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2009 Web Offset Survey

Dec 1, 2009 12:00 AM


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This article is 7 pages long.
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Who are you?

Our survey respondents report an average of 104 employees.

26% run heatset web and sheetfed presses, but no coldset

23% run heatset, coldset and sheetfed

17.5% run coldset and sheetfed, but not heatset

17.5% run coldset only

5% run heatset only

9% do not run sheetfed presses (web only)

2% no reply

Resilience, relevance keys to success in 2010

Web offset printers, the largest segment of the industry in terms of print volume and sales, are retrenching after a tough year. As the world economy declined, the U.S. print industry suffered along with it.

Almost 390 magazines closed in the first nine months of 2009 while just 259 new titles launched, according to Oxbridge Communications' Mediafinder.com, continuing last year's downward trend (525 magazines closed in 2008; 335 were launched). This year saw the end of print titles including Conde Nast's Gourmet, founded in 1941; Ziff Davis' PC Magazine; and Alpha Media's Blender, which survived less than 10 years. Magazine Publishers of America's Publishers Information Bureau reports total magazine ad pages declined 26.6% in the third quarter of 2009 vs. Q3 2008.

Postmaster General John Potter has said the USPS will not raise rates in 2010 for market dominant products (First-Class, Standard, periodicals and single-piece parcel post). But catalog mailers are still waiting for a special prospecting rate, which didn't materialize as hoped, this year. In Multichannel Merchant's (a sister magazine in the Penton Media fold) January 2009 article, “Get back to prospecting basics in 2009,” catalog consultant Todd Miller shared this tip: “Reduce the timeframe between the delivery of the initial catalog request and the subsequent mailing. Many companies … let months pass in between catalog mailings. Strike while the iron is hot. Get a second book in the mail within four to six weeks after the initial catalog request fulfillment.” We couldn't agree more.

While the industry is in the early stages of a turnaround (see http://napl.typepad.com), NAPL chief economist Andy Paparozzi stresses that structural changes in the industry will hold some printers back. New opportunities exist among the old challenges of price pressure, rising costs, shrinking inventories, and competition from the Internet and other channels. Going beyond the commodity business requires new strategies, equipment and skill sets. Savvy printers are partnering with their customers to add value through services such as content management, Web to print, multichannel output, and mailing and fulfillment.

Heavy metal

AMERICAN PRINTER publishes this report annually for the web offset market, the largest print industry segment in terms of print and sales volume. The study is prepared in conjunction with the market-ing research department of parent company Penton Media (www.penton.com).

We would especially like to thank our sponsor, Goss Intl. (www.gossinternational.com).

Page 2 of 7

2009 vs. 2010

On average, web printers have run their presses 5.2 days per week in the past 12 months. Their 2010 predictions indicate a very modest increase (5.3 days).

Some web printers continue to suffer from overcapacity

Too much 40.5%
Balanced 40.5%
Not enough 19%

Beyond print

What percentage of your total revenue is derived from ancillary services (anything except ink on paper)?

No revenue 9%
Don't know 5%
1-19% 28%
20-39% 39%
40-59% 14%
60-79% 5%

What price paper?

Paper prices fell approximately $100 per ton from April 2008 to April 2009 (see “Paper prices fall again,” Multichannel Merchant, www.multichannelmerchant.com). But as demand ticks upward, so do prices.

More than half of our survey respondents expect to see rising prices for both coated and uncoated papers in 2010. Additionally, 23% expect to see newsprint prices increase, and 14% expect a hike for supercalendered.

‘Kindle’-ing concern

Web offset printers are concerned about competition from e-readers such as Amazon's Kindle and Barnes & Noble's nook.

Yes, extremely 16%
Yes, somewhat 33%
Yes, slightly 26%
No, not at all 18%
Too early too tell 5%

Web vs. sheetfed

With automation reducing waste, makeready times and run-length thresholds, do you see opportunities to shift more work from sheetfed offset to web offset?

More likely to shift from web to sheetfed 9%
No shift at all 32%
Some shift to web 42%
Significant shift to web 16%

Page 3 of 7

Are we there yet?

Do you see any signs of economic recovery in your market?

No 21%
Yes 39%
Too early to tell 40%

One web printer reports: “Sales volume is still running behind last year, but the gap is narrowing slightly.”

Big enough, thank you

With the introduction of web presses that print up to 96 magazine pages per impression, would you consider purchasing such a large-format press to increase efficiency and reduce labor?

No 77%
Yes 18%
Only for specialty or niche applications
“Good for a long-run pub plant.”
4%:

Makeready metrics

Average makeready time: heatset
0-45 minutes 37%
46-60 minutes 18%
61-75 minutes 14%
75-105 minutes 2%
106-120 minutes 0%
More than 2 hours 4%
Average makeready time: coldset
0-45 minutes 44%
46-60 minutes 11%
61-75 minutes 18%
75-105 minutes 0%
106-120 minutes 4%
More than 2 hours 0%
Average makeready waste
0-5% 53%
6-10% 35%
11-15% 5%
16-20% 5%
No reply 2%
Average running waste
0-5% 61%
6-10% 23%
11-15% 12%
16-20% 2%
No reply 2%

Page 4 of 7

WOA calls for Print Award entries

The Web Offset Assn. (WOA), a special interest group of Printing Industries of America, is accepting entries from printers around the world in the 2010 WOA Annual Print Awards Competition. The competition also is open, for free, to graphic arts students at the high school or college level. In addition to global recognition, winners will receive a complimentary registration to the Offset and Beyond Conference, May 17-19, 2010 in Baltimore, MD. The deadline for entries is January 29, 2010. See www.printing.org/printawards.

Newspaper blues

In 2009, many U.S. newspapers struggled to contend with weak advertising markets, declining readership, new media competition and other challenges. How has this impacted your business?

Substantial negative impact 12%
Moderate negative impact 26%
Slight negative impact 25%
No impact 28%
Slight positive impact 2%
Not applicable to my market/specialty 7%

2009 market dynamics

U.S. automotive, financial and real estate markets have undergone unprecedented transformations in 2009. How has this impacted your business?

Substantial negative impact 19.5%
Moderate negative impact 28%
Slight negative impact 28%
No impact 19.5%
Not applicable to my market/specialty 5%

What are your 3 biggest challenges today?

Declining demand for printed products 51%
Commodity pricing 46%
Increasing paper prices 33%
Limited capital for improvements 30%
Selecting new directions for future growth 28%
Rising postage costs 28%
Lack of skilled employees 26%
Rising energy costs 18%
Production inefficiencies 12%
Selecting new technologies 5%
Environmental issues 4%
Other 2%*

* “Rising healthcare costs.”

What is the best way to improve your production efficiency?

Improve the front-end link from customer to prepress 23%
Improve planning and scheduling process 21%
Improve postpress operations 12%
Install new production equipment 10.5%
Obtain better data on plant productivity 10.5%
Advanced pressroom training 10.5%
Speed press makeready 7%
No reply 5.5%

Which print processes threaten web offset volume?

Digital printing (toner, variable-data) 51%
High-speed inkjet presses 49%
Perfecting sheetfed presses 26.5%
No reply 10.5%

With shrinking runs, digital's variable data flexibility, and high-speed inkjet's sights set on books, transactional/transpromo and newspapers, web printers are concerned.

Page 5 of 7

Drying development

Following PRINT 09, Shanghai Electric (Group) Corp. completed its investment, initiated in June 2009, to become the second largest shareholder of Goss Intl. (Bolingbrook, IL).

At the show, Goss introduced a new Ecochill enhancement for existing heatset dryers. It uses proven technologies from Goss Ecocool dryers to eliminate condensate on the chill rollers, preventing print defects such as smearing and ink picking, and allowing web presses to run at higher speeds. The enhancement eliminates the need for a smoke tunnel and is available as a retrofit on all Goss Ecotherm and Ecoweb dryers, as well as some dryers manufactured by other suppliers.

See www.gossinternational.com.

Magazines rock

“The Twenty Tweetable Truths About Magazines,” from Magazine Publishers of America, shares facts that showcase magazine vitality in 140 characters or less. See www.magazine.org/research/twenty-tweetable-truths.aspx.

How green are you?

Our survey indicates room for improvement on the environmental front.

Eco-certifications

FSC 56%
SFI 21%
PEFC 3.5%
None of the above 44%
Other 2%

What percentage of your paper is FSC certified?

No reply 5%
Less than 5% 30%
6-10% 19%
11-15% 14%
16-20% 2%
21-30% 12%
31-40% 5%
41-50% 9%
More than 50% 4%

What percentage of your paper is recycled?

No reply 3%
Less than 5% 28%
6-10% 23%
11-15% 9%
16-20% 7%
21-30% 5%
31-40% 9%
41-50% 2%
More than 50% 14%

Page 6 of 7

Well done!

Congratulations out to our web offset winners in the 2009 Environmental Excellence Awards: EarthColor, Williamson Printing and The John Roberts Co. See www.americanprinter.com/environment/excellence-awards.

Custom print captivates

According to a 2009 national poll by Roper Public Affairs on behalf of the Custom Publishing Council (www.custompublishingcouncil.com), print remains consumers' preferred medium for custom content.

Fifty-nine percent of respondents say they pick up and look through print custom publications.

Of these, 56% would rather receive a print version than an electronic one. Thirty-seven percent prefer receiving publications electronically.

Eighty-three percent of the CMOs responding to the Roper study in 2006 agreed that too many custom publications were “still thinking mainly about print rather than recognizing the potential for integrated marketing across platforms.” Eighty-nine percent would use custom media more if there were a good way to measure ROI.

Worldcolor emerges

Montreal-based Quebecor World officially emerged from U.S. and Canadian bankruptcy protection this summer as Worldcolor (not “Novink” as formerly planned). The company has owned the World Color brand since Quebecor Printing Inc.'s 1999 merger with Greenwich, CT-based World Color Press Inc. Quebecor rejected an acquisition offer from R.R. Donnelley during the bankruptcy proceedings. Worldcolor has approximately 20,000 employees working in approximately 90 printing and related facilities in the United States, Canada, Argentina, Brazil, Chile, Colombia, Mexico, and Peru.

See www.worldcolor.com.

How are your customers reacting to rising postal costs?

Mailing fewer pieces 61%
Reducing mailing frequency 46%
Reducing page counts 46%
Reducing paper basis weight 42%
Moving more print to electronic media (online) 35%
Changing trim sizes 32%
Comailing 19%

Report shows consumers value mail

The Chief Marketing Officer (CMO) Council (www.cmocouncil.org) and InfoPrint Solutions Co.'s (www.infoprint.com) latest study, “Why Relevance Drives Response and Relationships: Using the Power of Precision Marketing to Better Engage Customers,” shows consumers still value traditional mail.

  • 73% of consumers would be open to receiving print statements if mailed materials were recyclable or part of a sustainability program.
  • Nine out of 10 consumers open monthly bills delivered via traditional mail, vs. 72% who open bills delivered via e-mail.
  • When given the opportunity to choose, 51% of consumers prefer to receive product or service promotions via traditional mail, while 44% prefer e-mail.

Download the complimentary summary report of findings at www.precisionpromotion.org.

Page 7 of 7

What is the best way to improve profitability?

Develop sales in new markets 47%
Improve the cost of manufacturing 23%
Sell more to existing clients 11%
Specialize in a targeted market niche 7%
Better understand what types of jobs your company prints more profitably 5%
Add more non-print services 2%
Merge/acquire a new company 2%

“Add more new customers.”

Technology trends

Bleeding edge or leading edge?

Web offset printers value continuous investment in new technology.

No answer 1%
1 = Not at all important 2%
2 7%
3 30%
4 28%
5 = Extremely important 32%

Bring us that horizon

Where in the web offset production process do you expect to see key innovation or important progress in technology over the next five years?

Hybrid press technology 19%
Production workflow 16%
Inline finishing 16%
Digital soft proofing 12%
Press controls 11%
Makeready 9%
Color management 9%

Digital still looks good

Which do you plan to purchase in the next 12 months?

Digital presses (toner-based, variable-data) 32%
Mailing/distribution capability 21%
Computerized management information systems 18%
Sheetfed offset presses 16%
Heatset web offset presses 14%
High-speed inkjet presses 11%
Digital soft proofing systems 9%
Four-color proofing systems 7%
Coldset/open web presses 5%
Hybrid web offset presses 0%
Other: “UV web presses” 7%

Automation on the rise

How useful is integrated automation in your operation today?

Not at all useful 9%
Somewhat useful 35%
Extremely useful 39%
Don't know/no reply 17%

How useful will an integrated and automated process be in 3 to 5 years?

Not at all useful 4%
Somewhat useful 28%
Extremely useful 56%
Don't know 12%

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