The Current State and Future Prospects of the Japanese Printing Industry

The Current State and Future Prospects of the Japanese Printing Industry

Masahiro Yamaguchi
President
Japan Federation of Printing Industries

　　1. The current state of the Japanese printing industry and the background

　　Negative growth of the shipment value for 9 consecutive years

　　According to industrial statistics by Ministry of Economy, Trade and Industry, the  shipment value of the printing has decreased from a little under 9 trillion yen in 1997 to 7 trillion yen in 2006. Also the number of enterprises fell froｍ the peak of 48,000 in 1988 to 33,000 in 2006. The shipment value of 2008 has not been announced yet; however it might drop below 7 trillion yen in 2007.

　　Looking at the ratio of production values, publication printing was 11%, commercial printing was 46%, form printing was 12%, package printing was 10%, security printing was 3.3%, and special printing for electronic components such as a photo mask, a lead frame color filter for liquid crystal display and ancillary service was 17.7%.

　　Negative growth of the publication market and slow growth of the paper media

　　Publication market

　　“Monthly report of publication-January 2009” published by Research Institute for Publications reported that publication sales dropped a year on year 3.2% to 2.02 trillion yen in 2008, printed book sales dropped by 1.6% y/y to 890 billion yen, magazine sales dropped 4.5% y/y to 1.13 trillion yen.

　　The Printed book showed negative growth for the fourth consecutive year. Magazine sales marked 11 years consecutive drop, and sales figures did 13 straight years drop.

　　The reasons of this negative growth are the declining birthrate and sluggish sales of books relating to games. On top of that, the popularization of the internet made an impact. People tend to read over the internet instead of magazines, and this caused the decline of the magazine’s circulation.

　　Advertising market

　　According to the annual report “Advertising expenditure in Japan” published by the ad agency DENTSU, the expenditure was 6.6926 trillion yen in 2008, dropped by 4.7% y/y.  It declined for the first time in five years. The growth rate has fallen down from 3.0% to 2.9%, 1.7%, 1.1% and minus 4.7%. The cause was the negative growth of 4 traditional media markets, newspapers, publication, TV and radio in consecutive 4 years since 2005. It was also the result of the shift to the internet. “Advertising expenditure in Japan” stated that the emphasis on the cost effectiveness and popular usage of cross-media were major causes.

　　The growth of traditional media for advertisements and sales promotions was slowing down year on year for last 3 years, 3.6% up in 2005, 3.0% up, and 1.1% in 2007. On the other hand, the internet advertising expenditure grew rapidly at over 20% p.a., 670 billion yen in 2008 by 10% y/y.

　　Flyer kept expansion as the major printing market, though it came close to saturation and experienced minus growth in 2006 and 2007. Not because of economic reasons, it was due to the saturation of the market and the decline of the service and entertainment industries, which were the leading forces. This market was considered to stop rising around 2015, however it might happen earlier.

　　Last few years, what contributed for the printing industry were free papers, at least from the point of view of the quantity. The market of free papers/magazines rose from 212.5 billion yen in 2001 to 354.5 billion yen in 2008. The main target was used to be housewives, and still 46.5%. However, it has been changing now and increasing for young working women/ men, business men, and seniors. The distribution method was also changed, the ratio of newspaper inserts dropped significantly in last 2 years from 59.2% to 39.5%. Free paper stands were installed around shops and stations, and the distribution on streets was getting popular. Free papers have increased in this manner and published 10 billion copies p.a. Now, it seems to be leveling off.

　　The packaging market has trends of reducing quantities and costs responding to the environmental measures (Containers/Packaging Recycling Act). Simple packaging, function-conscious, cost-conscious and safety-conscious will be the basic themes. For food packages and containers, the widespread use of retort and aseptic packing and microwave-safe containers is expected. Also for seniors, the simple cooking packaging is required.
 
　　Introduction of IT into our daily life and penetration of internet

　　Nowadays, traditional media are declining, as the slump of publications and ailing newspapers, and then cross-media is becoming commonplace in advertising. Rapid increase of information distribution and free information are basic factors for this. The four major traditional media remained sluggish, on the other hand internet expanded. And also new media, free papers and mobiles, play large part. Network society had been believed just a dream in the past. With the high penetration rate of mobile phones, broadband and digital terrestrial receivers, now we can say that network society have been formed. 

　　People select and utilize media depend on situations, find goods on TV or in newspapers, specify items in catalogs, confirm details on an internet site and place an order through a mobile or PC.

　　It is also necessary for enterprises to understand media characters and work out a strategy. For instance, the paper media is adequate to express texture, such as fabrics which is hard to recognize on monitors. Meanwhile, there are some disadvantages, difficult to change items after catalogs are issued, and long lead time between product planning and publication of catalogs. Printing companies should understand characters of each media and be able to provide proposals. We became “the industry creating information value”.

　　2. Future prospects

　　Expansion of business field

　　The circumstance of printing industries is changing day by day. Means for transmitting information used to be limited, such as printed media (newspapers, books, magazines, catalogs and leaflets) and broadcast media (TV, radio). In these days, printing jobs were demanded automatically. With the progress of IT, various web media have emerged, such as mobiles, one-segment broadcasting, DVD, and digital broadcast.  Then paper media is leveling off or rather declining now. For the further development of printing industries, it is necessary to expand the market into fields around the printing. People tend to think that the printing is the process between the plates making to printing/bookbinding. However, it is more than that. Beginning with consideration of the purpose to print, through the planning and designing, there is the process of prepress, printing and binding/finishing. The delivery to users and the effectiveness measurement of that print are also included in “Printing”. Viewed in this light, there are more jobs before the traditional process and in post press process as finishing and logistics. With the development of these fields, the expansion of the work volume could be addressed.

　　For the expansion of business fields, it is too risky to open up a totally different field. It is necessary to find the business field related to existing printing technologies. Photoengraving technologies were used for IC boards, and data for the prepress are applied to internet contents business. The extensive use of technologies is important to expand business fields.

　　One of these challenges is the business with IC tags, which consists of IC chips and small antennas. Information can be read wirelessly by using special readers. For distribution business, they can be utilized to check manufacturing history and entering/dispatching from warehouse.  Also, they could contribute a lot to efficient operation and logistics management. Though there are still some kinks to be worked out, it is the field holding future growth potential.

　　The other challenge is the upgrade of digital printing machines, which were considered to be suitable for on-demand print “when needed, what needed, only the quantity needed”. The quality of machines has improved, but the usage is limited only in some fields. They have not been applied enough for commercial advertisement printings and publication printing.

　　However, because of the performance increase, there are more possibilities of wide use in broad printing markets. During Druppa 2008, the possibility of the usage for newspaper printing was appealed. They displayed the possibility to print on materials other than papers by taking advantage of the UV dry system. The quality of digital printing machines reached the good enough level for general printing, then it became possible to replace existing machines with them.

　　In the business form printing field, there are great expectation for data printing, wide format; large size POP, outdoor advertisement, vehicle marking and etc.
The size of Japanese digital printing market is 100 billion yen, and the ratio of the shipment of value is still small. However, the further growth can be expected a lot.

　　Future prospects of the printing industry

　　The trend of IT/digitization, networks, and cross-media is common for media, and changes societies significantly. This means that the social common awareness is changing and traditional ways of judgments and actions will not be accepted.
Printing lost the position as the independent print medium and became one of the choices of digital media. We have to find the way to survive in the social infrastructure caused by digital media.

　　In consideration of these circumstances, let’s look at the business.  In these days various information channels are diversified, and we have to consider utilization methods for the business. Digital media tend to be recognized as replacements of prints; however those are separately used for different demands. The strategy of information services should be reconsidered, and printing as “Communication service” should create new business. In the past, the profit was generated in proportion of the production volume. Now, the business will shift to the new style to be paid for the value of services. And also there will be solution business to meet customer demand in a comprehensive manner by using different media. In other words, “Solution” is the media management including printing and POD. When a small lot production is done by on-demand printing, it should be considered how to study the nature of business and how to customize for the best production performance.

　　Environmental preservation measures

　　The requirements of environmental conservation activities are increasing more and more as a part of corporate practices. It is the activity aiming sustainable development of the company. The resources problems as crude oil are coming up. The trading of carbon dioxide emission and the research of carbon footprint are gaining momentum. The media features the global environmental problems almost everyday. From the point of view of printing companies, resources and environment are inextricably linked. The printing production brings resource consumption with waste generation, such as waste plates, empty ink cans, waste papers, VOC and waste liquid. JFPI (Japan Federation of Printing Industry) has established “Green Printing Recognition System” and the recognition system of “Award to excellent environmental conscious factories”, and also makes voluntary efforts to control VOC emission. We are actively promoting environmental preservation measures.