October printing shipments were hit hard, most likely from the ongoing, and likely increasing, emphasis on digital media by retailers. Years ago, October could be counted on as the biggest printing month of the year. Retailers and other marketers have been taking advantage of the lower costs of digital media and the new opportunities for customer engagement that they provide. Even though many of these new media (which are now well-established) have lower response rates than print, they have lower total costs and lower costs of failure. A bad e-marketing campaign does not have the risks of lost paper or postage costs. The October commercial printing numbers are not pretty.

• Shipments were down -$519 million (-7.1%) on a current dollar basis. Inflation adjustment brought them to -$590 million (-8.0%).
• The average comparison with last year has been -3.5% on a current dollar basis, and -4.9% on an inflation adjusted basis.
• Since July, however, that has been -5.4% and -6.7%, respectively, so the situation seems to be worsening.

The data series that the Commerce Department publishes for commercial printing shipments starts with 1992. In current dollars, this was the worst October since that time. The biggest October in inflation-adjusted terms was in 1995, when it reached almost $13.3 billion in today's dollars. This latest report from the Commerce Department pegged shipments at just over $6.7 billion, or a little more than half of that 1995 record. That year, 1995, might be considered the final year without serious competition from digital media. Netscape went public that year, and all most consumers had at home was something called "dial-up" and access to a service called "America Online," with lots of AOL floppy discs around the house that often found use as coasters. We have many reports of print businesses doing extremely well, and we do not doubt that they are. The industry transformation and shake-out appears to be in high gear at this point. Profitable and growing businesses have changed their product offerings and have developed new approaches to the marketplace. Some printers are growing because of aggressive acquisition of "books of business." Others are trampling weak competitors, or picking up clients from printers that have exited the marketplace. We are in the field with a business conditions survey and it is clear that there are many print businesses doing well and making new investments. It is shaping up like "A Tale of Two Cities" or a "wheat from the chaff" story. This is not a marketplace for the squeamish, but it is one for the market astute and financially strong. There will be detailed analysis in the new printing shipments report that will be available on Tuesday, December 10 at the e-store. # # #