by Robert Palmer | 9/2/15
On September 1, HP announced that it has expanded its Instant Ink replacement service to include several new printer/MFP models. In addition, the firm has made advancements both in technology and service delivery, which it believes will improve the overall user experience and help drive further program adoption.
HP’s Instant Ink program allows customers to purchase replacement ink supplies through a subscription-based service, as opposed to purchasing on a transactional basis when needed. When introduced in late 2013, HP positioned the Instant Ink program as a fundamental pivot to its business: moving from its traditional razors/blades transactional model to a subscription-based program that stresses lower supplies costs and added convenience.
According to HP, the program has been very successful and has achieved several important milestones in terms of adoption and retention rate. As of August of this year, HP now has 675,000 subscribers to the Instant Ink program, adding one new customer to the program every minute of every day. The new subscriber rate is quite impressive on its own, but when you consider a retention rate of 97 percent and the fact that customers can opt out of the program at any time, it takes on greater significance.
HP claims that the Instant Ink program is one of the fastest growing web-based paid services on the market, reaching a half million subscribers sooner than other popular services such as Spotify, Dollar Shave Club, Netflix, and Hulu. HP hit the mark in only 20 months, while it took Netflix 30 months to do the same. “This is really pushing us toward the future and we think this is where the future is going in terms of print,” says Thom Brown, ink technology specialist and resident “inkologist” with HP. “With this many users, it shows us that we are striking the right chord.”
The fundamentals of the Instant Ink Program remain unchanged. Customers acquire an Instant Ink compatible printer and then sign up for a service plan based on how much they want to print. HP offers monthly plans ranging from $2.99 per month for up to 50 pages, $4.99 per month for up to 100 pages, and $9.99 per month for up to 300 pages. With its latest announcement, HP is offering the choice of one- or two-year HP Instant Ink plans that will only be available for two specific MFP models.
Once enrolled in the service, the customer never needs to worry about replacing empty ink cartridges. HP monitors the device remotely to determine when ink levels are getting low and automatically ships new cartridges to the customer before the old ones are completely depleted. According to HP, the service lowers printing costs by up to 50 percent, eliminates apprehension associated with running out of ink at a bad time, and helps save the environment. The Instant Ink service provides prepaid envelopes so that users can return used cartridges for recycling.
“Smart Cartridge” Improvements
Although not discussed in the press release, HP has made several improvements to the smart cartridge technology used in its new Instant Ink products. The new #63 ink supply cartridge includes features that improve performance, end of life experience, ink monitoring, security, and color usage.
One new capability, which HP refers to as the Sharp end-of-life (out of ink) experience, provides a more accurate method for measuring ink remaining in the cartridge. In the past, as printers began to run out of ink users would experience certain print quality issues, such as color fading or banding. After printing for some period of time those anomalies might disappear, only to emerge again a few pages later. This can be a frustrating experience for users, making it difficult to decide exactly when to replace an old cartridge with a new one. Technology advancements have allowed HP to make better calculations when it comes to ink level monitoring and determining out of ink status.
Similarly, a new feature called HP Active Ink Balancing Technology addresses concerns around ink usage with tri-color cartridges. HP has moved to an Integrated Print Head (IPH) design with its consumer-class products, which basically just means that the print head is integrated with the ink tank. For the tri-color cartridge, there are separate ink tanks for each color, but each tank (cyan, yellow, and magenta) are all integrated together with the print head as a single cartridge.
Using Active Ink Balancing technology, HP has improved ink monitoring with the ability to more closely determine how much of each ink color is left in the tricolor integrated cartridge. By monitoring the three colors independently, HP can determine if one color is depleting faster than the others. In addition, the technology can make slight adjustments to color usage and slowly transition to a point where the color usage is balanced. “This is a cool new feature that addresses the last concern of the IPH cartridge design,” Brown says. “It relieves the issue of using one color so much quicker than the others, and then needing to dispose the entire cartridge before all the ink runs out.
Of course, changes in color balance could have an impact on the machine’s ability to produce consistent color matching, but Brown says that the adjustments are so minor and spread out over long periods of time, so users are unlikely to see any differences. Even so, HP offers the ability to turn off the Active Ink Balance feature should a user experience color matching problems.
Instant Ink Ready
HP has introduced six new models for its Instant Ink program. Without a doubt, the most interesting aspect of these new machines is the fact that they are now Instant Ink Ready, as opposed to just Instant Ink Capable. The difference is subtle but nonetheless very important, both from an end user perspective and from a strategic point of view. The previous Instant Ink capable models were basically just as they are described, capable of accepting the special Instant Ink cartridges.
Historically, to sign up for the program users were required to purchase an Instant Ink capable machine and pick up an enrollment kit at the retail store. The printer could then be installed and set up using the normal process, and the user would enroll the printer online using a special enrollment number that was supplied with the kit. After that, new Instant Ink cartridges would automatically be sent when needed.
With the new Instant Ink Ready models, there is no need to pick up an enrollment kit. Instead, the Smart Cartridges that come with the printer can turn on Instant Ink using an electronic switch. During the installation process, the user is notified that it has an Instant Ink Ready device and asked if it wants to enroll in the program. If they choose yes, they are immediately directed to the online enrollment process, and the ink cartridge is electronically switched. If the user chooses not to enroll in Instant Ink, the cartridge simply behaves like a standard host supply item.
The final, and perhaps most important element of HP’s latest announcement, includes two new models that HP calls Instant Ink Bundles. For the first time, HP is offering the choice of one- or two-year HP Instant Ink plans out of the box. In other words, customers can pay an upfront fee that includes the cost of the printer and up to two years worth of ink. The one-year plan has a price of $199, while the two-year bundle sells for $299.
According to Brown, the bundle products basically work like an Instant Ink gift card. Customers who purchase the one-year bundle receive a printer that ships with a $120 prepaid Instant Ink gift card in the box, which would allow for a full year under the 300-page Instant Ink plan. Likewise, the two-year bundle ships with a $240 prepaid Instant Ink card. However, customers are not required to sign up for the 300-page plan. If they choose to sign up for a lower tier plan it would simply mean that they could receive enough ink to last well beyond two years.
Brown notes that the bundle program is being offered publicly but HP is basically treating it as a pilot program. Just as it did with the initial Instant Ink program, HP wants to evaluate customer reaction and traction with the bundle option before making a determination about offering it with other models or under different pricing plans. Regardless, Brown says that HP is doing all it can to provide customers with a choice as to how they want to acquire print subscription services.
HP has announced six new Instant Ink Ready models. The ENVY 4520 All-in-One Printer, ENVY 5540 All-in-One Printer, OfficeJet 4650 All-in-One, and OfficeJet 3830 All-in-One each support the monthly Instant Ink pricing plans. The OfficeJet 5741 bundle offers one year of HP Instant Ink in the box, while the OfficeJet 5743 bundle model offers two years of HP Instant Ink.
For more on the HP’s latest announcement, see press release here.
It is interesting to see just how far and how quickly HP has progressed with its Instant Ink program. Clearly, customers are attracted to and interested in subscription-based printing services. If other vendors were to jump on the bandwagon these services could significantly disrupt the traditional business model. So far, HP has focused primarily on the home and SOHO markets, but not entirely.
About this time last year, we noted that HP was testing a pilot program called Instant Ink Professional, which leveraged Officejet Pro X MFPs to offer tiered pricing plans based on print volumes that would be more attractive to small business and office users (see story here). HP discontinued that program earlier this year, although Brown says that HP has not abandoned the notion of Instant Ink for the office. Rather, the firm is evaluating data captured from the pilot program to determine future opportunities.
One thing is certain; HP now has an infrastructure and backbone in place to offer subscription-based printing services in a variety of ways and with seemingly endless options in terms of pricing and delivery. Indeed, Brown talks openly about the flexibility and scalability of the Instant Ink platform both as a strategic and competitive advantage. HP can make program changes quickly to respond to market demand or competitive pressures. Moving to Instant Ink Ready products is another important part of the overall equation. The “electronic trigger” takes the middleman out of the process and brings HP yet another step closer to the customer.
Meanwhile, HP now has monitored devices out in the field, which it could use to make ongoing suggestions and recommendations based on actual usage. It is not doing so now, but HP could begin to promote Instant Ink to customers directly through the printer interface, even suggesting that users move up or down in pricing plans based on print volumes observed over a certain period. Sound familiar? Basically, HP has developed an MPS-ready platform and is now deploying entry-level MPS services for the consumer market. This same type of functionality could be enabled for products aimed at the office but perhaps fulfilled through the channel.
HP’s Instant Ink program demonstrates just how disruptive inkjet technology could become when you look at the overall landscape for printing and print-related services. Other vendors, such as Epson, are leveraging inkjet technology to attack the traditional market by offering ultra long-life supplies and machines that can last for years without replacing ink. The imaging channel should take notice of these trends, not just as a potential competitive threat but instead as an opportunity to pump new life into an old and evolving business.
Robert Palmer is chief analyst and a managing partner for BPO Media, which publishes The Imaging Channel and Workflow magazines. He is an independent market analyst and industry consultant with more than 25 years experience in the printing industry covering technology and business sectors for prominent market research firms such as Lyra Research and InfoTrends. In December 2012 he formed Palmer Consulting as an independent consultancy focused on transformation, mobility, MPS, and the entire imaging market. Palmer is a popular speaker and presents regularly at industry conferences and trade events in the U.S., Europe, and Japan. He is also active in a variety of imaging industry forums and currently serves on the board of directors for the Managed Print Services Association (MPSA). Contact him at email@example.com.