Commercial Printing
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Industry Overview
The US commercial printing industry includes about 35,000 companies with combined annual revenue of about $100 billion. Major companies include RR Donnelley and the US operations of Canada-based World Color Press (formerly Quebecor World). The industry is fragmented: the largest 50 companies account for about 30 percent of revenue.
The commercial printing industry includes printing on apparel and textile products, paper, metal, glass, and plastics; it also includes typesetting, platemaking, and book binding. Book publishing, magazine publishing, and newspaper publishing are covered in separate industry profiles.
Competitive Landscape
Demand is driven by advertising and product needs of business customers. The profitability of individual companies is closely linked to effective sales operations. Large companies have scale advantages in buying materials like paper and ink, serving large customers with regional or national needs, and making efficient use of expensive presses. Small companies can compete effectively by offering better local service in a specific product category. Annual revenue per employee averages about $160,000.
Digital technology has changed the competitive landscape of the commercial printing market. Prices for digital color pages are falling below offset printing prices and companies that fall behind in the shift to digital printing are at risk, especially in the pre-media portion of printing.
Products, Operations & Technology
Commercial printers produce magazines, phone books, labels, advertising brochures, catalogs, newspaper inserts, direct mail marketing pieces, corporate reports and other financial printing, training manuals, promotional materials, and business forms. Most commercial printers offer four distinct services: design and other prepress services; actual printing; finishing (including folding, cutting, and binding); and fulfillment, which includes packing, storing, and shipping (often on a "just-in-time" basis). Other services can include packaging, database management, Web design, CD services, training, and consulting.
A typical commercial printer has different presses and binding equipment available to work on various types of jobs. The main printing process used is offset lithography, using either individual sheets (sheet-fed presses) or continuous rolls of paper (web presses). Sheet-fed presses print up to 16 pages of letter-sized product (a 16 page "signature") at a time, at speeds up to 15,000 impressions per hour. Web presses print 32 pages at a time at speeds over 40,000 impressions per hour, and are usually used for production runs of more than 50,000 copies.
Presses usually print in one, two, four, or six colors; some presses can print eight. Digital presses are increasing in use, especially for print runs under 5,000 pieces. Digital technology is also becoming the norm in pre-media services and design.
Paper is the biggest individual manufacturing cost, often amounting to 25 percent of revenues. Printing papers are often coated, and are bought in sheets or rolls from distributors. Many customers provide their own paper. Paper prices can vary significantly from year to year. Commercial printers generally don't keep large inventories of paper as requirements change from job to job; instead, they rely on regional distributors to provide the many varieties and grades. Inks, films, printing plates, and cleaning solvents are other major material costs. The solvents used to clean inks off the presses can be an air quality issue.
Major press manufacturers include Heidelberg and Komori for conventional presses; and Xerox, Hewlett-Packard’s Indigo, Kodak's Nexpress, and Punch Graphix’s Xeikon for digital. Large ink manufacturers include Sun Chemical and Flint Group.
Printing technology is evolving rapidly. Virtually all prepress work is now done with computers. Digital presses are still expensive, but falling in price and used mainly for smaller runs, but movement to an all-digital printing environment is rapid. Small printers that delayed transforming to digital technology are beginning to do so as the price falls. Digital presses also have the benefit of added labor productivity, reducing the man-hours required for press setup.
