2006 Graphic Arts Market Demographic Profiles

EXECUTIVE SUMMARY

THE U.S. COMMERCIAL PRINTING MARKETS

Market Demographics

Industry Profile

Key Industry Trends

Outlook for the Commercial Printing Business

THE U.S. DESIGN & PRODUCTION MARKET

Market Demographics

Industry Profile

Key Market Trends

Outlook for the Design and Production Business

THE U.S. PUBLISHING MARKET

Market Demographics

Industry Profile

Key Industry Trends

Outlook for the Publishing Business

INTRODUCTION

HOW TO USE THIS REPORT

Printers, Designers, Publishers—and Their Clients

Investors

Vendors

Researchers and Analysts

HOW THIS REPORT IS ORGANIZED

FOR MORE INFORMATION

SECTION 1: THE U.S. COMMERCIAL PRINTING MARKETS

MARKET DEMOGRAPHICS

Census Bureau

TWGA Market Demographics

Press Characteristics

Equipment and Customers

Individual Printing Markets

Large Commercial Printers

Book and Magazine Printers

Commercial/Quick Printers

Quick Printers

Other Commercial Printing

INDUSTRY PROFILE

Business Conditions

Business Challenges

Sales Opportunities

Planned Investments

KEY INDUSTRY TRENDS

Continued Changes in the Demand for Print

Digital Workflow

Offshoring

Digital Printing

Web-to-Print

Remote Proofing

“Downmarket” Print Buying

In-House Design/IT

OUTLOOK FOR THE COMMERCIAL PRINTING BUSINESS

Sheetfed Offset Shops

Quick Print Shops

Nonheatset Web Printers

Heatset Web Printers

Prepress Firms

SECTION 2: THE U.S. DESIGN & PRODUCTION MARKETS

MARKET DEMOGRAPHICS

Census Bureau

TWGA Markets and Demographics

Creatives and Their Work

INDUSTRY PROFILE

Business Conditions

Business Challenges

Sales Opportunities

Planned Investments

KEY MARKET TRENDS

Improved Business Conditions

Media Mix

Digital Printing

Competition From Clients and…Printers?

Commoditization of Design

Rich Media

OUTLOOK FOR THE DESIGN AND PRODUCTION BUSINESS

Ad Agencies

Graphic Designers

Corporate Design Departments

Commercial Photographers

SECTION 3: THE U.S. PUBLISHING MARKET

MARKET DEMOGRAPHICS

Census Bureau

TWGA Markets and Demographics

INDUSTRY PROFILE

Business Conditions

Business Challenges

Sales Opportunities

Planned Investments

KEY MARKET TRENDS

Improving Business Conditions

Media Mix Revisited

Production Workflow

OUTLOOK FOR THE PUBLISHING BUSINESS

Magazine Publishers

Catalog Publishers

Book Publishers

APPENDIX: TWGA METHODOLOGY

TRENDWATCH GRAPHIC ARTS TODAY

HISTORIC BACKGROUND

SURVEY DESIGN

Survey Sampling, Incentives and Response Rates

Sampling Strategy

Non-Response Bias

Other Background Research

WHO’S WHO AT TRENDWATCH

TrendWatch Report Editorial and Production

Table of Figures

FIGURE 1: COMMERCIAL, QUICK PRINTERS BY EMPLOYEE SIZE, 2002 VS. 2004

FIGURE 2: TWGA BUSINESS CONDITIONS INDEX, PRINT AND PREPRESS FIRMS, 1995- 2005

FIGURE 3: WHAT PERCENTAGE OF YOUR CURRENT DESIGN WORK IS…, ALL DESIGN & PRODUCTION FIRMS, WINTER 2004/2005

FIGURE 4: TWGA BUSINESS CONDITIONS INDEX (BCI), DESIGN & PRODUCTION FIRMS, 1996-2006

FIGURE 5: TWGA BUSINESS CONDITIONS INDEX (BCI), PUBLISHING FIRMS, 1996- 2005

FIGURE 6: U.S. PRINTING AND PREPRESS ESTABLISHMENTS, 2005-2006

FIGURE 7: VALUE OF U.S. PRINT AND PREPRESS SHIPMENTS, 2005-2006 ($1,000)

FIGURE 8: NEW CAPITAL EXPENDITURES, 2005-2006 ($1,000)

FIGURE 9: ESTIMATED U.S. PRODUCTION WORKSTATIONS IN PRINT AND PREPRESS BUSINESSES, 2005-2006

FIGURE 10: ESTIMATED U.S. PRODUCTION SERVERS IN PRINT AND PREPRESS BUSINESSES, 2005-2006

FIGURE 11: AMOUNT TO BE INVESTED IN NEW COMPUTERS, ALL PRINT AND PREPRESS BUSINESSES, 2005-2006 ($1,000)

FIGURE 12: AMOUNT TO BE INVESTED IN NEW SOFTWARE, ALL PRINT AND PREPRESS BUSINESSES, 2005-2006 ($1,000)

FIGURE 13: COMMERCIAL, QUICK PRINTERS BY EMPLOYEE SIZE, 2002 VS. 2004

FIGURE 14: ALL COMMERCIAL AND QUICK PRINTING ESTABLISHMENTS, 1971-2004

FIGURE 15: NUMBER OF ESTABLISHMENTS, BOOK AND MAGAZINE PRINTERS, HISTORICALLY

FIGURE 16: NUMBER OF BOOK AND MAGAZINE PRINTERS, BY EMPLOYEE SIZE, 2005

FIGURE 17: PLANTS WITH SHEETFED OFFSET PRESSES, HISTORICALLY

FIGURE 18: PLANTS WITH PRESSES NO LARGER THAN OFFSET DUPLICATORS, HISTORICALLY

FIGURE 19: TWGA BUSINESS CONDITIONS INDEX, PRINT AND PREPRESS FIRMS, 1995-2005

FIGURE 20: BUSINESS CONDITIONS FOR OUR FIRM IN THE PAST 12 MONTHS HAVE BEEN

FIGURE 21: WE EXPECT BUSINESS CONDITIONS IN THE NEXT 12 MONTHS TO BE…, ALL PRINT AND PREPRESS FIRMS, FALL 2005

FIGURE 22: TOP BUSINESS CHALLENGES, ALL PRINT AND PREPRESS FIRMS, FALL 2005

FIGURE 23: TOP SALES OPPORTUNITIES, ALL PRINT AND PREPRESS FIRMS, FALL 2005

FIGURE 24: TOP PLANNED INVESTMENTS, ALL PRINT AND PREPRESS FIRMS, FALL 2005

FIGURE 25: TOTAL ESTIMATED U.S. DESIGN & PRODUCTION ESTABLISHMENTS, 2005-2006

FIGURE 26: TOTAL ESTIMATED U.S. DESIGN & PRODUCTION REVENUES, 2005-2006 ($1,000)

FIGURE 27: TOTAL ESTIMATED U.S. DESIGN & PRODUCTION NEW CAPITAL EXPENDITURES, 2005-2006 ($1,000)

FIGURE 28: TOTAL ESTIMATED U.S. DESIGN & PRODUCTION WORKSTATIONS, 2005- 2006

FIGURE 29: TOTAL ESTIMATED U.S. DESIGN & PRODUCTION SERVERS, 2005-2006

FIGURE 30: TOTAL ESTIMATED U.S. DESIGN & PRODUCTION NEW COMPUTER PURCHASES, 2005-2006 ($1,000)

FIGURE 31: TOTAL ESTIMATED U.S. DESIGN & PRODUCTION SOFTWARE EXPENDITURES, 2005-2006 ($1,000)

FIGURE 32: WHAT PERCENTAGE OF YOUR CURRENT DESIGN WORK IS… ALL DESIGN & PRODUCTION FIRMS, WINTER 2004/2005

FIGURE 33: TWGA BUSINESS CONDITIONS INDEX (BCI), DESIGN & PRODUCTION FIRMS, 1996-2006

FIGURE 34: BUSINESS CONDITIONS IN THE PAST 12 MONTHS HAVE BEEN…, ALL DESIGN & PRODUCTION FIRMS, WINTER 2005/2006

FIGURE 35: WE EXPECT BUSINESS CONDITIONS IN THE NEXT 12 MONTHS TO BE

FIGURE 36: TOP BUSINESS CHALLENGES, ALL DESIGN & PRODUCTION FIRMS, WINTER 2005/2006

FIGURE 37: TOP SALES OPPORTUNITIES, ALL DESIGN & PRODUCTION FIRMS, WINTER 2005/2006

FIGURE 38: TOP PLANNED INVESTMENTS, ALL DESIGN & PRODUCTION FIRMS, WINTER 2005/2006

FIGURE 39: TOTAL ESTIMATED U.S. PUBLISHING ESTABLISHMENTS, 2005-2006

FIGURE 40: TOTAL ESTIMATED U.S. PUBLISHING REVENUES, 2005-2006 ($1,000)

FIGURE 41: TOTAL ESTIMATED U.S. PUBLISHING NEW CAPITAL EXPENDITURES, 2005- 2006 ($1,000)

FIGURE 42: TOTAL ESTIMATED U.S. PUBLISHING WORKSTATIONS, 2005-2006

FIGURE 43: TOTAL ESTIMATED U.S. PUBLISHING SERVERS, 2005-2006

FIGURE 44: TOTAL ESTIMATED U.S. PUBLISHING NEW COMPUTER PURCHASES, 2005- 2006 ($1,000)

FIGURE 45: TOTAL ESTIMATED U.S. PUBLISHING SOFTWARE EXPENDITURES, 2005- 2006 ($1,000)

FIGURE 46: TWGA BUSINESS CONDITIONS INDEX (BCI), PUBLISHING FIRMS, 1996-2005

FIGURE 47: BUSINESS CONDITIONS IN THE LAST 12 MONTHS, HAVE BEEN PUBLISHING FIRMS, SUMMER 2005

FIGURE 48: WE EXPECT BUSINESS CONDITIONS IN THE NEXT 12 MONTHS TO BE ALL PUBLISHING FIRMS, SUMMER 2005

FIGURE 49: TOP BUSINESS CHALLENGES, ALL PUBLISHING FIRMS, SUMMER 2005

FIGURE 50: TOP SALES OPPORTUNITIES, ALL PUBLISHING FIRMS, SUMMER 2005

FIGURE 51: TOP PLANNED INVESTMENTS, ALL PUBLISHING FIRMS, SUMMER 2005

Table of Tables

TABLE 1: THE PRINTING INDUSTRY BY NAICS AND ESTABLISHMENTS, 2002

TABLE 2: DIRECT MAIL ADVERTISING PRINTERS (NAICS 54186), ESTABLISHMENTS AND RECEIPTS, 2002

TABLE 3: PRINTING INDUSTRY ESTABLISHMENTS, SHIPMENTS, AND CAPITAL EXPENDITURES, 2005-2006

TABLE 4: ESTIMATED PRODUCTION WORKSTATIONS AND SERVERS IN PRINT AND PREPRESS BUSINESSES, 2005-2006

TABLE 5: ESTIMATED SPENDING ON NEW COMPUTERS/SOFTWARE, ALL PRINT AND PREPRESS BUSINESSES, 2005-2006

TABLE 6: TOP CHALLENGES, OPPORTUNITIES, AND INVESTMENTS, ALL PRINT AND PREPRESS FIRMS, FALL 2005

TABLE 7: GRAPHIC DESIGN NAICS CODES AND ESTABLISHMENTS, 2002

TABLE 8: ADVERTISING AGENCY NAICS CODES AND ESTABLISHMENTS, 2002

TABLE 9: ESTABLISHMENTS, REVENUES, AND EXPENDITURES, DESIGN & PRODUCTION FIRMS, 2005-2006

TABLE 10: TOTAL ESTIMATED U.S. DESIGN & PRODUCTION WORKSTATIONS AND SERVERS, 2005-2006

TABLE 11: COMPUTER/SOFTWARE EXPENDITURES, DESIGN & PRODUCTION FIRMS, 2005-2006

TABLE 12: TOP CHALLENGES, OPPORTUNITIES, INVESTMENTS, ALL DESIGN & PRODUCTION FIRMS, WINTER 2005/2006

TABLE 13: U.S. PUBLISHING NAICS CODES AND ESTABLISHMENTS, 2002

TABLE 14: ESTABLISHMENTS, REVENUES, AND NEW CAPITAL EXPENDITURES, PUBLISHERS, 2005-2006

TABLE 15: TOTAL WORKSTATIONS AND SERVERS, ALL PUBLISHERS, 2005-2006

TABLE 16: COMPUTER/SOFTWARE EXPENDITURES, PUBLISHERS, 2005-2006

TABLE 17: TOP CHALLENGES, OPPORTUNITIES, AND INVESTMENTS, ALL PUBLISHING FIRMS, SUMMER 2005

TABLE 18: INDUSTRIES INCLUDED IN PRINTING BY NAICS CODE, 2002

TABLE 19: THE PRINTING INDUSTRY BY NAICS AND ESTABLISHMENTS, 2002

TABLE 20: DIRECT MAIL ADVERTISING PRINTERS (NAICS 54186), ESTABLISHMENTS AND RECEIPTS, 2002

TABLE 21: COMMERCIAL AND QUICK PRINTING ESTABLISHMENTS BY EMPLOYEE SIZE, 1971-2004

TABLE 22: OTHER COMMERCIAL PRINTERS

TABLE 23: BUSINESS CONDITIONS FOR OUR FIRM IN THE PAST 12 MONTHS HAVE BEEN

TABLE 24: WE EXPECT BUSINESS CONDITIONS IN THE NEXT 12 MONTHS TO BE…, PRINT AND PREPRESS FIRMS BY MARKET, FALL 2005

TABLE 25: TOP BUSINESS CHALLENGES, PRINT AND PREPRESS FIRMS BY MARKET, FALL 2005

TABLE 26: TOP SALES OPPORTUNITIES, PRINT AND PREPRESS FIRMS BY MARKET, FALL 2005

TABLE 27: TOP PLANNED INVESTMENTS, PRINT AND PREPRESS FIRMS BY MARKET, FALL 2005

TABLE 28: GRAPHIC DESIGN NAICS CODES AND ESTABLISHMENTS, 2002

TABLE 29: ADVERTISING AGENCY NAICS CODES AND ESTABLISHMENTS, 2002

TABLE 30: WHAT PERCENTAGE OF YOUR CURRENT DESIGN WORK IS… DESIGN & PRODUCTION FIRMS BY MARKET, WINTER 2004/2005

TABLE 31: BUSINESS CONDITIONS IN THE PAST 12 MONTHS HAVE BEEN…, DESIGN & PRODUCTION FIRMS BY MARKET, WINTER 2005/2006

TABLE 32: WE EXPECT BUSINESS CONDITIONS IN THE NEXT 12 MONTHS TO BE DESIGN & PRODUCTION FIRMS BY MARKET, WINTER 2005/2006

TABLE 33: TOP BUSINESS CHALLENGES, DESIGN & PRODUCTION FIRMS BY MARKET, WINTER 2005/2006

TABLE 34: TOP SALES OPPORTUNITIES, DESIGN & PRODUCTION FIRMS BY MARKET, WINTER 2005/2006

TABLE 35: TOP PLANNED INVESTMENTS, DESIGN & PRODUCTION FIRMS BY MARKET, WINTER 2005/2006

TABLE 36: U.S. PUBLISHING NAICS CODES AND ESTABLISHMENTS, 2002

TABLE 37: BUSINESS CONDITIONS IN THE LAST 12 MONTHS, HAVE BEEN PUBLISHING FIRMS BY MARKET, SUMMER 2005

TABLE 38: WE EXPECT BUSINESS CONDITIONS IN THE NEXT 12 MONTHS TO BE

TABLE 39: TOP BUSINESS CHALLENGES, PUBLISHING FIRMS BY MARKET, SUMMER 2005

TABLE 40: TOP SALES OPPORTUNITIES, PUBLISHING FIRMS BY MARKET, SUMMER 2005

TABLE 41: TOP PLANNED INVESTMENTS, PUBLISHING FIRMS BY MARKET, SUMMER 2005