The Dichotomies of the Global Printing Industry
By Frank Romano, USA
We are currently experiencing a period of significant change as technology, transportation, and global competitive forces combine to challenge all printing companies no matter where they are on this planet. These opposing statements may help to describe the global printing industry:
1. All printing is local, except when it is global.
2. All printing is monochrome, except when it is in color.
3. All printing is conventional, except when it is digital.
4. All printers are printers, except when they are in-house or office retailers.
5. All printing is placing a substance on a substrate, except when it is ancillary services.
6. All printing is based on a page, except when it is something else.
7. All printing is done in weeks, except when it is done in days and hours.
8. All printing revenue is from the pressroom, except when look at the big picture.
9. All printers are small, except when they are very large.
10. All workflows are for printing, except those e-publishing.
1. All printing is local, except when it is global
In 1980, 70 percent of all print products were purchased from a printing company within 100 miles of the customer. Today, it is 45 percent and dropping. The ability to send files electronically and collaborate on-line on document changes and proofing, has made the physical location of the printing company less important. Thus, printers in the United States are doing business in many states beyond their own and are capable of producing print products for customers outside the country. Usually, U.S. print buyers purchase print products in Canada, the UK and the Far East.
The same is true in Western Europe where print buyers purchase print products from Estonia, Poland, and other Eastern European countries. It is said that the reason involves labour costs. Considering that paper and labour costs have the biggest share in the cost of a printed job, any printer in any country that has an advantage in these two areas, has an advantage on a global level, in addition to access to a local market.
Asia-Pacific is expected to be the fastest growing market. In Asia, publication and commercial printing is a growing business fuelled by developing markets such as China and India. Printing in Asia is ready for a period of dynamic growth, driven partially by high-end packaging applications, especially in Vietnam, Philippines, Thailand, and Malaysia.
The one technology that profoundly changed the printing industry was the electronic delivery of files. In the past, the originator delivered a manuscript for conversion to type and then saw proofs; later he or she delivered mechanicals and then saw proofs. The printer controlled the prepress process and then desktop publishing became mainstream and the printer lost that control. This loss coincided with the evolution of the personal computer, “shrink-wrapped” software, and the standardized page description language. Jobs could be designed and produced by the originator and then sent to any printing service - or, to an in-house printing device. In the past, the printer controlled the metal and later the film: the printer essentially “owned” the job. Today, the customer owns the job and they can send it to any printer, anywhere on the planet.
2. All printing is monochrome, except when it is in color
The letterpress printing age began with Gutenberg and lasted into the 1970s. Offset litho took 70 years to commercialize and within a decade, it replaced letterpress. Within a decade after that the number of pages in color exploded. In 1970, most pages were black and white. Now almost all newspapers have shifted to color reproduction, primarily for advertising. Color is also splashed on every page of magazines and catalogues. It is hard to find a page that is not in color. Full color is growing from 58 percent today to 85 percent of all print pages by 2020. We will need better ways of managing color, as print competes with electronic media. We will need more effective color workflows. Color printing also includes spot colors, such as Pantone. Most offset printing machines have printing units for such spot colors; most digital printers do not.
The conversion of transactional documents from monochrome roll-fed printing on pre-printed stock, to high-speed roll-fed toner and especially inkjet printing, will see replacement of thousands of black-only printers, so that transpromo documents can be printed. According to a recent EDSF study, the number of colored marketing documents is growing steadily. Today, full color represents 59 percent of all coverage.
3. All printing is conventional, except when it is digital
Digital printing was born in the late 1970s and digital color was introduced in 1993. The technology was toner. Today, there are major improvements in inkjet printing. Inkjet poses a threat to toner-based printing. Its goal is to achieve speeds that compete with printing machine productivity.
Although some experts were overly optimistic about the rate at which digital color printing would be accepted, we now see that this technology considerably influences the printing industry. Toner- and inkjet-printing require no setup and are thus almost instantaneous in production. Over the next decade ink-based printing will yield some volumes to digital printing technologies. Digital will not replace litho, but it will take volume away. Today several forces are merging:
• The print buyers’ move to shorter runs
• The move to tighter schedules
• The move to target marketing
• Equipment cost and performance coming into harmony
Half of all printing will be done on digital printing machines by 2020. Variable data printing remains a key driving force in the industry, but turnaround times and run lengths are important considerations. Marketers have long been sold on the significant additional returns gained from the customization and personalization of marketing content.
The Dutch company TED Gigaprint delivers profitable, low-cost, Internet-based printing of digital photo albums with a business-to-consumer application. Like ColorCentric in Rochester, N.Y., they are printing photo books - one of the fastest growing digital printing markets.
4. All printers are printers, except when they are in-house or office retailers
Because digital printing reduces the complexity of the printing process, new kinds of printing services arise. Retailers of office supplies now have extensive digital printing services. This trend will affect so-called quick printers. At the same time, in-house service departments install the same technology as commercial services. This means that print moves beyond the commercial service.
5. All printing is placing a substance on a substrate, except when it is ancillary services
Most of the growth in printing industry revenue during the last few years, was not due to growth in putting ink or toner on paper. It was due to the creation of new services, such as mailing, fulfillment, database, and other services complementary to printing. It costs less than $0.35 to print a magazine issue, but over $0.42 to mail it. As the prices for petrol and postage increase, a key challenge for publishers is how to lower these costs.
In the U.S., the costs for postal delivery are reduced by trucking print products closer to geographic markets, by mixing catalogues and periodicals going to the same area, and other preparation services. Database services have increased revenues, as more of what printers print is derived from electronic databases. Japs-Olson, Minnesota, has grown from a local to a national printer because of its advanced database, mailing, and fulfillment services. “We reinvest in our equipment to offer more than what our competitors can,” said Michael Murphy.
6. All printing is based on a page, except when it is something else
The printed page is only the tip of an iceberg. There are labels and folding cartons, and plastic cards, and coupons. These are all non-page oriented and represent areas of growth. Industrial printing is adapting digital technology in the form of flat-bed inkjet printers for signage, point-of-purchase displays, and textile printing.
7. All printing is weeks, except when it is days and hours
As print runs get shorter and customer schedule demands increase, more printing may have to remain closer to home. Printers have already seen the nature of their work volumes change. Shorter runs (under 2,000 copies) and time-sensitive (less than two days) print jobs will not lend themselves to off-shore production: A typical U.S. printer plans print jobs for delivery in four weeks or less, while Asian printers deliver goods back to the U.S. in eight weeks or more with savings of 30 percent of delivered costs.
Of all printed work, by revenue
Short run and time sensitive...................45%
Short run and not time sensitive...................9%
Long run and time sensitive...................34%
Long run and not time sensitive...................19%
Not classifiable...................3%
Thus, less than one third of all printing may be applicable for offshore printing.
Globalization of print buying migrates from a local, regional, or national model to a worldwide or global model. Forty-four percent of major print buyers surveyed believe there is a trend within their company towards purchasing print globally, and that there will be an impact on printers and the print supply chain. Turnaround time is set to become even more vital as customers squeeze more time from their printing partners. Currently in the U.S., 8 percent of work is demanded within 24 hours and this is expected to rise to 30 percent in 2020.
8. All printing revenue is from the pressroom, except when look at the big picture
The revenue of the worldwide printing industry amounts to about US$1.1 trillion.
Creative services for print...................7.6%
Print-related paper and consumables...................2.9%
Print and related equipment and software...................2.0%
Equipment maintenance and service...................0.2%
Print buying, administration, consulting...................0.1%
Prepress, printing and finishing...................70.2%
Distribution and storage of print products...................16.7%
Print-related training and education...................0.3%
Of this revenue, print falls into three categories:
Packaging printing...................36%
“Commercial” printing...................38%
Industrial printing...................26%
Some packaging printing is buried in “commercial” and some industrial printing may be categorized packaging. “Commercial” printing is a large array of printed products.
Informational...................41%...................Documents, books, periodicals
Promotional...................32%...................Catalogs, direct mail, brochures, collateral material
Some packaging...................10%...................Labels, folding cartons, corrugated, flexible
Product...................17%...................Plastic cards, signage, RFID, manufacturing components
The global market is currently entering a stage where large print buying organizations demand that their “printers” are able to be electronically linked and add value from design and print, through to the distribution of information, whether on paper or otherwise. Asia will be the largest source for paper in 2010, with over 50 percent of all demand. That’s 50 percent of 400 million tons of paper.
9. All printers are small, except when they are very large
We are seeing the rise of the mega printer. Technology is killing the cottage print industry. In the U.S., there are currently 38,000 companies in the graphic arts sector (pre-media, printing, repro, and finishing), of which less than 10 percent account for over 60 percent of all print revenue. 80 percent of these companies account for less than 20 percent of print revenue.
The trends shaping the printing industry influence the advertising, marketing and publishing industries and affect and are affected by technology, processes, and products. The rise of the Internet and the ability to be able to distribute vast quantities of data to diverse locations has taken the distance out of printing. The originator can be remote, the printer can be remote, and the customer can be remote.
It was not Computer-to-Plate (CTP) that changed the world. CTP is merely the tip of a giant iceberg called “workflow”—one level of process automation. Through the 1980s and 1990s, film was a primary manufacturing medium for printers. All pages eventually wound up as film negatives which were required to make plates. Pre-media services converted art and type to film and then “stripped” it up (assembled it) into composite form. For printers, film could come from outside sources and this was especially true for publication advertisements. When all film units had been assembled, they were used to expose printing plates.
CTP requires all page content in electronic form. Since CTP systems were installed at the printing company, many content originators switched to dealing directly with the printer instead of the pre-media intermediary. CTP grew slowly from 1993 to 1998, but has exploded in the last few years, thus removing page volume from pre-media services. Today, CTP is mature and the majority of medium- and large-sized printers have implemented the technology.
10. All workflows are for printing, except those e-publishing
JDF and XML are the key acronyms of the future. XML will allow document encoding for re-purposing across multiple media as well as workflow automation. JDF will allow more integrated workflows, including the advance of the Internet into job specification, ordering, and tracking.
This e-commerce element includes the use of XML allow customers to submit and receive their own quotations, to submit, edit and proof files online in a matter of minutes rather than days, and to track jobs through the factory.
Advertisers are also in for changes. Most magazines now only accept advertisements in Portable Document Format (PDF) format. This is not only to receive secure closed files, but to prepare for the Internet as a key content delivery vehicle. Most printed work now is re-used for the Web.
