Paperloop.com - leading the pulp, paper, packaging and printing industry

MAYNARD H. BENJAMIN
is the president of the Envelope Manufacturers' Association, a position he assumed in October 1994 after having been the executive vice president of the association since January 1990

Paper: The currency of the electronic era

By any standard, the number of people on the internet is evidence of impressive growth and public acceptance. At the same time, it is important to see Web growth in perspective. No major newspaper, magazine, book publisher, or catalog company has sold its presses and gone online exclusively. Instead, what we are seeing is the addition of online capability to complement existing products and services.

The great irony of the electronic era is that much of its potential would be lost without paper. In case after case, we have found that Web activity generates increased demand for paper, packaging, catalogs, literature, and postal services.

Given the enormous size and diversity of paper-based products and services, it is not surprising that some segments of the industry are growing in the face of online competition, and also that some are not. We can see directory and encyclopedia publishers turning to the Web, print catalogs opening Web sites, and more competition for first-class mail volume.

But for all the good news emerging from online companies and promoters, the fact remains that the Web as a medium and a commercial resource cannot succeed until six major questions are resolved:

Where is tomorrow's growth? The days when a large pool of "early adopters" could be brought cheaply online is at an end. Finding new Web subscribers will be increasingly expensive and difficult.
Where is the money? The best part of the Internet for consumers is the constant competitive process that drives down prices. Unfortunately, lower and lower prices ultimately stifle competition. With Internet browsers, for example, the price has been driven down to zero and there is little likelihood–if any–that new competitors with better technology will emerge.
How secure is the Web? The Washington Post reports that $7 billion will be spent on Web security by 2000, and with good reason: as email shifts from plain text to HTML coded text, photos, and audio, new opportunities to spread viruses and Trojan horses emerge.
Who owns the data? While the Internet may have value as a source of "data mining," there is a growing public preference for privacy and anonymity.
Who gets taxed? It's unclear which tax policies should apply online, who should collect the money, or if there should be more than one collector.
Which rules apply? There are no Internet borders, and attempts by one nation or local jurisdiction to control the Internet are likely to fail.

Any review of economic history will show that paper and electronic media have been engaged in a sharp rivalry for decades. We compete each day for turf and territory, and the emergence of the Internet is merely a new twist to an old story. Wasn't there once talk explaining in great detail how the telephone, an electronic medium, would eliminate the need for the Postal Service with its stamps and envelopes? What about the fax machine? Invented in Europe in the 1840s by Alexander Bain, this device would seem to be the obvious replacement for letters sent by mail, and yet such a wholesale replacement has never taken place. What about radio and television? Being quick and cheap, weren't they supposed to supplant newspapers and magazines?

Between 1990 and 1998, annual paper consumption rose to 99 million tons from 86.8 million tons, according to the American Forest & Paper Assn. Even the use of paper checks is increasing, going from 57.5 billion in 1991 to 66.09 billion in 1997, according to Federal Reserve estimates.

Our goal is to promote the use of paper-based products and services to the public, the media, and other forums. We want people to understand that in the electronic economy now emerging, there is a place for both electronic media and for the products and services we offer. We also want to ensure that, as the Internet grows, opportunities for our industries will grow with it.

PaperCom, a lobbying organization for the paper industry, is necessary because in an ideal world millions of informed choices would create natural marketplace trends and patterns. But the world is hardly ideal and there are substantial efforts to tilt the marketplace. We see, for example, efforts to provide tax preferences to Internet providers, to free them from the costs paid by competing media. We see institutional efforts to require the use of electronic media without considering overall costs, long-term data retention, or personal preferences. We see efforts to devalue national postal systems which are at the heart of modern-day business and will be for decades.

Paper is truly the "currency of the electronic era," and efforts to unfairly, unreasonably, and artificially reduce paper usage will lead directly to reduced economic growth and constricted development. We must make it our obligation to ensure that negative impressions regarding our industry are not allowed to go unchallenged, and that positive realities are well-known and accepted.