NPES Print Outlook Conference Predicts Recovery and Urges Caution
The national economy is slowly making its way back to good health, but printers can’t assume a return to economic growth will automatically bring them back to profits and prosperity.
The printing industry, facing continued overcapacity and more consolidation, has changed fundamentally, and understanding these changes is the key to succeeding in the new environment.
That was the message from leading industry analysts at the 22nd annual Print Outlook conference sponsored by NPES, The Association for Suppliers of Printing, Publishing and Converting Technologies, in Washington, D.C. on Dec. 5-6.
“This is a sobering time in this business. We’re right in the middle of a witch’s brew,” said William Lamparter, PrintCom president and conference chairman. Changes in customers’ needs and marketing philosophies are fundamentally altering business prospects for print, he said, even though “print quality is better than it has ever been, and print cost effectiveness is better than it has ever been.”
Business in general has abandoned mass distribution in favor of a more customized approach, and printers must grasp this change and add value to their services, said Mr. Lamparter.
Ad Sales on Track for ‘Solid’ 2003, Brighter 2004
Advertising industry analyst David Peeler, former CEO of CMR, predicted that the U.S. advertising market “is on track for a solid 2.5 percent to 3 percent growth for 2002, followed by a strong 2003 and a stronger 2004 thanks to the conjunction of the Olympics and the election cycle.”
The biggest winners in the ad arena in the near term are likely to be Spanish language media, growing at more than 20 percent annually, and spot television, which is directly fueled by political campaigns and Olympic coverage, Mr. Peeler said. Other areas which will experience stronger growth include network and cable television and local newspapers. Internet advertising lost 18 percent in 2002 and is “still a very small medium,” he said. There is still too much capacity in consumer magazines, and further consolidation can be expected.
Print Recovery Not Complete until 2004
Industry sales have increased in two consecutive quarters for the first time in two years, said Andrew Paparozzi, National Association for Printing Leadership vice president and chief economist. Assuming no setback in the war on terrorism, “we expect print sales to grow in 2003 at a rate of 4.7 percent to 5.2 percent, after declining for two consecutive years,” he added.
But, he said, the recovery has occurred at a painfully slow pace, and will not be complete until 2004. Mr. Paparozzi said NAPL’s current forecast of growth in 2003 is a downward revision from previous estimates. “The recession was a lot deeper for us than for the economy at large,” he said.
The biggest threat to printing companies is forgetting that they are in the communications business, he said. “Our primary function will always be to learn everything we can about our clients’ unique communications needs – ink-on-paper and electronic – and how we can best satisfy those needs.”
Not All Printers Will Share in Recovery
Though recovery is predicted, there is still cause for concern among printers. Vincent Naselli, TrendWatch Graphic Arts director,noted several encouraging trends in today’s print business, but still warned that recovery will be slow and “not everyone will share in the growth.”
Mr. Naselli projected declines in purchases of many types of printing equipment, contrasted with projected strong growth for digital color printing, largely because “the reliability issues have been put to bed.”
Long Term Future of Print
Mr. Lamparter moderated a panel discussion on print’s long-range prospects among the conference analysts. According to Printing Industries of America, there are a number of business models in the industry, and most involve at least some ancillary services.
Panelists agreed on the need to deliver broader services to clients. Printers will also be called on to do much more client education than before. “The average print buyer today is a relatively unknowledgeable person,” said Frank Romano of the Rochester Institute of Technology’s School of Print Media. “They need the printer to teach them.”
Conference proceedings can be purchased for $150 in CD-ROM or hard copy formats, or for download from the NPES FTP site. For more information, contact member services department at (703) 264-7200; e-mail: firstname.lastname@example.org.