A perennial question asked by all wide-format printing equipment and supplies manufacturers is what is the eligible market size for my products? This has always been a difficult question to answer, and it is getting more difficult to answer due to the rapid turnover in print service provider businesses.
There are several ways to estimate the eligible market for wide-format printing equipment and supplies in the US market (note it is almost impossible to size the opportunity with any level of confidence on a worldwide basis, since even fewer credible data sources are available). This analysis looks just at eligible sites among print-for-pay service providers for eco-solvent, latex, and uv-curable inkjet printers.
Trade Organizations: There is no single class of wide-format graphics printer users. There are screen printers, photolabs, reprographers, commercial printers, tradeshow exhibit builders, fine artists, and many others. Dedicated trade associations that follow their craft serve most of these tradesmen. All of them face the challenge of sizing their sector on the basis of extrapolating beyond their membership. A trade association may have as members around 15 percent of the base there are serving. Based upon its best estimate of members it has captured, it extrapolates their industry size.
Government Sources: Government sources also attempt to size the number of sites by type of business. The US Census is able to provide a detailed look at varies types of printing and publishing activities, but often they misclassify and lag behind in the time they capture the data and publish the data. The Census can be 10 years out of date. A timelier source is employment data (verified through social security payments), but this too is subject to misclassification and time lag. Tax data from the IRS can typically not be refined enough to pinpoint the type of printing business.
Directories: When all fails, a search of the Yellow Pages directory (the online version, not up to 12-month old printed version) will typically result in creating a list of print-for-pay businesses by region, state, or major metropolitan area. The catch is that many of those that advertise may be involved in activities related to wide-format printing, such as print brokering or providing supplies, rather than actually printing.
Therefore, a Google search or Yellow Page directory search needs to be manually followed up with verification calls to be sure the business is classified correctly.
Trade Magazine Lists: Trade magazines rarely profess to be able to size the markets they serve, but frequently do provide top 100 lists. Often the data in those lists is self-provided by the print-service-provider, since most of the companies are privately held. This means that, in some instances, the owners of privately held companies do not participate, since they want to keep their financial data private. The lists however do provide insight into the relative scale of the print service providers.
Substrate Suppliers: There is one constant among wide-format graphic print providers: they all need substrates to print on. The suppliers of substrates often have daily contact with those print-for-pay suppliers and have a good idea of how many sites there are in a given region they serve.
There is the catch: there are few if any true nationwide substrate dealers that cover the range of wide-format applications that exist. A LexJet may capture professional photographers, but will likely miss most screen printers. The same holds true for a Nazdar or Pitman.
IT Strategies believes to quantify the size of the wide-format industry one has to triangulate the data sources, adjust for time lags of data available, and verify using installed base, throughput, and average retail sizing per square foot. Based upon this methodology, IT Strategies estimates the 2011 US market size for print service providers (document and wide-format graphics, excluding in-house, self-print users) to be as follows.
We have split out the sites by revenue band in order to gain a sense of which types of shops can afford a certain piece of printing equipment.
The challenge of this methodology is that the revenues camouflage what is wide-format printing versus other print applications. Based upon interviews, we’ve estimated the ratio of revenues that are derived from wide-format graphics digital printing. Using those assumptions calculated the estimates retail value of wide-format graphics inkjet.
The retail revenues for wide-format graphics inkjet output in the US mirror those in the 2011 IT Strategies wide-format graphics forecast. Now the challenge is converting the revenue into eligible sites for wide-format inkjet printers. Assuming that the weighted average revenue from wide-format inkjet is $0.5 million per site (remember that print-for-pay sites are more likely to generate revenue from solvent and UV-curable printers than aqueous printers) the total number of eligible sites which purchase wide-format printing equipment and supplies is in the range of 19,500 in the US market.
Another way of looking at this data is that about 1/3 of all print service providers in the US had some type of wide-format inkjet printing technology in 2011. From an installed base perspective of solvent, latex, and UV-curable printers in the US, the average wide-format print service provider has about 1.6 wide-format printers installed per site.
Is there a margin of error? Yes. How large is this potential margin for error? We don’t know and can’t prove it, but we believe there is no better way to size the market unless one has the resources to comb through every Yellow Pages directory and individually verify the activity of the sites listed. Of course, that data would be outdated immediately upon completion as businesses merge, go out of business, or alter definition of who they are. Ultimately, it is not the numbers that are important but the trend and relative context those numbers provide about an opportunity.