Color Digital Production Printing Continues to Grow at a Rapid Pace
By Toby Cobrin
The market for color digital production printing continues to grow at a rapid pace, both in terms of equipment installations and print volume. According to Color Production Printing & Variable Imaging in Graphic Arts: Market Analysis, a study recently published by INTERQUEST, the volume produced on digital full-color production systems by print providers will increase by 35% per year from 2005 through 2010. This growth will be fueled by technology developments from equipment vendors, continuous decline in TCO, the convergence with transactional printing, and the overall trend toward personalized communications.
Figure 1. Unit Shipments of full-color production systems in the North American print provider market (thousands of units). Source: INTERQUEST.
The study, which is based on the results of an in-depth survey conducted in the first quarter of 2006—both in North America and Europe—highlights the following market trends:
· Convergence continues to reshape the industry. One of the dominant themes at IPEX 2006 was the integration of digital and conventional printing. More vendors are climbing onboard the convergence of traditional and digital processes by offering workflow solutions and hybrid product configurations, while end users are reshuffling internal operations to maximize resources. Also graphic arts and transactional printing continue to be merged at a steady pace.
· Vendors of full-color production systems continue to push the envelope on print quality and speeds through enhancements to their systems. Base engine speed is only one factor in throughput. Vendors are also striving for productivity improvements wherever they can find it, including more efficient controllers and software, faster imaging on heavy stocks, and longer continuous run times.
· Paper handling and finishing features and options have also been advanced over the past year. Digital printing systems can now handle a broader selection of sizes, weights, and finishes. Practically all production copier/printers now offer booklet-making options, and inline perfect binding is emerging. Over the past two years the leading digital press vendors have been busy developing and announcing additional in-line, near-line, and off-line solutions (including coating stations) for their equipment.
· Digital overprinting onto offset-printed shells remains quite widespread. Overprinting represents about 22% of the black-and-white printing produced by respondents to the INTERQUEST study.
· Ink jet technology is making inroads into the production market on multiple fronts. Riso is trying to gain a foothold at the lower end of the spectrum, while Screen has joined Kodak Versamark in going after higher-volume applications such as direct mail.
· Vendors of full-color electrophotographic equipment are dealing with a range of issues in their efforts to increase market share and page count. As always, cost is a critical component for success. In the survey conducted for the project it is the highest-ranking request for future equipment. One approach equipment vendors are taking is to lower the cost to produce monochrome output on full-color systems.
The INTERQUEST survey also shows that direct mail is the most widespread and prolific application for digital full-color printing among respondent companies. Marketing material, the second leading volume generator behind direct mail, accounts for about 16% of the total color digital output produced by the survey sample. The survey also strongly suggests that digital book printing will make gains in producing color pages in the future.
Direct mail service bureaus produce the largest percentage of overall color pages as well as the largest percentage of variable data pages among respondent companies. General commercial printers produce about 18% of the overall color volume, and 14% of the variable data pages.
Xerox has the largest share (45%) of the total installed base of color production systems, and it also leads in market share of future acquisitions. Digital presses account for 75% of future equipment acquisitions, with the iGen3 accounting for about half of models respondents plan on installing.
Color variable data printing growing faster than the overall digital color production print volume.
Over the next few years, the color variable data print volume in the graphic arts market will grow at a higher pace than the overall digital color production print volume, mainly fueled by the growth of personalized direct mail. By 2010, we expect variable data will represent 31% of the total digital color print volume produced by graphic arts providers. A relatively small group of players, both in North America and Europe, will play a major role in the growth of the market.
· In our survey about 80% of the respondent companies with digital color equipment produce color variable data printing, and about half of their color digital volume contains variable content.
Figure 2. CVDP among companies with digital color equipment. Source: INTERQUEST.
· Over one-third of the respondents are pursuing full-color variable data “very aggressively”, while just over half are pursuing “somewhat aggressively.”
· Direct mail also generates the greatest volume, accounting for nearly 40% of the total color variable data impressions produced by the sample.
· Almost two-thirds of the respondents indicate they serve advertising and marketing firms, but when weighted by volume, this market generates only about 8% of the variable data printing produced by the sample. The automotive sector generates about 15% of the volume of variable data produced by the sample.
· PPML and PPML/VDX show clear gains from prior surveys among the respondents. Nearly one-third of the respondents producing variable data use PPML.
· Another area showing momentum is Web-based fulfillment. Nearly half of the respondents to the survey offer Web fulfillment services.
· The cost components of a full-color variable data job have been fairly consistent throughout the various surveys we have conducted in recent years. In the current survey the only exception is the cost of mailing, which respondents say represents a lower percentage than we have found on prior surveys.
In addition to the survey results, the INTERQUEST study includes in-depth analyses of key market trends, drivers and issues, applications and environments, as well as technology and product developments impacting graphic arts. It also includes a market forecast and an assessment of the printing vendors involved in this space.
Toby Cobrin, EDP, is a senior industry analyst with INTERQUEST.