An Economic Perspective on the Printing Industry Association Market

More on Association Consolidation: Article Generates Strong Reaction by Frank Romano

Would the printing industry be better off with fewer industry associations or just one association? Some observes believe the answer to this question is “yes.”

Would the printing industry be better off with fewer suppliers such as paper companies and merchants, ink companies, press manufacturers, software providers and other industry product and service providers? Do printers want just one paper company, one ink company, one press manufacturer? I believe virtually all printers would answer, “No, competition is better than having a single supplier.”

From my perspective as an economist with a specialty in industrial organization and anti-trust economics, the two questions are similar and have the same answer: “No, competition is better than having a single supplier.”

Associations are suppliers to printing firms just as paper, ink, press and other providers are.

They offer education, training, economic and market insight, technical services, management assistance and other services. As such, they offer services that need to meet the test of the market. Competition pushes suppliers to improve their products and services and lower their prices. Without competition product and service offerings are reduced and prices can be increased.

Looking at the “printing association industry” from an economic perspective, we see an industry already fairly concentrated with a relatively small number of “association service providers” with the three largest (in terms of membership) PIA/GATF, NAPL and PII. [Editor’s Note: PII in this case refers to PrintImage International.]

If we look at the top three association service providers we see three distinct operating models. PIA/GATF is a “full-line” provider in all segments of the printing industry with a broad array of products and services for many types of printers distributed through a channel of local affiliates that also provide service and assistance at the local and state level. It is also the only organization of the three with an international network, with members in Canada and Mexico and ties to the international printing community. NAPL is more focused on general commercial printing and offers a more centralized organization. PII focuses on smaller quick printers and copy shops. Only PIA/GATF provides government affairs, legislative and regulatory assistance.

These differences in product and service offerings, focus, organizational structure and other factors provide variety in serving the printer community customer base. Even where there may be seeming overlap in product and service offerings, is that a bad thing for customers? Would automobile buyers be better off if we eliminated the competition between Honda, Toyota, Ford, GM, Daimler Chrysler and others in a particular market segment and only offered a “one size fits all” model? Do you think the one model offered would be better or lower priced than before?

One broad-line producer and two niche providers do not seem like a lot in an industry of some 40,000 firms and annual sales of over $160 billion.

From an economic perspective the “printing association” industry looks relatively healthy, although like printing, it is mature and has undergone some downsizing recently. Let the customers (printers) decide which associations survive and how many are needed.