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This
Month's Spectrum Summary:
(The
following is an excerpt from the August 2003 issue of Spectrum.
Spectrum is a proprietary monthly briefing published exclusively
for the clients of I.T. Strategies, Inc. © 2003)
Production
EP and Commercial Printing:
As Boundaries Melt, Challenging Navigation
This month we discuss the relationship
of production electrophotography (EP) to commercial printing
(excluding the mass media) with the I.T. Strategies analysts.
This industry, also termed "offset," is seen as in decline
due in large part to competing electronic media. Until around
1989 commercial printing growth tended to follow growth in
the GDP, but that link has now been broken for good.
Although offset is in decline, many
offset printers continue to grow by diversifying into various
print-related areas such as electronic distribution, data
management, and design services. There has been horizontal
consolidation in the industry. But commercial printers have
not acquired companies with digital expertise such as local
service providers or wide format shops. We have seen the reverse:
wide format companies diversifying into digital production
printing.
With production EP cost/performance
ever improving, users are beginning to bring more jobs in
house. One view is that this is not taking volume from commercial
printers, that it is incremental demand. However today there
are some examples of users bringing jobs in house that formerly
were done outside. One is a drug store chain which recently
installed an iGen3 to run targeted direct mail promotions.
Some specialized companies such as addressing shops are expanding
into general printing. We see the boundaries melting between
the various print-related sub-industries and between print
suppliers and their customers. Direct mail is a major driver.
On the hardware side HP is described
as having a short-term and a long-term strategy for its Indigo
digital press. For now, they seek profitable incremental applications.
Competing directly with offset is a long-term strategy although
one view is that to date production digital has been driven
mostly for its short-run attribute than for variable printing.
This, however, is changing. Several targeted direct mail programs
are described using a combination of EP, inkjet and offset.
In the near future, it is expected production EP will be doing
the whole job.
The key to competing more directly
with offset is finishing. So far finishing in-line tends to
be limited to sorting, folding and stapling. In Japan NTT
now uses Scitex production inkjet to print two-color invoices,
fold them and insert them into window envelopes, all in-line.
Another example in this country is a personalized GM promotion
with a response rate that more than compensates for the premium
printing cost.
In short, print is getting divorced
from the traditional commercial printing industry which survives
by diversifying into various print- and electronic-related
activities. But so far, few are moving to digital. Should
they begin to move more heavily into digital printing, a down
side may be that price-cutting could hurt the whole industry.
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