Features

Surveys on the future of the printing industry are providing print service providers (PSPs) with valuable insights on where their field is headed in the future. The results indicate that digital printing will change the face of industry and bring us two diverging types of equipment whose only similarities will be their digital data processing and digital printing capabilities. This will have profound effects on regions such as the Middle East which invest heavily on business productivity tools to spur commercial and economic growth.

The present and future advantages of going digital are clearly outlined in Canon's 2010 Insight Report on 'The Redefinition of the Digital Printer.' This document confirms that digital printing has helped PSPs overcome the recession, with more than half of respondents offering digital printing revealing profit and revenue increases compared to just 31.7 per cent for non-digital providers.

Another 2010 report, Pira's 'The Future of Electrophotographic Printing to 2015,'predicts the digital segment to grow from USD 57.6 billion in 2009 to around USD 90 billion in 2015. PSPs can thus look forward to immense opportunities in the digital domain, more so in growth regions such as the Middle East where businesses are more willing and able to invest on key productivity technologies.

The SME revolution which will pit digital PSPs against offset printers is reminiscent of the offset sector's own challenge to letterpress in the 1960s, when the more economical offsets catalyzed the largest -ever number of printing start-ups worldwide. Offset is in no danger of being overrun by digital, though, because it is still a good technology for medium- and large-size printers. Offset printers are even investing in digital technologies themselves, although their growth hinges more on mergers, acquisitions and strategic partnerships.

These trends - renaissance among smaller printers and consolidation of larger businesses -will polarise the industry. At one extreme, repeated mergers among larger printers will create industrial-scale "factories" exploiting offset's advantages on high-volume "static" print with the personalised capabilities of high-speed digital webs on high-volume variable work. At the other extreme, smaller PSPs will evolve into cross-media providers of integrated marketing services.

How these businesses exploit digital technology will also depend on the application � transactional print is a case in point. Promoted as an opportunity for digital-equipped PSPs to add value, in reality the data security levels required by many corporate clients will restrict the opportunity to those select players who can afford the investment to address the high volume transactional print market. However, the opportunities for smaller PSPs will continue for 'transpromo' as they start to offer the service as part of a cross media offering to SMEs.

Feedback from PSPs and industry data shows that there are many other applications offering growth opportunities for smaller PSPs; where, for example, digital technology and a variable data capability can deliver an application to communicate with the consumer on a personal and even emotional level.

Some industry reports are predicting a rise in digitally printed packaging, again likely to be based on the increasing personalisation opportunities. Digital book printing will also grow, driven by the increasing self-publishing industry, where single copies are required, as well as an economic necessity for major publishers to manage the early and late part of a book's lifecycle. When it comes to promoting a business or product, the use of direct mail is on the increase again, as marketing professionals return from perceived low cost digital direct marketing to a tried and trusted communications medium, which is easily measured and has a proven ROI.

Key to potential success is grasping the three features of the industry that digital is redefining. First, digital frees PSPs from the tyranny of commoditisation. It lets them walk what Canon calls the "Path to Profit", from low-margin, undifferentiated, informational print, through promotional products, to colour variable data print and ultimately to high-margin, cross-media campaigns. Combine personalised direct marketing with targeted marketing collateral such as brochures, linked to a personalised URL on the web and, for marketing organisations, it is a powerful, measurable offer, which is value- rather than cost-driven.

Second is 'accessibility'. Digital and the associated technologies have shortened the production value chain. Forward-thinking PSPs are managing direct relationships with the brand owners or even the final consumer as there are fewer organisations between the buyer and the printer - PSPs are not just recipients of data for printing, they can proactively increase their business in new marketing driven areas.

Third is 'added value'. The further along the path a PSP goes to adding new cross-media services, the more the dynamics of its business change-in particular, the balance of power between the PSP and its customers.