending the pdf TO Kinko's isn't it for printing?
(and then possibly mailing/fedexing?)
If you were using the pdf to send a document, you would use your email
and not have a need for the print to fedex button?
NOT REALLY
FedEx isn't a "print shop"/document management business. It's a shipper.
The complaint is that Kinko's, the document management business, has the Adobe hook-up advantage.
Does the Kinko/FedEx relationship add something to any issue from an antitrust perspective? I don't have information that would inform me about that, but my viscera rather doubt it. I see an obvious deep pocket parent, and while everyone suspects deep pocket parents, I find nothing probative about wealth per se.
I am extremely reluctant to look at things like size and market percentages and to infer from that something like monopolistic intent or effect. I need to see predacious conduct to even think of going there.
Under Section 2 of the Sherman Act dealing with attempt and intent to monopolize and with monopolization, there is a requirement of size, evidence of predacious intent, action taken in furtherance of that intent, and likelihood of monopolistic achievement.
Microsoft had the appearance of all of those elements. Adobe doesn't seem to get there.
As for some monopolistic agenda on the part of Kinko - FORGETABOUTIT. This deal gives FedEx a competitive advantage. I know of no evidence from which one might conclude that the advantage is decisively injurious to the other print shop/document management businesses or even how durable such an advantage might be in Kinko's favor.
It is significant that the quick printer companies - mostly over the hill/asleep at the switch franchisors - are not the only other elements in the printing and document management industry. The industry is much larger, and there are substantial competitors in it other than these whiners.
Richard Solomon
www.FranchiseRemedies.com
PDF Printing
Why not just print the file at the nearest FedEx Kinkos's and minimize shipping?
Michael Webster PhD LLB
Misleading Advertising Law
Anti Trust Concerns
The print shop business is ripe for a "roll-up". I have never seen how this could be done before, before the Adobe -FedEx/Kinkos deal.
Can it be done without attracting DOJ interest? Probably, in the short term. But then again, it depends on what the DOJ or FTC thinks the market is? Whole Foods may bring on an entirely different way of looking at what the market is.
I just wouldn't write this off, until we see how it plays out.
Michael Webster PhD LLB
Misleading Advertising Law
Why PDF to Kinkos makes CENTS!
PDF (Portable Document Format) is simply a means for digital file exchange. The file is a self-contained electronic document that any computer user can view or print, regardless of the hardware, software, or operating system used to create the original document.
So as has been suggested here, if I'm converting a small test document or spreadsheet in a program like MSWord or Excell, I would probably simply convert to PDF and then email the document.
HOWEVER, if I am printing a 64-Page full color brochure or proposal with 27 8 x 10 color photographs complete with charts and arrows and a pargraph about each one (borrowed from Alice's Restaurant), it's probably not something that you would want to send as an electronic file. Your client or prospect receives it and uses $100 worth of toner to print a lousy dot matrix copy. Or hits DELETE and begins to review the proposals of your competitior who overnighted professionally printed and bound copies.
We have a 400+ page book which we provide to our subscribers electoronically as an e-book throught the password protected subscriber section of our website. However it is available as printed product to Subscribers and Non-Subscribers for a fee. When it is ordered, the a PDF version of the book is automatically transmitted to the Office Depot location nearest the customer, and the customer can pick it up in 1-hour or have it delivered overnight the next day to their home or office.
Not only does the PDF technology eliminate the concern about compatibility between the programs used to create with the programs being used to print ... but the resulting file is 10x smaller than a TIFF file, which results in fast transmissions and downloads over the internet.
Of interest to our Legal Begals: Many court systems are now encouraging/requiring attorneys to file court documents -- all pleadings and their attachments via the internet. The new docketing and case management protocols only accept PDF. So if you're currently creating TIFF docs, you may wish to consider converting to PDF.
Believe & Succeed,
Dale
FranSynergy, Inc.
Synergizing Franchising!
www.fransynergy.com
DOJ? YOU GOTTA BE KIDDIN
The quick print folks don't pony up enough money for political action to attract the attention of the Justice Department or the FTC. To get enforcement off the dime at the federal level, you need to have a senator/powerful congressman on the committee that approves the DOJ/FTC budget "motivate" the enforcement agency.
Nowadays, the entire federal enforement resources are in the pockets of the industries they regulate. It is more cynical than you could possibly imagine. If there is to be any action, it will be private action or nothing at all.
The federal government, for example, prohibits our buying pharmaceuticals in Canada at lower prices because "Canadian pharmaceuticals can't be relied upon to be efficacious." Social Security administration is forbidden by law to bargain for group buying power pricing with drug companies. The Iraq war is now only a rip off for Halliburton, KBR and similar "contractors" who make big political contributions to the Republicans. As for merit review of anything - FORGETABOUTIT!
I agree that the quick print business is ripe for rollup. It is an over the hill business. That situation is in itself a point in favor of the Adobe-Kinko deal from an antitrust perspective.
Richard Solomon
www.FranchiseRemedies.com
Fearless Richard
I have great admiration for Richard Solomon who is not intimidated and who will throw rocks at the DOJ, who deserve the rocks.
Quick Print Market
Richard said: "I agree that the quick print business is ripe for rollup. It is an over the hill business. That situation is in itself a point in favor of the Adobe-Kinko deal from an antitrust perspective."
I agree with that, unless the quick print business becomes the market. Let's see how the FTC's action on Whole Foods plays out,
Michael Webster PhD LLB
Misleading Advertising Law
AND ANOTHER THING
Don't forget that the DOJ is run by our beloved Attorney General, Shyster Al Gonzales - who really isn't any better/worse than the shyster attorney general under the Clintstones, Webster Hubbel, convicted of cheating his clients - disbarred - sent to prison.
People's expectations of their government are so fantastically absurd.
Richard Solomon
www.FranchiseRemedies.com
RELEVANT MARKET FOR ANTITTRUST MEASUREMENT
The relevant market will not be the quick prinbt market. In an extreme situation (not present here) that could be a relevant sub-market.
The relevant market would be defined to contain all those who provide services that are provided by quick printers, even if the others also provide other services that quick printers don't provide.
Under the narrower theory, any intersection of any metropolitain area could become a theoretical relevant sub-market so long as there was at least one quick printer on one corner of that intersection.
Richard Solomon
www.FranchiseRemedies.com
WHOLE FOODS - HAHAHAHA
The Whole Foods FTC fiasco is only a product of the big mouth of the CEO of Whole Foods who, to manipulate the stock price of the to be acquired company downward and cheapen the cost of the acquisition, ran his mouth denigrating that company for some time prior to the acquisition.
Typical scenario of an arrogant putz running his mouth with no sensitivity to any enforcement issues relative to the situation he is creating. His lawyers had insufficient rapport with him to be brought into the loop before he shot his mouth off. It's a clusterfuke that can be resurrected by his hiring a very politically connected law firm to "fix" the problem.
Richard Solomon
www.FranchiseRemedies.com
What is the Market?
I guess that we will find out, when the FTC's motion is heard, which will be argued on July 31st, 2007.
But I thought that John Arden at Trade Regulation had a valid point, franchisors may become exposed to anti trust concerns if the FTC's method of defining the market is accepted, see Whole Food
Michael Webster PhD LLB
Misleading Advertising Law
FTC MARKET DEFINITIONS
We will probably never know whether any market definition by the FTC (in the Whole Foods matter) has precedential value. If the FTC does a number and defines a market narrowly, the acquisition will be scrubbed. It is highly unlikely that the merger would close with a divestiture potentiality hanging there while the FTC fiddles with it for a few years, and then through an appeal to the D C Circuit Court of Appeals if the FTC were to rule against the merger.
If they can't quickly cop a plea to some partial and insignificant divestiture of some appendage of the resulting company, they will invoke the "no threat" clause in the acquisition that permits termination if the transactions contemplated by the agreement are threatened by the prospect of litigation.
Every super market is now establishing an Organic section, and the organic sections are becoming larger and larger, with house brands of Organic products also becoming popular.
That means that whatever Whole Foods' market position might have been six months ago, the dynamics of Organic products retailing are changing in a direction away from the notion that Whole Foods, by acquiring this company, might have some tendency to lessen competition. All the chains installing Organic sections are much larger than Whole Foods.
The definition of Organic is also changing, thanks to lobbist money, so that the notion of Organic is rapidly being diluted. FDA food standards are always eroded in that manner. As the demand curve for Organic food grows, the value of being able to label something Organic brings lobbist money into action to loosen the FDA standards regarding what can be labelled Organic. GOODBYE WHOLE FOODS MARKET POWER.
I don't know whether you follow U S politics, but the term Whole Foods now applies to Barak Obama. He is referred to as the Whole Foods candidate. The epithet is meant to suggest that the ratio of white voters who are sufficiently enlightened so that they can look at the man and not at his skin color to the voting population as a whole is about the same as the ratio of Whole Food shoppers to the overall grocery store shopper population. Some more open minded white folks might vote for him, but Joe Sixpack aint there yet. Joe Sixpack also hates Hillary, but would rather have Bill Clinton back after all this time with the onus of the religious right having infected the American conservative movement.
Joe Sixpack has an enormous dilema. He doesn't favor evolution, with the notion that his ancestors may have been apes, but he also doesn't favor restrictions on promiscuity either.
Richard Solomon
www.FranchiseRemedies.com
Richard writes:
Richard writes:
Some more open minded white folks might vote for him
My reply:
Some of us open minded white folk supported Alan Keyes and witnessed one of the most brutal intellectual beatings I ever saw adminstrered when Obama debated Keyes. Obama stood revealed for the half-backed intellectual light weight he is. If it was a boxing match the ref would have stopped the fight. What Hillary needs to do is get a hold of that footage and use it in commercials.
It was to IL detriment and the country's that Keyes lost this election, he would have been a fantastic statesman; instead, we are stuck with the man-cub, who, in my opinion like other child stars ,rose to the top too quickly and as a result of his stardom will forever remain immature and never ascend to full adult compency.
But I digress...
FuwaFuwaUsagi
FTC Market II
Richard writes: "We will probably never know whether any market definition by the FTC (in the Whole Foods matter) has precedential value. If the FTC does a number and defines a market narrowly, the acquisition will be scrubbed. "
If the FTC wins the injunction, and there is no appeal, the FTC's market definition will have great practical implications -notwithstanding what ever may happen to organic market.
Michael Webster PhD LLB
Misleading Advertising Law
UNAPPEALED FTC PRELIMINARY INJUNCTIONS
Interim agency issued injunctions have no precedential value whatsoever.
Richard Solomon
www.FranchiseRemedies.com
Digress
"he (Keyes) would have been a fantastic statesman" - Fuwafuwausagi
Gag!! I just lost my breakfast.
Keyes is an expert at putting his foot in his mouth at both the presidential and senate races.
You may recall when Keyes lectured Obama on how God is displeased with Obama and his public positions that the Bible decries. I loved the part where young Obama said to Keyes, "you aren't my minister, and I doubt that the people here want to elect you to the senate to be their minister."
Priceless. And I'm a conservative! During those debates, a young senator's star (unfortunatley a liberal star) began to rise higher...
...Now back to more pleasant topics - franchising.
We can disagree, I thought
We can disagree, I thought Keyes was brilliant in those debates and revealed Obama to be the intellectual light weight he is. Having met Obama on several occassions and Keyes I'll stand by my comments.
Regards,
FuwaFuwaUsagi