Competition is high in this industry, and the market is narrowing as digital technology becomes more prevalent. Consumers are increasingly favoring digital alternatives, such as online media, over printed materials. Declining sales volumes and downward pressure on unit selling prices have hampered industry profit margins. The industry is expected to continue consolidating due to overcapacity and the rapid pace of technological change and digital media adoption. In order to adapt to the changing market environment, firms will have to diversify offerings and services into cross-media products. For these reasons, industry research firm IBISWorld has added a report on the Printing industry to its growing industry report collection.
Los Angeles, CA (PRWEB) March 10, 2012
The Printing industry has contended with a variety of challenges over the past five years. Consumers are increasingly favoring digital alternatives, such as online media, over printed materials. IBISWorld industry analyst Caitlin Moldvay says, “For many media products, the printed word has proven to be too slow to produce and too costly to distribute. As a result, newer forms of media have been leeching away this industry’s demand.” With revenue declining at an annualized rate of 5.5% in the five years to 2012, the Printing industry as a whole is in decline. During 2012, however, a moderate rebound in economic conditions is expected to lead to a short-term revenue boost, with revenue gaining 0.5% during the year to an estimated $79.6 billion.
Over the past five years, declining sales volumes and downward pressure on unit selling prices have hampered industry profit margins, says Moldvay. Further crippling the industry, printing requires substantial capital investments in new technology to remain competitive, even at times of excess capacity. Such overcapacity has led to industry consolidation. Although the Printing industry is highly fragmented, throughout the 1990s and 2000s, there has been an increase in market share concentration due to mergers and acquisitions. This industry is expected to continue consolidating due to overcapacity and the rapid pace of technological change and digital media adoption. Furthermore, rising barriers to entry and increasingly strategic and complex relationships with customers will also contribute to industry consolidation over the next five years. In the five years to 2012, the number of firms operating in the industry is expected to fall to 26,176. Industry consolidation has allowed the larger printers to adopt more efficient equipment while slashing employment and wages. These trends were exemplified when Quad/Graphics acquired World Color Press in July 2010. The company subsequently closed several plants and reduced its employee headcount by 2,200. Plant closures have caused industry employment to fall in the five years to 2012 to 463,904 employees.
The industry is projected to continue its decline in the five years through 2017, though at a slower pace. Substitutes to commercially printed material, such as online media and advertising, will continue to adversely affect industry activity. The industry will also continue to struggle as digital media replaces paper products. In order to adapt to declining demand, printers will diversify into cross-media products, including multimedia layout and design. For more information, visit IBISWorld’s Printing in the US industry page.
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IBISWorld industry Report Key Topics
Companies in this industry are primarily engaged in printing on paper, textile products, metal, glass, plastic and other materials, with the exception of fabric. The industry covers a variety of different printing processes, including lithographic, gravure, screen, flexographic, digital and letterpress. This industry does not include publishers that also perform printing, nor does it include companies that perform prepress or postpress services without traditional printing.
Key External Drivers
Industry Life Cycle
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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