Open Enrollment | Subscribe to Printing Impressions HERE
Follow us on

VDP Supplement: Profiting From Digital

October 2006 BY CHRIS BAUER
PRINTERS LOOKING to boost their bottom lines with digital printing, look no farther. Attendees at the general session “Profiting with Digital Print” at the upcoming PIA/GATF Variable Data and Personalization Conference will learn what industry profit leaders have done to maximize their digital printing investments and realize respectable returns.

Last year, digital/toner-based printing grew at double the rate of traditional ink-on-paper printing. This session, led by Ronnie Davis, Ph.D., vice president and chief economist at PIA/GATF, will discuss details from recent economic data compiled by the association, a benchmark to compare a company’s efforts in achieving desired results.

“Right now, toner-based/digital printing is growing at about twice the rate of ink-on-paper, so the share of total printing that is digital/toner-based will increase significantly over the next five years,” Davis informs.

The association detailed several key performance benchmarks, including tracking digital print markets; profit leaders and profit challengers; keys to digital printing success; and key benchmarks.

According to the PIA/GATF print market tracking model, all types of print saw gains of 3.2 percent, on average, in 2005. Ink-on-paper rose by 2.4 percent, while toner-based/digital printing doubled traditional printing gains, increasing by 4.8 percent.

So far for 2006, the industry report finds all print gaining 4.2 percent in the first quarter and 3.7 percent in the second quarter. Ink-on-paper rose 3.1 percent in both the first and second quarters of 2006. Meanwhile, toner-based/digital printing lead the way with a 4.5 percent jump in the first quarter and a 6.1 percent spike in the second quarter.

Of the approximately $170 billion in U.S. printing shipments, Davis finds around 70 percent constitutes ink-on-paper ($120 billion); 20 percent includes toner/digital work ($34 billion); while 10 percent encompasses ancillary services ($16 billion).

PIA/GATF estimates there are 11,679 digital printing plants in the United States (not including in-plant printing facilities). More than 9,000 of these plants employ less than 20 employees. This compares to the more than 25,200 sheetfed printing plants and 4,200 web printing facilities.

According to the PIA/GATF Ratios study, income before taxes as a percentage of sales for all digital printers in 2005 was 2.6 percent, while profit leaders capped out at 10.1 percent and profit challengers dropped by -0.1 percent. This compares to all printers, which saw rises for all sit at 2.5 percent, profit leaders jump by 9.4 percent, and profit challengers modestly gain 0.2 percent.

Davis is bullish about the future of digital printing. Even the worst-case scenarios have digital printing coming out on top.

“If the economy slows down or declines due to a recession, this will slow down the growth of digital/toner-based printing,” Davis predicts. “Other than that I do not see anything else. And, when the next downturn hits, it will slow down ink-on-paper print more than digital/toner, so even in this scenario the share of digital/toner will continue to grow.”


Click here to leave a comment...
Comment *
Most Recent Comments: