Substitute forms of media will continue to attract consumers away from printers.
Los Angeles, CA (PRWEB) September 04, 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. “For many media products, the printed word has proven to be too slow to produce and too costly to distribute,” says IBISWorld industry analyst Caitlin Moldvay. “As a result, newer forms of media have been leeching away this industry's demand.” With revenue declining at an average annual rate of 6.2% in the five years to 2012, the Printing industry as a whole is in decline. In 2012, revenue is expected to continue declining, falling 2.0% during the year to an estimated $76.6 billion.
Over the past five years, decreasing sales volumes and downward pressure on unit selling prices have hampered industry profit margins. “Further crippling the industry, printing requires substantial capital investments in new technology to remain competitive, even at times of excess capacity,” adds Moldvay. “Such overcapacity has led to industry consolidation.” In the five years to 2012, the number of firms operating in this industry is expected to fall an average of 2.2% annually to 26,176. The Printing industry is highly fragmented, with privately-owned firms comprising the majority of commercial printers. Throughout the last three decades, there has been an increase in market share concentration due to mergers and acquisitions. Industry consolidation has allowed the larger printers, including major player R.R. Donnelley & Sons Company, 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 at an average of 4.5% annually to 463,904 employees in the five years to 2012.
The Printing industry is projected to continue its decline in the five years to 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 is expected to continue consolidating due to overcapacity and the rapid pace of technological change, and rising barriers to entry and increasingly strategic and complex relationships with customers will contribute to this consolidation over the next five years. 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 report 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
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.