Printing, Commercial

SIC 2750

NAICS 32311

Printing companies engage in lithographic, gravure, or other commercial printing. The industry likewise performs offset and photo-offset printing and photolithographing.

INDUSTRY SNAPSHOT

The years between 1980 and the mid-2000s were a period of digital revolution for the world's multibillion-dollar printing industry. Forced by nontraditional media, notably CD-ROMs and Internet publishing, to assimilate technology or fold their shops, printers had to find their place in a new era of information delivery. They were hungrier than ever for the benefits of new technology to keep printing competitive by decreasing production costs and improving the quality and timeliness of their services. Other challenges included the industry's habitually fierce competition, the fluctuating cost of paper products, and competition from television and radio for advertiser dollars. In 2002 the latest technology push was for printers to develop so-called remote printing capabilities for documents and photographs through Internet printing, such as the PrintMe Network system. PrintMe Networks allowed professional-level printing to PrintMe printers from wireless and cable-free devices such as personal computers, two-way pagers, and mobile phones, as well as dial-up devices such as fax machines. Other industry-wide developments in the early 2000s included plateless press technology and highly evolved computer-integrated manufacturing in the printing process.

Many of the largest commercial printers responded to these marketplace realities through diversification into information services, redefining their role as providing communication solutions rather than just printed products. By the late 1990s, some printers had begun to offer services as diverse as database management and information warehousing. These firms were well placed to do this work for several reasons. Their business had always dealt with the packaging of information; producing CD-ROMs, for instance, could be seen as merely a change in medium. Some, such as R.R. Donnelley, garnered experience with such media through supplying manuals for the computer software industry. Others, such as Cadmus Journal Services, found a niche providing Web publishing for their clients in addition to traditional printing.

As traditional printing companies continued to go out of business, nearly all major companies accepted integrated media as crucial to their existence, realizing that they must offer such services by 2010. In addition to print and video capabilities, large printers as of 2005 had services related to database management, image vending, electronic and technology-related equipment sales, and multimedia sales presentations.

Electronic file transfer forced many printers to become savvy about digital networking requirements, and some even found a profit center in marketing their networking expertise to their clients' in-house needs. The impact of electronic file transfer, direct-to-plate technologies, and digital printing was an ongoing vector of industry change. Due to the high costs of printing and specialized equipment, many newspapers and magazines "outsourced" the printing of publications to printing firms that served as outside contractors.

ORGANIZATION AND STRUCTURE

The three largest commercial printing firms in the Western Hemisphere—R.R. Donnelley & Sons of the United States, Quebecor Printing Inc. of Canada, and Carvajal S.A. of Colombia—accounted for approximately 10 percent of industry sales through the 1990s. At the other end, 58,000 plants competed for 82 percent of the market. A similar structure was found at the national level: 80 percent of U.S. printers had annual sales of less than US$2 million in the early 1990s. Most firms in the industry were small; the 40,000 U.S. commercial printers had an average size of 20 employees. In Japan 80 percent of printing companies employed fewer than 10 workers in the early 1990s. Although average profits were better for larger firms, the profit leaders in the smaller size categories tended to be more profitable than those in the larger categories. Efficiency and marketing penetration were other important factors influencing profitability.

Short-run printing—2- or 3-color and process color printing in runs of fewer than 5,000—accounted for an estimated 26 percent (US$20.1 billion) of the copying and commercial printing market in the United States. Analysts noted that shorter printer runs with smaller signatures and heavy reliance on bindery technology to produce customized publications for narrowly targeted markets was an increasing trend in the U.S. market. Conversely, European printers favored all-at-once printing practices to save time and labor and eliminate the need for special binder operations.

Various regions specialized in certain segments of the printing industry. For example, Brazil emerged as the packaging center of South America, while areas with low production costs, such as Mexico, attracted labor-intensive operations in the areas of bookbinding and other post-press sectors of the printing industry.

Literacy and disposable income were limiting factors in any region's print industry as well. While the United States and Canada produced an average of US$305 worth of printed materials per person in the 1990s, less than US$2.50 per person was produced in Asia outside of Japan. Fifteen percent of the world's population accounted for consumption of more than 80 percent of the world's printed products, according to some industry analysts.

Other factors made it difficult for printers in developing countries to produce high-quality print products and thus compete globally. A consistent supply of materials, such as paper and ink, was vital, but in China, for instance, most printing materials were available only through domestic suppliers (although high-quality paper was sometimes imported for special projects). Careful handling and protection from moisture also was required, necessitating a level of sophistication often lacking in less developed facilities. However, some countries, such as Thailand, succeeded in achieving high printing standards at prices that were a fraction of those in the United States. In a similar manner, the printing industries of other regions, such as the Middle East—which utilized European and Indian equipment and expertise—began to develop businesses that were competitive with long-established printers in the United States and Europe. Investors noted this trend in the industry.

BACKGROUND AND DEVELOPMENT

The commercial printing industry originated with the introduction of handbills and broadsides used to publicize goods for sale or auction, cultural events, and other public notices. Commercial printers were also hired to print currency, stamps, and government documents. Often the same firms became publishers of almanacs, Bibles, and other books. It was not uncommon for publishing firms to diversify into commercial printing, and a single publishing house that supplied newspaper, periodical, book, and commercial printing often dominated developing regions.

Printing in general is one of the world's oldest industries. Woodcuts of illustrations were in use by the ancient Egyptians, Babylonians, and Chinese. However, textual matter was not printed until the eighth century A.D. Approximately 300 years later innovators in China and Korea experimented...

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