Technology is driving the convergence in the “printing” industry, blurring the lines between digital and analogue printing and generating new revenue streams
Over the last 10 years, our industry went through an accelerated technological evolution that had a profound impact. On the business side we’ve unfortunately seen multiple plant closures. But we’ve also seen a growing trend of consolidations and mergers and acquisitions (M&A) in our industry. The recent acquisition of Webcom by Marquis is a prime example of how one dominant book printer strengthens its position within its vertical by acquiring another. The acquisition by Transcontinental of Coveris Americas is a prime example of how a print giant reached out to another market vertical, in this case flexible packaging, capitalizing on quasi-similar technologies and knowledge. Many other printers have made similar moves, strengthening their position or expanding in adjacent verticals. On the technology side, we’ve seen the introduction of a wide range of digital print production presses, advanced new lithographic offset presses and flexographic presses, and even bigger display graphic presses.
What does this all mean? Where are we heading? What’s next? And most importantly, when do I use what technology?
In order to have a better understanding of these questions, let me reflect on what transpired in our industry over the last several years. With the evolution of digital printing, we’ve seen some key changes in the printing industry’s landscape. Looking back at the mid to late 1990s, we saw once-thriving verticals within the printing industry all but disappear, and how an evolved business model emerged. Typesetters, colour separators, film strippers, prepress houses and even offset-printing-only businesses started to disappear. At that time the survival of the commercial printing business hinged on the capability of amalgamating all these functions in-house. Prepress became more and more digitized and finished jobs went from taking weeks to days.
Gradually the digitization extended from the prepress area into the press area itself. The transaction printing world had already embraced high-volume digital B&W toner continuous feed (web) printing on pre-printed offset shells, handling massive amounts of data and operating on tight SLA’s. Océ, Ricoh and Xerox were the key equipment manufacturers in that field. Cutsheet B&W toner devices also started to find their way into the commercial printing world with Xerox commanding the lion’s share of the market. Towards the end of the 1990s we were also starting to see some initial forays into digital colour print production, with companies such as Indigo and Xeikon joining the field.
The acquisition of Indigo by HP in 2001 set off a new wave of digitization, quickly expanding beyond its original application and moving into commercial, direct marketing, transaction, packaging, label, display graphics etc. Add to this the introduction of inkjet technology towards the end of the first decade of the new millennium, and we were at the cusp of digital print production going mainstream.
Today, both analogue and digital inkjet printing systems produce quality that’s now acceptable to the majority of end customers.
Fast-forward to today, and digital printing presses are omnipresent in all printing market segments – commercial, packaging, display graphics, label, direct marketing and transactional. We’re past the point where “digital” quality is in question. Analogue and digital printing systems produce quality that’s now accepted by clients – and the quality in many cases is virtually indistinguishable. The Idealliance G7 standards further enhanced the conformity across print production platforms. And, most printers have already added digital printing capabilities in the form of toner-based B&W and colour cut-sheet presses.
High-volume full-colour inkjet presses have now reached high quality and productivity levels, opening up new opportunities for printers. Inkjet presses have now lifted digital productivity levels into offset production territory with the obvious added advantage of short-run and variable-data print. Full-colour digital inkjet web presses such as the ones offered by Screen, Ricoh, HP, Xerox, Fujifilm and Canon/Océ, can reach speeds of up to 500 feet per minute. B2 full-colour digital inkjet sheetfed presses are now quickly gaining market acceptance with the Konica Minolta KM1 and the recently launched Fujifilm JPress 750s producing 3,000 and 3,600 sheets per hour respectively. In Canada, Flash Reproduction (Toronto) and Icon (Markham) acquired the KM1, and St. Joseph Communications (Toronto and Ottawa) acquired the JPress 720. Heidelberg, in turn, installed its first digital 7-colour inkjet press in the US at Warneke Paper Box. The Primefire 106 is a B1 press, using Fujifilm inkjet technology, currently running at speeds of up to 2,500 sheets per hour. These three “bigger format” inkjet presses also cater to the packaging industry.
Most print equipment manufacturers today are offering a full range of presses that combine offset and digital in some way using inkjet, dry toner or liquid toner. The list is long and I’m sure I’m forgetting some. But they include Fujifilm, Xerox, Ricoh, Konica Minolta, Screen, Canon, EFI, Agfa, Epson, Mimaki, HP, Durst, Heidelberg, Komori, Landa, Domino, Xeikon, Mark Andy, Kodak, Riso, Roland, Mutoh, Delphax and others. Most of them are offering solutions across the different verticals I previously mentioned – commercial, transactional, direct marketing, packaging, label, display graphics, etc.
That our industry has gone and still is going through a major transformation, would be an understatement. In the next section I’ll share with you what this all means to our industry, to help us “to not lose sight of the forest for the trees!”
The convergence of verticals
Technology, both hardware and software, has blurred the lines between the different verticals. The aforementioned acquisition by Transcontinental and its expansion into flexible packaging is obviously a prime example of convergence. But there are many more. PDI in Montreal, Lowe-Martin in Toronto, CJ Graphics in Mississauga, Cober in Kitchener, QuadriScan in Montreal and Hemlock in Burnaby, are just a few names that come to mind. All have expanded their offerings across various verticals. More importantly, they’re also cross-leveraging their digital and analogue technologies and expertise to grow their respective businesses – adding products that include display graphics, direct mail, packaging and more, while expanding their current client base. Equipment manufacturers have also invested a lot of money in developing workflow solutions, in a quest to enhance automation and productivity. Some software-centric organizations such as Ultimate TechnoGrahics and Esko offer workflow software suites that reach across the verticals and across pre-press, press and post-press platforms.
Cross-leveraging digital and analogue technologies
There are three major advantages that digital print production offers compared to analogue print production: (1) The ability to cost-effectively produce short runs; (2) The ability to meet short, tight deadlines; and (3) the ability to produce variable data and images. These three attributes have had a profound impact on how new revenue streams can be created – by leveraging the unique advantages of both digital printing with analogue technology.
When I refer to “cross-leveraging” digital and analogue, it involves printers using their existing analogue production capabilities while at the same time, taking advantage of their digital print production capabilities – and vice versa! This creates an array of opportunities to increase revenue streams. Your digital print production capabilities will attract work you could not efficiently produce before the acquisition of the technology. Here, I’ll explore three examples that illustrate the potential for additional revenue.
- Commercial book printing
Digital printing capability has had a major impact on the book industry. Where in the past one could only print a book based on a minimum order quantity ensuring a profitable offset print run, now digital print lets you print a “book of one.” This has encouraged more authors to print their books, which in turn has drastically increased the numbers of titles produced. A press release by Bowker (Oct. 10, 2018) illustrates this point: ”Self-publishing of print books (titles) increased by 38% in 2017…This is the fifth consecutive year of print growth.”
Where conventional offset printing is limited to a minimum-volume quantity to financially justify a viable print run, digital print does not have such a restriction. Book manufacturers also showed us how they can leverage their digital and analogue printing capabilities. They cited an example of where an initial book run was produced in limited quantities on a digital platform. Once the book proved to be a success, additional longer runs were produced using conventional offset printing. If, at the end of the book cycle, subsequent smaller re-runs were required, they simply reverted to producing the books on the digital print platform. This is a prime example where conventional and digital cross leverage gives the book manufacturer the ability to efficiently print a book throughout its complete lifecycle – thus creating additional, profitable revenue streams.
- Label printing and converting
Bill Myers, Marketing Manager of Digital Print for Domino Printing, indicates that the label-printing sector faces the same issues – shorter runs, faster turnarounds, reduced inventory and reduced waste. Flexo, the conventional print production process in this sector, is still ideal for long run lengths with minimal changes. Yes, run lengths are decreasing, but the number of different label runs are increasing – drastically. A quick stroll through the supermarket will show you how the label printing landscape has changed. As Myers mentions, manufacturers of food, beverage and consumer goods are continually generating new flavours, colours, scents, varieties and sizes. The demand for innovative ways to differentiate products by their packaging and labels continues to grow. That’s were digital printing comes in.
As in the earlier book-printing example, having both conventional flexo print capabilities and digital print capabilities gives the label printer/converter the ability to cross-leverage both technologies. With the addition of digital capabilities, the label printer/converter can now offer faster turnaround times, variable print capabilities, shorter runs, and so on, while attracting new clients and increasing “share of wallet” with their existing client base. In other words, digital printing offers complementary capabilities to the conventional flexo printing process.
The label printing/converting market has also seen an interesting development with the introduction of hybrid systems, or the integration of conventional flexo with digital inkjet production systems. On one hand you have a production run of a million static labels, so the conventional flexo press is the logical choice. On the other hand, if you only need to print a few thousand specialty labels, your logical choice would be a digital press, avoiding the cost of plates and longer set-up times inherent with the flexo press.
It becomes a challenge, however, when you want to be able to print long runs that include static information, combined with some variable data or variable imaging, while also having to add spot colours, varnish, die-cutting, etc. That’s where your hybrid press comes in, combining the best of both the worlds (flexo and digital), while creating the ability to print/convert complex label jobs that have both static and variable content, augmented by additional options. Deciding on acquiring a hybrid press depends on many factors. You not only need to understand the complexity of such a hybrid press, you will also need to consider the impact on your workflow, workload and operator training. Also consider its growth potential, the range of configurations and related applications that you want to produce on your hybrid press.
- Catalogue printing, direct marketing and display graphics
This example is probably one of the more striking instances of convergence, made possible by the combination of digital and analogue print production assets. In this case, the commercial printer in question leveraged both digital and conventional printing technologies to produce a wide spectrum of printed products for a large retail client. It used its Komori lithographic offset presses to produce the retailer’s catalogue, which was mailed to the client’s customer list and made available in their stores at the beginning of the campaign. This was subsequently followed up by three direct-mail campaigns spread over three seasons. The direct-mail campaigns make use of data collected from the client’s buying habits. This direct-mail piece contained variable data and images as well as a QR code, which in turn gave the client e-access to a wider range of versioned product offerings.
The personalized direct-mail pieces were printed 6-up on a digital inkjet sheetfed press and finished offline via a modular finishing process that included folding, die cutting, perforating, tipping (loyalty bonus card) and inserting. The marketing campaign also included interior signage and visual display products that were all printed on its Agfa Tauro Digital Wide-Format Press. The commercial printer also did the kitting and distribution of the printed materials to the different retail locations. This example, once again, shows the power of leveraging digital and analogue and coordinating multiple components of the retail client’s campaign – all while attracting a larger “share of wallet”
There’s no doubt that we’re long past the stage of asking ourselves whether we should use digital print production technologies or analogue print production technologies. Digital print production is now an integral part of our industry. The question should now be which specific digital print platforms best fit into your business model. Over the past five to ten years, the quality, cost structure, short-run and variable-data capabilities of digital have evolved to a level where they should now be an integral part of your equipment fleet.