Many years ago, an old song informed us that “video killed the radio star.” More recently, we’re being told that digital is killing offset lithography. Neither of these claims is entirely true. Today, radio has talk radio and sports call-in shows, all with solid, if sometimes overly opinionated, audiences. Offset also has its own solid following in an increasingly digital world, although in many quick and small commercial shops it is more and more playing a supporting role.
According to NAPL’s most recent Capital Investment Study, offset’s share of printing industry sales have been declining steadily for more than 10 years. “No turnaround in the economy—no matter how robust—is going to change that. Nevertheless, lithography is still a $40 to $50 billion market.” The study quoted one participant as noting that “Any printer stuck with old technology in the pressroom is doomed.” While the comment may have been aimed at medium or larger printers, it also holds true for smaller printers with smaller format presses.
Who’s Buying What?
The NAPL study found some significant variations in offset purchasing priorities, depending on the company size. In companies with sales of less than $1 million, only 8.1% were interested in purchasing single- or two-color offset presses in the next three years. A tiny 4.8% were considering a four-color offset press, while fully 25.8% were contemplating the purchase of a variable data digital press.
In shops with sales of between $1 million and $3 million, 16.1% had single and two-color offset presses on their shopping list, while 25.8% were considering four-color presses. However, 35.5% were considering the purchase of a variable data digital press. Shops with between $3 million and $5 million were looking at one- or two-color presses (8.8%), four-color presses (20.6%), and variable data digital presses (55.9%).
Interestingly, computer-to-plate purchase plans were pretty robust in all three of these sales segments, indicating that there is still a strong interest in improving offset workflow. In the under $1 million group, nearly 20% were looking at a CTP purchase in the next three years. While that may not sound like a great rush to CTP by these small shops, it should be noted that 36.5% indicated that they had already purchased computer-to-plate capabilities within the past three years. Planned or already purchased CTP capabilities in the $1 million to $3 million segment totaled 68.8% (25.8% planned and 47.8% purchased), and in the $3 million to $5 million shops the total was only slightly higher at 69.4% (26.5% and 42.9%, respectively)
Who’s Selling What?
No doubt, there has been a steady decline in offset printing as a percent of sales among quick and small commercial printers. That said, offset still accounts for a substantial chunk of change. While single-color offset brought in 14.4% of sales for franchise printers in 2000, this year it only accounted for 3.8% of sales. Multi-color offset also has declined from 19.3% of sales in 2000 to 12.8% this year. Meanwhile, four-color offset has grown from 4.3% of sales to 6% of sales. Add that all up, and this year offset accounted for 22.6% of sales among the franchise segment, or $370 million.
Meanwhile, offset has also declined as a percent of sales among the Top 100 printing companies that QP surveys each year. Nevertheless, it still accounted for 32.7% of total sales last year. That breaks down to 6.31% for single-color offset, 10.4% for multi-color offset, and 16.01% for four-color offset. This year’s numbers won’t be available until the survey is completed later this month and published in our June issue.
Almost without exception, the leaders of the franchise industry segment expect offset to continue to decline as a percent of sales. In fact, many new franchise offerings and recommendations have become strictly digital. Allegra Network’s new startups are all digital, as are AlphaGraphics Digital Business Centers. Franchise Services encourages PIP, Sir Speedy, and Signal Graphics franchise owners who are investing in new equipment to go digital. However, offset isn’t being strictly ignored. Jobs that are well suited to the process can be jobbed out or franchisees can get a variance to install offset equipment. And don’t forget that most existing franchise operations still have an installed base of offset equipment.
While offset press manufacturers have tended to emphasize medium- to large-format presses, many still offer small-format options. However, these are not your father’s small presses. Increasing automation and computerization have improved efficiency, quality, and speed on today’s small presses.
Heidelberg has its Printmaster QM 46 (18.11x13.39") and Speedmaster 52 (14.56x20.47") lines, while Ryobi offers the 3200 and 3300 series (13x17") and its 520 series (14x20"). From manroland comes the Roland 50 series (14x21"), and Shinohara has its 52 series (14x20.5"). KBA’s GeniusUV (14.2x20.47") is a waterless small-format offering and Presstek has two direct image offset offerings, the 34DI (13.39x18.11") and the 52DI (20.47x14.76"). Ryobi also has a DI small-format press in its 3404 DI series (12x18"). And lest you think that presses from small-format pioneer ABDick have disappeared, the 9980, 9920, 9995, and 4995 series (all 13.39x17.72") are still being sold by Presstek. And even Baumfolder, better known for its finishing equipment, manufactures the BaumPrint 18 (13.39x18.11").
What’s It All Mean?
In some ways, the discussion of which technologies are on the rise or in decline misses the point. In our market segment, offset is declining, digital is growing, and digital inkjet is emerging, but let’s not forget that all of these technologies are about putting marks on paper. Almost without exception, industry experts say that success for today’s printer involves much more than putting marks on paper.
NAPL’s last Strategic Perspective report outlined the situation that, in reality, applies to printers of all sizes. “Many of us have the same idea: Get out of the commodity business by offering a range of services—particularly services that support personalized, targeted communication and online applications—under one roof. The reality, as many who have pursued the one-stop value proposition have learned, is that when we add services without integrating them into a value proposition that makes our clients more successful for doing business with us, we are no more protected from commoditization than we were when offering ink-on-paper alone.”
In other words, it isn’t so much about how your produce something, but about how whatever product or service you provide helps your customers prosper.