Dr Averil M Horton - Alpha to Omega Ltd, UK
Summary
The 'traditional' print industry - composed of noisy presses, messy inks, hundreds of thousands of impressions, highly skilled craftsmen, and a fearsome independence, is merging with other possible versions of
a print business - the computer output business, the design service business, the digital print business, the electronic communication business, the global information business, and the customised service business. As a
result, the print industry is undergoing a slow, and often painful revolution, which will take it into the 21st century as just part of the global information and communication industry.
1 The 'Traditional' Print Industry
Traditional printing accounts for around 1.2% of a European country's GDP, giving a business size of around DM150 billion in 1993. The vast majority of printing companies are
small and medium size companies; even those apparently larger companies are usually composed of smaller plants which function like smaller businesses in their own right. In the UK, 75% of traditional print companies
have less than 10 employees.
There are three key functions in traditional print; pre-press, or the preparation of data, films, and printing plates ready for the press; printing, or the high speed, high
value work of printing ink onto the substrate (usually paper) in a web or sheet fed form; and finishing (or sometimes converting), which comprises folding, cutting, and binding, to produced the finished
printed article.
In terms of technology, lithography accounts for nearly half of all traditional printing, flexography for around a quarter (mainly in packaging), gravure around 10%, with screen, letter press, and
'electronic' together accounting for the rest. The cost of labour is the chief expense at around one third of costs, followed by the cost of paper, other consumables, and equipment depreciation. The printing industry is
traditionally highly skilled, highly unionised, production driven, and equipment focused. Quality is traditionally high, but so are waste levels and reject product.
2 Emerging Overlaps between the
'Traditional' Print Industry and the 'Electronic' Printing Industry
Run length
is the most significant area of change, driven by both technological and social factors. A decade ago, research staff were trying to produce printing plates that would print more than 1 million impressions; today, the focus is on automatic changeover of plates on a press to make the printing of run lengths of below 5000 commercially feasible. Slowly, the lower reaches of traditional print are meeting the upper reaches of digital print. The recent appearance of digital presses, such as the Indigo and Xeikon, are helping to bridge the gap, although eventually desk top computer output printing and traditional printing will meet each other in the middle.
Technology
itself is becoming common to both industries. Over 60% of medium and large printers in Europe now use desk-top software for their data manipulation operations, and slightly lower numbers use imagesetters and colour scanners. To date, however, the use of digital data has occurred only in the pre-press operation; use of digital data in the actual printing operation is uncommon, and in the finishing area almost unheard of.
Social factors, especially the increasing fragmentation of society, is helping to drive not only increased use of colour and shorter run lengths, but also fully customised printed products - where every
document produced is different. In the direct mail area of traditional printing, while there may still be litho presses running at high speed, the real value comes from the ability to customise each piece of mail - with
ink jet or laser printing, alongside the ability to manage and manipulate the variable data. Thus direct mail printers are good examples of printers who embrace and exploit the best of both traditional and electronic
printing.
Electronic vs. paper
storage and digital transmission of information is also drawing traditional print closer to electronic print. The preference for much archive and reference information in electronic form - with occasional local print-outs - is forcing printers to enter the business of electronic data management, storage, and delivery. In many ways this is a real departure for the print industry, as the content of the product to be printed has never before been of much interest to the printer. Part of such a data management business involves the local timely output of sets of data, usually achieved directly via ink jet or laser, in the location of use rather than at some central point.
The information overload
effect which is beginning to emerge is also drawing traditional print closer to other electronic print businesses. Customers are beginning to think more carefully about the volume of material they produce for their customers, and how it can be better targeted. There are signs too of a backlash against excessive 'junk mail' and overblown magazines and newspapers. One result of this is the production of smaller, targeted editions, for example regional variations, which require the printer to take responsibility for the production of several shorter runs, with different content, often in different locations. The use of digital presses or ink jet or laser produced inserts is sometimes a solution.
The shift from form to function,
often articulated as simply 'convergence', is forcing printers to consider the nature of the service they offer and where its real value lies. Until recently, information has been defined by the form it takes -
image, text, voice, data, sound/video etc. Increasingly these forms are converging, often in multimedia documents. The corollary to this is that the functions
performed by various companies in the value chain are diverging. For example there are developing specialist businesses in content creation, data storage, data distribution
- both the hardware wires and infrastructure, and the software management of the process - as well as specialist functions such data display (which can be both printed and on-screen), and data interpretation
for different aspects of display. All of these changes require a traditional printer to understand whether the business value comes from pre-press, printing, or finishing (or a combination of, or even none of, these). The method by which each is done - traditionally or electronically - is becoming less and less relevant.
3 Timescales
Although the rise of electronic printing has been enabled by the rapid development of IT, and in many cases the de-regulation of telecoms, the trends driving the merger of traditional print and
other information and communication industries are not new. In 1939, the three key themes of the World Fair were "information at your fingertips" (which referred to TV then), "
automated and personalised products", and "working with brains not brawn" i.e. knowledge businesses. In the 1970's a large UK chemical company ran a 'Social Changes, Trends and Attitudes'
Delphi Survey. Some of the conclusions were that 'printers and teletext in the home will supplant newspapers by the year 2000', 'transcription by telephone lines (e.g. using word processing equipment) will
replace business letters and orders by 1993', 'electronic libraries providing reading matter through TV screens in the home will be run by local authorities by the year 2000', and 'reprographic systems for
monochrome copying of the TV picture will be in the home by the year 1995'. The changing role of print in the information world is therefore part of a long term, well established trend.
Not everyone gets it right
however, even those who might be expected to have a high level of foresight. It was Bill Gates who famously said that '650k ought to be enough for anybody'!
4 Some Current Forecasts
Technology Usage and Run Length. In the USA electronic printing, which was estimated to account for 3% of print technology usage in 1990, will grow to 12% by 2005, and to over 20% by just after 2015.
However a better way to look at this is to consider page reproduction, as this covers not only traditional printing, but also office copying. This has flexo, gravure and litho together declining from a level of
60% in 1994 to just 50% by 2004, with electronic printing accounting for the change. Even more dramatic is the expected shift in the USA in run lengths. In 1994 full colour runs over 100,000 accounted for over 40%
of the total market value, and runs under 500 for less than 1%; by 2004 this will change to around 28% and 6% respectively.
Some commentators suggest that by 2000 all pre-press will be digital (and therefore capable
of being output on a desk top printer, a digital press, a traditional press, or a screen), although others suggest that 'near universal' is a better estimate, with for example only 65 - 80% of proofing being digital by
then. There is a general view that 'digital' print will compete directly and broadly with traditional commercial print by 2000, perhaps accounting for one third of the UK printing market, and that by that time output to
media other than paper will be a significant alternative to all types of print. Sales of office copiers will therefore be static from now on (as printing direct from a computer becomes just as convenient), but the
number of documents processed will increase by 50% between 1997 and 2000. Some brave souls predict that the paperless office will finally arrive between 2003 and 2007!!
The 1995 UK Technology Foresight Programme
(which incidentally ignored traditional printing completely, perhaps assuming that everything would be done on desk tops or electronically) contains some views about the future of newspaper printing and distribution. About one third of respondents to the Delphi survey thought that '
most newspapers will be accessed electronically in the home'
(on-screen or printed out in-situ) between 2000 and 2004, and the same proportion thought it will take until between 2005 and 2009. Interestingly, those from commercial, retail, or leisure industry backgrounds thought it would happen quicker than those from IT or communication backgrounds.
In response to the statement that 'printing centres will be replaced by high quality print technology and digital links in the home/office/factory', again one third believed it will happen by 2000 to 2004 and
one third between 2005 and 2009; 12% think it will never happen, or at least not until after 2015. Nearly all think that 'high quality colour paper printing systems will be present in 50% of new hi-fi/TV/video/PC
stacks' by 2009. However, the majority of respondents also believe that 'printed output will not cease to be the dominant way of information display for personal use' until after 2009, and nearly one third
think it will never happen at all.
5 How It Really Is Today
Real life of course never follows forecasts or people's beliefs or opinions. The traditional print industry clings to the belief that electronic or
digital print can never produce the quality or speed that a well run litho press can and many small print companies believe that they already provide a full service business; the concept of managing the whole data and
information distribution process (whether electronically or on paper) is outside their concept of a printing business. For many traditional printers, it is too late, too costly, and too incomprehensible to change. The
driver of the emerging overlap in fact comes from other print and communication businesses encroaching on the traditional print industry.
The real level of merger between traditional print and other print and
information/communication business is very hard to gauge. There are some pointers though. One source estimates that in the UK digital colour print accounted for only £30m of business in a total (traditional) market of
£6bn. Similarly, fully operational computer-to-plate operations (producing printing plates for use in traditional presses directly from digital data) were being used in only 50 companies in the UK in 1996 - out of a
total of 15,000 traditional printers.
In the US in 1993 10% of the total printing market was estimated to be digital (mainly Docutechs). Some enlightened printing companies, often entrepreneurial groups, have sought
to expand into new IT and communication markets, for example Quebecor made 10 acquisitions in 1996 that are in the high-tec communications area. A survey of selected US printers in 1996, indicated that more than 80% of
printers were using electronic pre-press to some extent (as they accepted customers files on disk). However in the actual printing part of the process, usage of digital or electronic processes was much lower; 55% of
thought that monochrome or spot colour electronic printing creates added value, but less than 10% were using it; less than 40% thought the same about full colour printing but less than 5% using it; and less than 30%
thought that computer to plate/press adds value with less than 2% actually using it. Less than 10% of printers were providing multimedia products, CD-ROMS or videos, and the majority of printers did not think that this
type of activity would add value to their businesses.
This however is a view from the traditional print side of the fence; the view from the electronic output side is much more striking. For example, globally, sales
of printing equipment in 1994 were split almost 3:1 in favour of electronic printing equipment (compared to non-electronic equipment), and in 1995, only 30% of Indigo sales went to (traditional) printers, the rest going
to service bureaux, copy shops, and repro-houses. There is also a very clear view that digital or electronic print is not taking over from traditional print so much as expanding the market.
Another pointer to the
possible merging of traditional print with the IT and communication businesses can be found also from the other side of the IT and communications fence - the current use of non-printed, or traditionally printed,
information. In the UK, by 1994, less than 24% of UK households had a home computer, up from 13% in 1985, but only up from 23% in 1993, suggesting that penetration is levelling off. In UK businesses, 32% of senior
managers have access to on-line information (and 38% to email), but 65-70% still make direct use of paper telephone directories and over 60% still read a (traditionally printed) daily paper.
In the US the total paper
published market in 1994 was $138bn and the total for full-text electronic publications only $5.9bn, or 4.2%. Another source suggests that in the USA in 1994 only 2.1% of the sales value of books comes from electronic
books, 0.1% of the sales value of newspapers and magazines comes from electronic versions, and 4.5% of business publications and forms comes from electronic versions. Looking at Japan, an even more conservative picture
emerges, with for example in 1994 only 10 PCs per 100 workers compared to 42 in the US, and only 39,000 computers connected to the Internet, compared to 1.2m in the USA.
6 Why There is a Gap between Forecasts and Reality
The merger of the traditional print industry with other versions of print businesses - the computer output business, the design service business, the digital
print business, the electronic communication business, the global information business, and the customised service business is certainly happening, but perhaps slower than forecast. It does rather depend however on the
vantage point of the observer.
From the point of view of traditional print, the rate of change in business matters is not related to the rate of technical change, but rather to other, softer issues such as management
change. The traditional print industry still sees its business growing, albeit at static profit markets (the typical return on sales of a UK print company in 1994 was around 6%), and tends to prefer to stay on familiar
territory and accept modest growth. From the electronic or digital print point of view, technology change is enabling many new markets to be served, some of which just happen to be old traditional print markets. From
this point of view, where this happens, the merger is already well underway, but is not necessarily seen by them as such, anymore than by the traditional printers.
The overall result is a move towards an information
communication and output service industry, encompassing not just traditional and electronic print, but also other industries such as mobile communications, telecom infrastructure, data management etc. The final result
will be a global information communication business, in which some information is sometimes printed out to paper. The technology by which this happens, where it happens, and by whom, will eventually be no more of an
issue than who wrote the software, manufactured the telephone handset, or entered in the data.
