“Our Digital Business Center (no offset press) became our standard new center offering three or four years ago,” says Kevin Cushing, CEO of AlphaGraphics. “Owners can request a variance to put in an offset press and many add them after they’ve built volume and want to capture the margins by bringing the work in house. We help them set up sourcing (usually other AlphaGraphics centers) prior to opening. The fixed costs associated with the equipment and skilled labor don’t make sense for a new startup. Some 13.5% of our network is now comprised of Digital Business Centers.”
Does Cushing think that offset will become obsolete any time soon? “Offset will be the number two profit center for the foreseeable future behind digital color. However, it is expected that offset as a percentage of revenue will continue to decline on an annual pace of between one and two percent. In 2009, offset sales were 20.38% of overall sales. Sublet sales, which include outsourced offset as well as finishing, etc., were 15.22% of overall sales. Four-color will always be a factor, but it will lose ground to shorter run, quicker turnaround, and ‘offset like’ technologies like digital presses. The effectiveness of personalization also moves volume away from offset.”
A View from the Field
So, that’s what the franchise leaders have to say about the future of offset. What about the franchisee view from the field? Sheri Statt Bercaw is CEO of a Sir Speedy franchise in Scottsdale, AZ. Her company is a perennial QP Top 100 company and her operation is about as sophisticated and advanced as any I have visited lately, with both digital and offset capabilities.
“Offset printing has been the core of commercial printing and most quick printing firms for a long time. Our company has seen a decline in offset over the past 10 years, and I truly believe we will continue to see the decline but at a much more rapid pace. Digital printing is now accepted by the vast majority of buyers.
“With the economic conditions of most companies, run lengths have drastically declined. Print on demand is also widely accepted, continuing the rapid decline of large quantity orders. Shorter runs are more economical as digital runs. We now see many commercial printing firms putting in digital gear to compete. Most commercial firms have not figured out how to sell it or how to deal with the quick turnaround times. This will quickly change.
“Technology is our future. The quick printing industry has to figure out how to sell services that don’t involve ink or toner on paper. Web-to-print technologies have proven this to be the future. As an example, the building of online catalogues with downloadable artwork for a variety of uses can be incorporated into these sites. Download fees can be associated to the process. Website development and marketing services are just a few other ways we can bill for services that don’t produce a single sheet of paper. Our industry must adapt.”
So, perhaps it is not a simple matter of digital taking over from offset. While PIA’s 2010 Forecast predicts a decline in conventional offset printing and an increase in digital printing, it also sees a significant growth in “ancillary services” such as those enumerated by Bercaw.
It appears that the consensus is that offset will shrink, but it will not disappear any time soon, and that digital output will continue to grow as the preferred output method. Marketing projects and other ancillary services will also play an increasingly important role. Of course, we haven’t even mentioned inkjet devices, but that’s another story.