The Survey Says — State of Wide-FormatSeptember 2008 By Tim Greene and Alexis Golini
This allows companies to use the same printing equipment to produce the wide range of applications seen here. In most cases, the only requirement is to change the roll of media.
For those companies that specialize in outdoor materials like banners or vehicle graphics, it may be more cost-effective for them to use a wide-format eco-solvent or solvent printer, which allows them to print onto uncoated materials using less expensive inks. For those companies that specialize in point-of-purchase signs or displays, which often require a foam-core or rigid backing, it may be more cost-effective to use a wide-format UV-curable ink-jet printer, which allows them to print directly onto rigid materials.
With prices for wide-format digital graphics printing ranging widely, it can be difficult to fully recognize the level of business required to make wide-format printing highly profitable. Among the respondents, the mean amount of square feet printed per month is almost 12,000. But the division among the respondents is very significant; almost 36 percent of respondents who offer wide-format services indicate their monthly wide-format print volume is less than 1,000 square feet. Another 36 percent indicated 1,000 to 4,999 square feet. Less than 5 percent produce more than 50,000 square feet.
(See Chart 3.)
Clearly, those with very high print volumes specialize in wide-format print services, and pull up the mean monthly print volume among the respondents. It is important to understand that those with low print volumes could be running at a higher rate of profitability, depending on the prices they can charge for their services.
For example, if you are selling proofs for $15 per square foot and printing just 500 proofs per month, your wide-format printer is enabling $7,500 in monthly revenue. On the other hand, if you are selling banners or building wrap output, on average, for $4 per square foot, you'd need to print nearly four times as much--almost 2,000 square feet per month--to drive the same $7,500 in revenue.
There is no question that wide-format printing can drive a significant amount of additional revenue, but the level of profitability related to wide-format printing services is certainly less clear. When asked about the level of profitability for the different wide-format print services, we found a range of responses, which indicates that users believe wide-format printing is highly profitable, but that the finishing and prepress elements of their wide-format operation were less profitable.
(See Chart 4.)
Almost 76 percent of respondents indicated that wide-format printing is either highly profitable or profitable; while 60 percent said the same thing about prepress, and only 56 percent said the same thing about finishing services.
Users also indicated that they lack a 100 percent understanding of the profitability of their wide-format printing operation and would like to know more.
(See Chart 5.)
Almost 47 percent of respondents have no plans to invest in new wide-format equipment in the next 12 months. But 5.5 percent indicated that they plan to invest in new wide-format printing equipment within the next six months. Another 24 percent indicate they will invest in new wide-format equipment within the next 12 months.
These numbers are lower than we've seen in other InfoTrends studies, but are fairly robust given that wide-format printing is not the primary business that these companies are in. Also, from a research standpoint, people who respond to this type of question may respond conservatively because they are worried that responding positively will result in them getting a barrage of solicitations.
(See Chart 6.)
Finally, the users who reported that they intend to acquire new wide-format printing equipment indicated just as much interest in finishing equipment like cutters and laminators as they have in new wide-format digital printing equipment.
The chart also indicates that users appear to be more interested in new UV-curable and new solvent ink-jet printers than they are in new aqueous ink-jet printers. This suggests that they plan to do more than proofing with their next generation of equipment.
InfoTrends believes that the research data proves that there is a lot of room to grow wide-format printing services among commercial and production printing operations. The supply-side developments and marketing focus are driving new investments in new equipment and technologies in the production sector that have historically been all about using wide-format printing systems as proofing devices.
The next few years should see a strong growth in the wide-format segment among commercial and production printing companies, as they search for additional revenues and profits. PI
About the Authors
Tim Greene serves as Director of Wide-Format Printing Consulting Service at InfoTrends. Alexis Golini is Research Analyst, Wide-Format Printing Consulting Service.