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Commentary & Analysis

Digital printing is now a business

By Frank J.

By WhatTheyThink Staff
Published: September 7, 2004

By Frank J. Romano Printing companies that are doing best are those that print both offset and digital. September 7, 2004 -- I was with a west coast printer who said that their digital printing operation was generating a profit of 30 percent. "Our offset operation has never achieved that level," they said. Overall, digital printing has paid off for those printers who added this capability to their company over the last decade. At present, black-and-white printing is generating more volume and profit than color, and most monochrome printing volume used for personalized direct mail promotions is imprinted-offset printing. Compared to offset, both estimates and orders are up for digital printing. (See the chart below.) Starting at a base of zero in 1999, our index shows the growth of offset and digital estimates and orders over four years, with a projection through the end of 2004. Each unit represents a 10 percent change. The printing companies that are doing best are those that print both offset and digital. Of the digital-only companies, we are seeing more emphasis on complex variable-data printing, with most of the revenue coming from database and programming services, not printing per se. All digital printers are seeing longer and longer short-runs, as customers demand their jobs in less and less time. Most digital printing customers are also offset customers and the synergies between the two are an advantage. There will always be a balance between static and dynamic printing. We hear a lot about variable-data printing, but the money in digital printing is mostly in static work that would have otherwise been printed offset. That may change but there will always be a balance between static and dynamic printing. So far, digital printing has not seen the relentless price competition that has befallen offset. Digital printers seem to be selling time rather than run. We are also seeing that finishing is playing a role. Offset printers usually have more finishing equipment and ability. This gives them a very profitable capability. All of this confirms that digital printing is now officially a business. It's where the money is.

 

 

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