The switch to digital communications across media, advertising and other information markets has had a massive impact upon the printing industry worldwide. Its impact is at its greatest in countries where these markets have reached their peak in terms of maturity. However, there have been impacts in emerging and transitional economies too, albeit not to the same extent. However, long-term growth prospects for the print market have become more limited.
The only market segments where print demand continues to grow worldwide is in packaging print, including printed labels. Although global packaging demand fell during the recession at the turn of the decade, in most countries the market is experiencing a recovery.
In value terms, the growth in digital printing – particularly in areas like transactional print, advertising (including in-store displays) and some business stationery segments – means that market value is generally growing ahead of market volume, or at any rate not falling so quickly. This trend has been stronger in Western markets.
In more mature markets, one can point to a wide range of areas where digital communications have taken on the role of print. Many people, especially new consumers, now prefer to use the web for news and entertainment, with the effect that newspapers, magazines and books are now in retreat in many countries. There is still scope in some countries for growth in books and magazines, and to a lesser extent newspapers. In the case of books, while in places like Switzerland, the average person reads around 20 books each year, the equivalent figure in China is just three. In Switzerland, that figure is declining rapidly; in China, that figure is unlikely to grow very significantly. In India, where the average number of books read per year per person is less than one, that figure is likely to grow but may only average two to three before stabilising and then possibly falling back again in the longer term. E-readers like the Kindle will challenge print, as will media proliferation more generally. The same dynamic is apparent in magazine markets. Magazine advertising revenues have not recovered in most countries since a sharp downturn in 2009, and are unlikely in most cases to return to that level in the future.
In the case of advertising, while Internet advertising has taken very significant shares from newspapers and magazines, the impact upon below-the-line media has generally been less pronounced, although catalogues have been badly hit. Digital screens are now challenging outdoor media (billboards) but not to the extent originally predicted, and the same goes for in-store (PoP) advertising. Direct mail appears to be recovering even in some mature economies, but the long-term trend is likely to be downward. Direct mail in particular is undeveloped in emerging economies in Asia and transitional economies in Latin America (and also Eastern Europe) and there is significant potential for growth here through advertising and promotional materials.
While growth prospects in areas like general commercial print (stationery, financial and legal printing, etc.) are less pronounced in emerging markets, there are still significant growth areas such as government ‘information’ printing. In Asia and Latin America, publication print and advertising print will make more significant contributions to growth, although even in these regions package printing will be the main growth driver.
Changes in the supply side will have less impact upon print demand, other than negatively as wastage is reduced through the adoption of just-in-time delivery systems and in some cases digital print. Greater availability of MFPs could help make print a more attractive option, but in the end, if consumers, business and government switch to digital media en masse then it could be the case within 5-10 years that some of these printers will become dormant.
To find out more about the future of the global printing market, download Smithers Pira’s report, The Future of Global Printing to 2018.