Special Report: Offset and Beyond -- Today's Model: Distribute-Then-PrintApril 2009 By Cheryl Adams
PI: Where do you see the graphic arts industry in five, 10 years?
Kelly: Well, it’s tough to think in years when we’re reacting to daily economic impacts. Unfortunately, there are a couple of negative trends at work pushing the industry apart. First, we are a fragmented industry made up of many small companies that tend to be cannibalistic, especially in tough times. Absent of any GDP growth, the only way to increase sales is through capitalizing on our competitor’s misfortunes. Price erosion is rampant right now with customers asking for retroactive price decreases. And, we all know who wins in that game—the customer and not the printer.
The second trend is the accelerated shift taking place with buyer’s mindsets around print buying and manufacturing. Print-then-Distribute used to be the best economic business model; but now, with the huge installed base of digital equipment, workflows and knowledge, the business model has flipped to Distribute-then-Print. This tipping point takes an already fragmented industry to the next level.
What surprises me most right now is how fast digital technology is going beyond attacking sheetfed offset printing to competing directly with heatset web offset printing. We’re seeing this play out in web printers’ financial results, as well as in the decreased number of print businesses. For example, healthcare directories that were traditionally web work, are now being produced digitally. We’ve seen static directories containing 900+ pages of information change overnight to 24-page variable digital printing—totally personalized and customized to the end recipient. Albeit a great example of being more “green,” the instantaneous page reductions indicate a steep slope of declining print demand.
PI: What about future industry consolidation?