The Outlook for the US Printing Businesses in 2007 Essay Example for Free

The Outlook for the US Printing Businesses in 2007 Essay The printing industry encompasses a wide range of products for commercial and retail use. Printing is involved in the production of magazines, newspapers and books, as well as brochures, maps, postcards, business forms, stamps, manuals, packaging and so on and so forth. It also includes various related pre- as well as post-press occupations such as lay-outing, graphic designing, binding and finishing. There are different methods of printing using plates or an image carrier. Among the most common of these are: lithography invented in 1798, the modern process makes use of a photosensitive emulsion placed onto smooth surfaces, either using a platesetter for computer-to-plate (CTP) technology or on flexible aluminum or plastic printing plates; it’s most commonly used for credit cards, packaging, CDs, books and newspapers. flexography – most commonly used for packaging, it makes use of a 3-dimensional negative impression of the image to be printed produced on polymer or rubber and rotated on the surface to be printed. It was originally used for printing on corrugated boards. The flexibility of the material enables the print to be impressed on uneven surfaces. gravure – used mainly for food packaging, wallpaper, furniture laminates, paneling and magazines, gravure printing uses depressed, as opposed to raised, surfaces, where the image areas are etched into copper cylinders. It produces high quality print but the costs involved in the necessary equipment are prohibitive compared to other methods used in high volume runs. screen printing – can be used to print on almost any material, using a screen prepared with a stencil, a squeegee and ink. It is highly versatile and simple to use. The best known application for this method of printing is for T-shirt printing, letterpress printing – the method involves the use of movable type where the ink is smeared on raised surfaces and then placed on a suitable material such as paper or cloth for transferring impressions. The invention of reusable, individual letters for use in this type of printing in the 1400s is credited to Johann Gutenberg; offset printing – modern techniques make use of film negatives where the image is transferred onto photoelectric plates, similar to the printing of photographs. It is the most commonly used method for high-volume printing. Non-impact or plateless printing includes electrostatic, electronic, toner-based and inkjet printing. With the advent of computers, there has been a further diversification of the industry; namely, traditional or manual printing and quick or digital printing. (Bureau of Labor Statistics, 2005) Together   with the computer, the ready availability of the Internet has inspired fears that the printed word was in danger of being phased out as the most widely spread form of communication and information.   The impact on the growth and profitability of the printing industry was of significant concern, as the rising financial and environmental costs of paper printing made the move into a paperless society seem inevitable. In the US, especially after the recession of 1990-91, the most pessimistic forecasts had been made regarding the future of the printing industry in an increasingly digital world. A 2004 study of the findings and forecast of the US Department of Labor on the employment and compensation of workers leads to the conclusion that fewer workers working fewer hours will be required overall in the printing industry against a projected increase in all other industries, due mainly to the increased use of automation and digital prepress technology. However, there is a concurrent requirement for workers with knowledge in digital prepress and post-printing technologies. There also seems to be a perceived increase in companies specializing in commercial flexographic and digital printing. More companies will be employing fewer than 10 non-supervisory workers at higher or equal hourly compensation as compared to other industries. There also seems to be a trend towards increased employment of workers with knowledge or education in operation of computer-related equipment. (Bureau of Labor Statistics, 2005) There are varied opinions among businesspeople in the industry. Some maintain that the level of capital investment needed for quality, high-volume printing precludes all but a few to make a reasonable profit. (Paul, 1998) Others maintain that while a small profit margin may be discouraging, the printing industry is alive and booming, in part because of growing expenditure in advertising and promotions, as well as the proliferation of direct selling companies. (Dolbeck, 2005) Most agree that the advent of digital technology has helped lower costs and increase efficiency, thus improving profit margin. Some studies have shown that an increasing number of people are tuning into the Internet rather than newspapers or magazines. However, it is projected that it will be at least 10 years before those who get their news from the internet will outnumber those who read the newspaper. That is, if those who had earlier converted revert back to printed media. It is maintained that despite the many innovations in digital technology, it is not as portable as printed material, and the cost of attaining some portability is still beyond many consumers. Moreover, many companies maintain that the retention and pass-on potential of the printed brochure or pamphlet has a greater marketing impact than a website. For educational and scholarly products, the process of transferring the information from print to screen is a long and laborious process, and while audio books and CD-ROMs are enjoying growing popularity in many libraries, it is still a long way from replacing the books as a means of providing in-depth information and education. (Heger, 1994) According to C. Barnes and Co.’s report â€Å"2005 Market in Print,† a survey of printing companies revealed that the majority of companies surveyed with non-printing operations (NPO) were small companies. These NPOs included graphic design, fulfillment and mailing. The chief complaints from printing business owners include stiff competition, the cost of technology that have shorter depreciation, shortage of skilled workers and price increase of consumables. The transition from manual to partly digital technology has caught some companies flat-footed, jumping on the bandwagon too late or without enough knowledge and research to buy the right equipment at the right time. The segment of the industry that is particularly enjoying popularity is digital or quick printing.   Small print shops that specialize in desktop value-added services abound because of the ease of acquiring the necessary equipment and consumables and the relatively low capital requirements.   These services include calling cards, invitations, letterheads for small businesses, leaflets, flyers and marketing materials such as promotional mugs and magnets. Digital cameras and mobile phones with high resolution cameras have also resulted in a rising demand for digital photo printing. Also an interesting development in the industry is large format printing, in which digital images are transferred directly from a digital image to tarpaulin or paper, much like a large inkjet printer.   This is especially handy for low-volume printing requirements such as a banner a garage sale or posters for a school recital. Digital print shops have a unique relationship with its customers. All preprinting requirements may be provided by the client directly, usually already in a digital file.   The print shop ascertains that form and layout of the file is up to standards for proper printing and provides the medium for the actual process.   Or the client may come in bare-handed and state the requirements. The print shop then provides the services required: scan, lay-out, proof, color correct, edit then print. Many a party or small social event, small business and school have taken advantage of this while-you-wait service in fulfilling their collateral needs at comparatively low cost considering the volume involved. Paper companies make the process even easier by producing products especially designed for toner-based or inkjet printers ranging from pre-formatted labels in different configurations to scented board paper for calling cards, all available in retail at neighborhood bookstores at reasonable prices. The trend for digital printing is towards faster, cheaper and higher quality of printed product. However, high volume requirements cannot be fulfilled by even the best equipped digital print shop simply because the cost escalates per piece produced, unlike traditional printing methods, where fixed costs such as plates and film enable the producer to run prints at lower cost when volume goes up. These same fixed costs, however, cannot provide the service at competitive prices if the volume is low. The relationship of the plated and digital print businesses is largely symbiotic.   Plated printers are the main source of income of paper companies that also produce the specialty paper needed by digital printers, but only as sub-business. These paper companies deal in volume as well, and will not survive on the sales from digital shops alone. Digital printers at the neighborhood level provides potential clients an accessible point in which they can bring their initial printing requirements to be then referred to a plated printer after graphic design, scanning and/or lay outing for volume printing. There is very little actual overlap for the two sub-industries, providing services for different needs of the same customer. A new player in the field that promotes the marriage of digital and traditional printing processes is print-on-demand (POD) publishers. More of a publishing rather than printing method, it nonetheless uses digital imagery and letterpress printing to produce books and posters in small runs. (Wikipedia) Would-be authors are able to have their work published, albeit they pay for it themselves. The method is also often used for limited circulation publications, as a stopgap for materials with high demand that are in the process of being re-run and for books in print with only a trickle of demand which makes a full re-run impractical. What is the forecast for the printing industry in the US?   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Overall, the prospects of the printing industry for 2007 are good. Perhaps it is not as rosy as some projections from 1999, when printers enjoyed a boom, but neither is it as black as it is being painted by some trend watchers. The average projections for the industry overall is 5. The need of those in the printing industry to reinvent itself in order to overcome aggressive competition, smaller markets, and increasing cost of materials, especially paper. The changes in the market are considered by 20% of a representative slice of print and prepress firms as a call to arms in the war of doing business in a changing world. (Youngblood Communications, 2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   In the second quarter of 2006, Xerox Corporation spearheaded a free seminar series entitled â€Å"Innovate ’06.† It is a worldwide series with concurrent offerings within the United States that focused primarily on educating those in the printing business, or who are thinking of getting into it, on their options regarding industry trends, technological advances and how to boost profit and efficiency in the workflow of an increasingly digital industry. (Presswire, 2006)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   While there is some pessimism among some of those in the industry regarding the viability of the printing business of turning over a reasonable profit, the prognosis of manufacturers of the equipment and consumables is positive. In a survey of U.S. companies reports show and increase of expenditure from 2004 of 23% on new plants and equipment. The spending spree is attributed to appreciable profit-earning in 2004, enabling companies to make improvements and begin projects that have been put off during the leaner years. (Min, etal, 2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   TrendWatch Graphic Arts, in its report entitled â€Å"Printing Forecast 2005: The TrendWatch Graphic Arts Perspectives on the Challenges and Opportunities for Printing in the Next 12 Months and Beyond†, also reported that a survey of American and some Canadian commercial printers are hopeful about their companies’ futures. There was an increased sale of printing presses in 2004 and a projected 6% increase of sales of 6-color sheetfed offset presses over the following months. (Youngblood Communications, 2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Advertising expenditures has also increased, according to TNS Media Intelligence, a strategic advertising and marketing information provider. In the 1st Quarter of 2006, total advertising expenditure rose by 5.2 percent against the same period of the previous year. However, impact of this expenditure did not quite favor newspapers and business to business (B2B) magazines. Of those in the publishing industry, only consumer magazines posted an increase in income. (TNS Media Intelligence, 2006)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Such reports tend to focus on the large companies spending the big bucks in advertising. Growth in the industry is not as high as projected, mostly because of a not altogether unexpected shift to online media, with a worldwide growth of 40% expected, according to Carat. (Khan, 2006) But earnings from advertising and marketing expenditures by top companies are not the only opportunities for those in the printing industry today. There has been a healthy growth in the quick print industry that to print for the ordinary citizen with a family picture Christmas card to send to the folks back home. (Youngblood Communications, 2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The grudging admission by most existing, large printing companies is that business is good, if not great. This could be because they are reluctant to encourage other players to get into the business and cut into an ever decreasing wedge of the market. Environmental issues are also a big consideration in the woes of these big companies, requiring expenditures on cleaner, more efficient machines.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   For those about to plunge into the pool, start small seems to be the way to go. The neighborhood print shop, the POD publisher, the offshoot value-added service provider does not require much capital expenditure. There is always someone wanting to print something, the important thing is to research the intended site of enterprise and provide whatever is needed.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The shift to digital has been widely accepted as a good thing, even by those who had watched its advent into the market askance. The growing dependence on the microchip driven hardware is felt across all industries, and most especially in the printing and publishing industry, spawning a greater demand for the technology. And software and hardware companies are quick to take full advantage of this trend. Almost every six months, the newest, fastest, cheapest, most efficient, most environment friendly, most accurate, most user-friendly and other â€Å"new, improved† models and programs are being touted.   For those wishing to get into the business in a big way, big ticket items are the ones that need to be most researched. True, the Internet and online media are the new toys, and everybody wants to have a go at it. Gone are the days that for research, you go to the trusty 20-volume Merit Student’s Encyclopedia, and for the latest Hollywood gossip you go over to your neighbor’s house and borrow the supermarket tabloid. The Internet is easier to use when searching for a school project, music to download, movies to preview or things to buy However, very few people enjoy reading a suspense thriller or a romance novel from a glowing screen hunched over a computer, and it is highly unlikely that some type of digital media would become affordable enough to be left in mailboxes in lieu of flyers, leaflets, pamphlets and brochures. Sharing photos and sending virtual greeting cards are also a good thing, but there is no replacement for actual photographs you can frame or actual greeting cards you can frame. In essence, one media does not necessarily compete with the other. They each have their advantages and disadvantages, and given most circumstances, print and digital complement each other. Some publications have even found that a good Web-based counterpart was a good way to get circulation going as well as a source of income via advertisements. Furthermore, since Web content can be updated instantaneously, the publication can keep its readers up-to-date with the latest news and trends in between issues. For those in the printing industry, the computer has been much like the electric bulb. It is faster, easier to use and produce better results. The ones who could not keep up with the technology have turned in their shingles and closed up shop. The smart ones got with the program and grew even better. The well-researched, carefully-planned production structure with prerequisite training and upgrades in equipment and workflow has generated significant earnings for the enlightened business owner.   Rather than ranting at the changes and trying to outlast the new technology, many companies began spending on upgrades or outright replacements of obsolete equipment that was keeping the productivity of the company at pre-digital levels. This willingness of printing companies to invest in new technologies sends a crystal clear signal that the industry is healthy and responsive to changes.   The outlook for 2007 for US printing industry is looking well. References Bureau of Labor Statistics, U.S. Department of Labor, 2005 Printing Career Guide to Industries, 2006-07 Edition retrieved December 15, 2006 from at http://www.bls.gov/oco/cg/cgs050.htm Paul, P. 1998 Everything thats fit to print: printers struggle with changing technology and stiff competition New Mexicos printing industry Industry Overview New Mexico Business Journal retrieved Dec 15, 2006 from http://www.findarticles.com/p/articles/mi_m5092/is_7_22/ai_54370066 Heger, K. Oct, 1994,  Print: a road kill on the information superhighway? impact of information superhighway on printing industry Communication World,    retrieved December 15, 2006 from http://www.findarticles.com/p/articles/mi_m4422/is_n9_v11/ai_16358776 Dolbeck, A. 2005, Valuation of the Paper and Publishing IndustryWeekly Corporate Growth Report NVST retrieved December 15, 2006 from http://www.findarticles.com/p/articles/mi_qa3755/is_200502/ai_n12412452 Min, et al, June 2005, U.S. industry unlocks budget box Pulp Paper retrieved December 15, 2006   http://www.findarticles.com/p/articles/mi_qa3636/is_200506/ai_n14687790 Youngblood Communications Co., Ltd., Jan 2005 Printing Forecast 2005 Print Action retrieved December 15, 2006 from http://www.findarticles.com/p/articles/mi_qa4088/is_200501/ai_n9485742 Patrick, M. Nov 2000, The Web Effect on magazine publishing industry Folio: The Magazine for Magazine Management,   retrieved December 15, 2006 from http://www.findarticles.com/p/articles/mi_m3065/is_14_29/ai_67718962 Wikipedia, Flexography retrieved December 15, 2006 from http://en.wikipedia.org/wiki/Flexography Khan, M. December 12, 2006 Online drives Carat’s revised ad spend forecast DM News retrieved December 15th, 2006 from http://www.dmnews.com/cms/dm-news/research-studies/39350.html TNS Media Intelligence 2006 TNS Media Intelligence Reports U.S. Advertising Expenditures Advanced 5.2 Percent in First Quarter 2006 retrieved December 15, 2006 from http://www.tns-mi.com/news/05312006.htm M2 PressWIRE, 2006 Print Industry Experts to Help Companies Worldwide Profit and Grow retrieved December 15, 2006 from http://www.imaginginfo.com/article/article.jsp?id=1575siteSection=33