This Month's Spectrum Summary:

(The following is an excerpt from the May 2008 issue of Spectrum, a proprietary monthly briefing published exclusively for the clients of I.T. Strategies, Inc. © 2008)

Digital Print Realities
Does digital print really fit an offset world?

With drupa seizing the focus of the printing industry for the next few weeks, it is a good time to look at the big show in the context of the coexistence of offset and digital printing. Drupa 2008 will show that digital printing technology is a viable alternative to analog printing in some key mainstream markets, and the advent of production inkjet technology from all the major digital printer manufacturers shows that digital printing will continue to be an important part of the industry.

Digital printing has taken work from offset presses and enabled new and unique applications that give some formerly offset print shops a profitable path to the future. But there are some important issues to consider as digital printing technologies become an established means of putting information on a page.

Mark Hanley and some colleagues at I.T. Strategies recently completed research with about two dozen print providers in North America and Europe that use both offset and digital presses. While still reliant on the offset presses, digital printing accounts for a significant amount of revenue at all companies contacted.

The vast majority of digital presses in the market today come from four equipment manufacturers: HP Indigo, Kodak, Xeikon, and Xerox. No presses from other vendors were installed at any of the businesses contacted in the research.

Only about 20% of the world's major commercial printers are using digital presses in addition to their analog equipment. These digital presses were often bought to provide short-run color printing as a way to augment work done on offset equipment. Too often, short-run printing is still the reason printers buy these machines, rather than using them for the unique ability to do variable data printing.

The research showed that successful digital printers often describe their businesses not as printers but as marketing communications firms. These companies' services encompass creative services, design, IT, and direct mail and are often functioning as direct marketing agencies. Although this is a successful business model, les than 100 companies in the U.S. fall into this category.

The focus of these companies is on direct mail, which would seem a narrow market segment, but the majority of direct mail applications using digital printing technology are highly replicable and are scalable to many sizes and types of businesses. Such companies can create and produce highly targeted mailings for a wide range of companies and can combine the mailings with cross-media marketing to create very effective communications. Doing so shifts a printer's profits from printing to value-added services such as data management and mailing.

While the growth potential for digital printing and direct mail is great, digital printing still accounts for only a small share of all the printing done worldwide. While it continues to grow at a modest rate, electrophotographic printing is recognized as an alternative that is complimentary to offset, but not a replacement, assuming variable data is not a requirement of the job.

Looking to the future, printers are more interested in digital presses that can print a wider sheet size than ones that are faster. While speed is a useful feature, print width offers greater productivity advantages.

There may be some technical barriers to offering greater width on electrophotographic devices, but this does not appear to be the case for inkjet, although the technology is still under development.

There will be new fixed head array inkjet systems introduced at drupa 2008, and although most are a year or more away from commercial availability, these machines may ultimately be able to provide the print width (and much faster speeds) that will make digital print engines more competitive with offset technology.

A decade from now, successful printers will probably have offset, electrophotographic and inkjet printing systems and use them for entirely different applications.

May