In this article we turn our attention to the long term future of print and print markets. Our purpose is not to provide a specific forecast of the future but rather is offered as educated speculation on a likely path of print’s future environment.
Functionality Is the Key
The key to print’s future, in my opinion, is the functionality of print. As pointed out in previous Flashreports and my recent book “Competing for Print’s Thriving Future”, although many print products and services provide multiple functions we can sort data on shipments and plants by three major intended functions:
Print intended to inform or communicate factual and editorial information such a magazines, newspapers, books, and reports.
Print providing product logistics to manufactured
products—packaging, labels, wrappers, and product
Print intended to market, promote, or sell various products, services, political candidates, positions, or ideas—marketing and promotional print, such as catalogs, direct mail, and brochures.
Of the three functions, only one—print logistics—is not subject to competition and substitution by digital media. Conversely, print’s inform or communicate function is subject to the highest risk of substitution from digital media. Print as a marketing, promotion, and sales media appears to be in the middle.
Past as Prologue
To recap our previous look at past trends, only the logistics function of print increased in dollar shipments over the 1999-2009 period. In contrast the other two functions declined, although the marketing function was virtually unchanged.
Trends in Number of Printing Establishments
The trends in printing plants were somewhat different as the number of plants in all three functions declined over the same period.
Trends in Printing Sales
Combining the shipments and plant trends provides an indicator of how the surviving plants performed over the same period. Because the survivors gained market shares of the exiting plants, average sales per plant increased with the biggest relative gains in print logistics.
From this trend analysis we can rank specific print products relative growth (higher or lower than average):
Highest Relative Growth: greeting cards, direct marketing, packaging
Modest Relative Growth: labels/wrappers, general commercial
Less Relative Growth: magazine printing, book printing, trade services, newspapers
Least Relative Growth: business forms, financial/legal
We can also rank specific print products by competitive intensity—a comparison of total sector sales versus the number of firms competing in that sector:
Most Attractive: magazine printing, book printing
Attractive: greeting cards, packaging
Less Attractive: newspaper printing, labels/wrappers, financial/legal, business forms
Least Attractive: direct marketing, commercial printing, trade service
A Likely Future
What about the future? We have created some possible scenarios ten years into the future based on trends over the past 10 years. Our first scenario is a possible likely scenario that projects real or inflation-adjusted shipments to decline by four percent per year for the inform function, increase by two percent per year for the marketing function, and increase by three percent per year for the logistics function. In this scenario total printing shipments grow over the next 10 years.
Likely Scenario for Industry Sales
Adjusting for an expected continuing reduction in the number of printing plants specializing in each function provides a scenario for future shipments per plant in 2021. As can be seen, surviving plants in the marketing and logistics function enjoy substantial growth in shipments while surviving plants specializing in the information experience sales declines.
Composition of Industry Shipments
Looking deeper we see that the percentage composition of total shipments at the end of our 10-year projection shows significant decline in the share for the inform function and growth for the logistics and marketing functions.
Pessimistic Shipments Scenario
This scenario is only for examination purposes and is not necessarily a forecast of print’s future. However, it does offer a possible glimpse of the direction of current trends and an environmental scan for discussion and planning purposes. The bottom line implication is that print and surviving printers can have a thriving future. The key imperative for today’s printers is to implement the strategies and operating tactics for survival as the industry continues to restructure.
Wrapping up: Print’s Positive Future
The key conclusion from this analysis is that there can be a very positive future for print and printers. Today’s printers that are aware of the emerging industry environment and crucial business strategies and tactics have a very bright future. Even if the pessimistic scenario were to unfold, on a per plant basis, the surviving firms would still experience sales growth in two of the three major functional categories.
Dr. Ronnie H. Davis is vice president and chief economist for Printing Industries of America. For more information, visit www.printing.org.