High-Value Digital Applications: New Opportunities on the Horizon

High-value applications and the digital devices that are required to produce them are becoming increasingly prevalent. These solutions are now moving downstream and have become accessible to medium-sized and even small print service providers. This article explores how high-value applications are coming to represent the fast track to the digital transformation.

Although small and medium-sized PSPs have historically struggled with achieving sustainable profit margins, high-value applications have ushered in some entirely new revenue streams.
Traditional offset technology cannot cost-effectively produce personalized, variable-data, or TransPromo applications, but digital is fulfilling the need for these high-value applications.
Many of the PSPs that offer high-value applications incorporating CYMK+ will include multiple embellishments to better meet the needs of their target audience and improve brand identity.

By Marc Mascara

Introduction

During 2018, awareness of high-value digital applications soared to a level that had never been seen before. Today, the digital revolution is in full swing and new innovations are making headlines on a near daily basis. As a result, high-value applications and the digital devices that are required to produce them are becoming increasingly prevalent. These solutions are now moving downstream and have become accessible to medium-sized and even small print service providers (PSPs).

The Opportunity

Although small and medium-sized PSPs have historically struggled with achieving sustainable profit margins, high-value applications have ushered in some entirely new revenue streams. The capabilities associated with high-value applications (e.g., five- and six-color embellishments, variable data, and an extensive range of supported media) open the door to a variety of opportunities. In addition, companies like OKI and Ricoh have developed more economical mid-range devices to accommodate the businesses that consider high-end digital presses too cost-prohibitive.

All the while, the higher-end production-level digital presses have seen improvements of their own. For example, 2018 brought us Xerox’s Iridesse, the first six-color digital dry ink digital press. Additionally, Eastman Kodak released Nexfinity with expanded capabilities and a configurable print station accommodating up to five colors. Over the past year, the capabilities of the Nexfinity device have been refined for an expanded array of high-value applications, including the release of specialty and metallic inks and toners as well as numerous digital front end (DFE) capabilities to support new textures and media types. Kodak’s Nexfinity is leading the industry’s charge in migrating high-value applications from offset to digital; the Nexfinity platform is treated in a manner that would be considered appropriate for an offset press. Kodak is taking component life very seriously, making a number of strategic investments to deliver the lowest possible operating costs to end users. As in the offset world with ink, Nexfinity is delivering an extensive list of toner options along with the ability to manufacture custom color toner on request. The same can be said for Xerox’s Iridesse digital press with the release of extra-long sheets and white toner.

One of the biggest drawbacks of traditional offset technology is that it cannot cost-effectively produce personalized, variable data, or TransPromo applications. Digital printing is fulfilling the need for these high-value applications, and its capabilities are expanding all the time. According to Keypoint Intelligence – InfoTrends’ primary research, brochures, direct mail, and business cards account for the highest share of color applications produced on digital devices. For high-value applications where variable data and other embellishments are incorporated, however, the most common application types shift to direct mail (65% of volume share), followed by postcards and labels. In some cases, these applications are an extension of direct mail, but they also represent an expansion into short-run label printing as businesses strive to capture a higher share of customers.

Many of the PSPs that offer high-value applications incorporating CYMK+ will include multiple embellishments to better meet the needs of their target audience and improve brand identity. The most common types of CYMK+ enhancements include Pantone/premixed spot colors, spot varnishing or flood coating, and white ink. Fluorescent and metallic colors are also relatively common. As more PSPs incorporate these high-value applications, the demand for equipment that efficiently produces these applications is expected to accelerate. Because PSPs are always on the lookout for ways to grow their businesses, InfoTrends’ research also analyzed the two-year growth trajectory for certain applications. It is perhaps not surprising that over three-quarters of surveyed respondents expect demand for posters, banners, and signage to grow, as wide format is a common area for business expansion. Interestingly, however, over half of respondents expect their folding carton work to increase. This is another high-value application area, and it ties back to the expanded paper weights and media types that many equipment manufacturers are focusing on. In fact, roughly 40% of equipment manufacturers were planning to expand their offerings in this area. Digital technology is expanding machine capabilities and is therefore becoming more suitable for a growing range of applications.

The Bottom Line

In the past, many industry experts would have likely said that more and more applications would migrate from analog to digital over time as a result of these changes. Today, however, the “over time” component of that statement is transitioning to “over months” as the timeframe for change continues to accelerate. Once limited to more traditional manufacturing methods, high-value applications now represent the fast track to digital. This is particularly the case as technologies continue to advance and end-user brand recognition becomes increasingly relevant in today’s new digital printing reality.

Marc Mascara is the Associate Director of Keypoint Intelligence – InfoTrends’ Production Print & Media group. In this role, he supports customers with strategic go-to-market advice related to production printing in graphic arts and similar industry segments. His responsibilities include conducting market research, compiling industry and technology forecasts, custom consulting and analysis, and supporting clients with production digital printing. Marc has been involved in the graphic arts and publishing industries since 1980. Prior to joining InfoTrends, he worked at Eastman Kodak Company, where he served as Director of Marketing US/Asia for the Enterprise Inkjet Systems Division, managing regional marketing and operations for Kodak’s high-speed inkjet portfolio.