A rise in internet use and a decline in print publishing will continue to hurt the industry
Los Angeles, CA (PRWEB) July 23, 2012
The Printing Services industry has been hard-pressed due to waning demand for printing and the adverse effects of the recession. The industry provides prepress work like copy editing, proofreading, photograph retouching and print-plate creation. The industry also carries out postpress work including bookbinding and repair, gilding and foil stamping for specialty books. Therefore the demand for printing services is tied to the performance of the printing industry and the demand for book, newspaper and magazine publishing, all of which contracted or experienced minimal growth over the past five years. According to IBISWorld industry analyst Agata Labianca, this contraction occurred because of the recession's adverse effects on consumer spending and competition from online media, which reduced print advertising expenditure. As a result of downstream declines, revenue is expected to fall at an average annual rate of 5.3% to $4.4 billion during the five years to 2012. Nevertheless, the modest economic recovery fueled slow growth in publishing industries, which has favorably affected the industry, leading to a projected 2.0% revenue increase during 2012.
Advancements in desktop publishing have enabled many former industry customers to perform prepress services in-house. Consequently the number of industry operators steadily declined over the past five years, contracting at an annualized rate of 3.6% to an estimated 2,009 companies in 2012. In response to this rising external competition, printing companies are also expanding service offerings to include a greater array of prepress and postpress services. As a result, the price of prepress services dropped over the past five years, contributing to contracting industry profitability. From 2007 to 2012, average industry profit, as measured by earnings before interest and taxes, declined from 4.6% to 3.1%. While improving economic conditions will boost demand for magazines and books, the continued transition to the internet will limit industry gains over the next five years. The Newspaper Publishing industry (IBISWorld report 51111) is expected to continue declining, while magazine publishing will experience only marginal growth. Furthermore, e-book sales are projected to rise rapidly over the next five years. Also, with commercial printers increasingly offering prepress services, the Printing Services industry will be in a bind.
The Printing Services industry has a very low level of market share concentration. In 2012, the top four companies in the industry accounted for less than 5.0% of the industry's revenue. Although some large nationwide companies do provide prepress work, these companies are primarily involved in graphic services or printing, and as a result, are not included in the Printing Services industry. The Printing Services industry is highly fragmented; the majority of companies have just one facility and employ fewer than 18 employees. “Industry operators typically locate close to printers and publishers, in order to generate a steady stream of demand for both prepress and postpress work,” says Labianca. Furthermore, since fast turnaround time is of the utmost importance, printing service companies typically locate nearby their clients to limit both delivery time and transportation costs. As a result, the industry has remained highly fragmented. For more information, visit IBISWorld’s Printing Services in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes companies that offer prepress services and postpress services. Prepress services include imagesetting and typesetting for printers as well as preparing film and plates for printing. Postpress services include activities such as book binding to support printing activities. This industry does not include companies that are primarily engaged in printing, (these are classified in IBISWorld report 32311, Printing in the US).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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