Print Industry - BPIF

© 2005 IBM CorporationIBM Printing Systems

POWERFUL, COST-EFFECTIVE OUTPUT SOLUTIONS2/23/2006

Marketplace trends and the impact on UK Print Industry

Declan Rea

POWERFUL, COST-EFFECTIVE OUTPUT SOLUTIONS

2 IBM Output Environment

Topics for discussion

� WW Industry Trends � UK Industry Status� Segment Trends� Implications



Source – Caslon Market Data 2004

World Wide Trends



Mail Intensity Across Countries – volumes vary



UK – Mergers, Acquisitions, Consolidation

� Merger activity in 2004/5� Job losses� Suppliers struggling

Source: Three headlines from Dotprint, Feb 3rd

•Astron Buys Edotechand Experian

•RRD buys Astron

•Deutsche Post to buy Williams Lea



UK Print Industry� Overall UK Print Industry has declined

by 3% since 2001� Significant declines in Advertising /

Direct Mail and Book printing� But …there are a number of sectors

which are growing, including:� Programmes, tickets� Periodicals� Business forms

-3%12,79412,31512,88113,155Total

-49%346396412516Composition & platemaking

-34%131137141176Printed paper & paperboard

-19%1,1561,2671,2901,372Books, brochures, leaflets etc

-10%2,9013,0153,1743,196Advertising literature

-10%537534554589Other printing

-9%1,0869721,0891,181Printed packaging

-3%124126131128Postcards, greetings cards

-3%825700883848Graphic services

-2%235205195241Newspaper printing

0%475442456473Bookbinding

2%422397438413Business forms

3%753680719730Printing onto non paper/board

4%317275313304Security printing

5%467454429445Printed labels

5%1,2511,2221,2121,187Periodicals

23%1,7691,4951,4441,358Printing of programmes, tickets

etc

CAGR2004200320022001PRINTING

Source: UK manufacturer sales (PRODCOM) 2001 - 2004



UK – Digital B&W Industry Trends

� Direct Mail� Flat

� Transaction volume� Flat to declining due to

• Increased use of color• Increasing use of Service Bureau’s

� Digital Book volume in UK� Migration to digital continues slowly � Larger users

• Oxford Uni, CUP, LSI..



Direct mail

� Internet is growing – but it’s still only 2% of total spend� More usage around acquisition

� Direct mail has been growing steadily since 1994.

� 2005 was the first year that DM declined.

� Last year UK companies spent £2.5 billion on Direct Mail.

� Direct mail still has best ROI for marketers

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1990 1992 1994 1996 1998 2000 2002

InternetDirect MailCinemaRadioOutdoor& TransportTVPress

Total UK advertising expenditure 1990-2003Source: DMIS

Direct Mail

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1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003



Direct Mail Trends �Emerging trends and value adds;

� Web integration – personalized url

� Increasing use of relevance• 3 x uplift in response rates vs personalizing

� Increasing vertical integration• Transaction documents

� Future technologies…• Cellular phone• Emerging Electronic Media: Blogs, Wikis, PODcasts



Direct Mail Competitive Strategies �Integrate Direct Marketing Components;

� Focus on value adds – “value leader in direct marketing”• Call center• Telemarketing• Response Management• MICR• Campaign Management • Data Mining• Print Management• Digital color options available for Personalisation• Creative Services



Digital Book Trends

� Only 2% of WW monochrome book pages are digital� Why?

� PQ� Cost per book� Offset efficiencies improving – DI� Future technologies – web, ebooks, PODcasts…

� Digital CF is now acceptable for a subset of volumes� Digital CF reduces the cost per page 20-50% vs CS� Run length break point continues to shrink 1000 -> 300



UK Trends for Books

� 2004 6.4% increase in book sales� Growth predicted at 10.4% between 05 and 09.� 65k titles in 90, 116k in 2000, 161 in 2004 -> self publishers and

small publishers exploding� More titles to meet needs of big box chains - quick turnover of titles with

short shelf life.� 4000 book publishers in UK� Net book agreement ended in 98, allowing retailers (vs pubs) to set

prices - this is driving lower prices led by superstores.� UK has highest productivity in Europe for book printing� Shorter book page count and run length in Europe than US� Total book market = 3.7 billion pounds in 05� Customers rank 1. TCO, 2. PQ, 3. Reliability, 4. Speed as biggest

concerns w digital

InterQuest study; The Digital Book and Manual Printing Opportunity - Oct 2005



Emerging Strategies for Books

� 3 models� Short-run

• Printers uses digital to compliment offset web and cutsheet to provide a mix sell to publishers - ie mix the higher print cost of digital with the lower supply chain costs for certain volumes - become a one stop shop,

� Versioning• Printers publishes updates eg.updated legal chapters vs the whole book, another

example is flight manuals� Variable

• End customers are demanding truly variable docs - such as financial, real estate, customized manuals for cars, or like exam papers that are highly versioned but also variable due to tracking id numbers

� Integrate litho workflow and prepress with digital� Leverage PDF and JDF



UK Print Industry - implications

� Focus on niche areas � Develop value-added services that differentiate � Tight cost control - Right first time � Audit trails for increasing industry regulations� Drive for Standardization – JDF, PDF, UP3i, AFP � Increasing need for automated workflows � Multi-vendor hardware and software � Shortened print windows – tough SLA’s

© 2005 IBM CorporationIBM Printing Systems

POWERFUL, COST-EFFECTIVE OUTPUT SOLUTIONS2/23/2006

IBM Printing Systems

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Print Industry - BPIF