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Introduction The Printing Industry is in the Midst of a Fundamental Transformation By the end of 2005, we will be about halfway through what InfoTrends/CAP Ventures views as a fundamental transformation of the graphic arts industry. This decade-long transformation is having a huge impact on all of the players in this market. While it is unclear what the exact result will be, these types of transformations typically result in 50% fewer establishments and a drastically changed market environment. Digital technology, super-efficiency, and changing business models are all part of this radical transformation, and it’s not just service providers who are at risk. These changes will impact all levels of the market. Digital Production Color is the Growth Engine Production color will continue to be the growth engine for the on-demand market. The most competitive battles will be over unit placements of lower-end products and share of the growing print volume on higher-end products. Most print providers understand the opportunity; the issue is getting them to make investments in digital color. Research data from our recent commercial print multi-client study indicates that print providers will make investments in digital color devices, often at the expense of traditional offset equipment. In fact, the study indicated that survey participants intend to change their print volume from offset to digital. Table 1: Level of Agreement with Statements
Source: InfoTrends/CAP Ventures study, Corporate Print Services: The In-Plant Printing Opportunity The impact of the Internet, as well as the open file format standards that support it, are tipping the balance away from production and giving more power to creatives and print buyers. Improvements in digital workflow management for print production are having an impact as well, and the result is increased use of digital print. No longer is geography a production stopper. Commodity buyers can easily switch suppliers based on their speed, flexibility, and price parameters. The Internet, in combination with JDF and PDF-based solutions, enables better visibility into production cycles for print service providers and their customers. Printers Become Business Communication Service Providers Printers who stick with business models from the past will not be around for much longer. A continued focus on offset printing alone will result in lower margins and less business. Print service providers who ignore digital technology and related value-added services will become extinct. As a percentage of total revenue, revenues from value-added services will increase, while revenues derived from applying ink or toner to paper will decline. Print service providers need to redefine themselves as business communication service providers. Continued Focus on Super Efficiency and Value-Added Offerings will Drive Growth of Professional Services and Enablers Successful service providers will continue to focus on super efficiency in their establishments as a means of reducing costs and stemming the trend of dwindling margins. At the same time, they will be boosting the top line by expanding the portfolio of services that they offer to their clients. This focus will drive professional service opportunities for solutions vendors and systems integrators serving the printing and publishing industries. In addition to the more obvious services that are centered upon integration and customization, there will be a need for consulting services related to business issues such as staffing, internal and external training, and marketing. These professional service engagements will frequently be initiated by an assessment phase, and we will see the growth of production assessment technologies and solutions. We will also see strong growth of enablers such as hybrid offset/digital workflow products and Web-enabled tools, as well as tools that support value-added services such as variable data printing applications. To learn more about these trends, be sure to attend the ON DEMAND Conference & Exposition being held May 17-19, 2005 in Philadelphia, PA. For full conference details visit www.ondemandexpo.com. The preceding analysis was compiled from InfoTrends/CAP Ventures’ Production Workflow Solutions Road Map 2005 and On Demand Road Map 2005.For more information on these and other InfoTrends/CAP Ventures reports, please click here to visit our online store or contact Alison Hipp at , ext. 126. |
