By Mark Hanley
Each year, Digital Output asks analyst firm I.T. Strategies to offer a review and interpretation of the global market for digital wide format graphics printing. The company has gathered data directly from vendors alongside its own user research for nearly 20 years, which enables them to gain a specific perspective on the market.
It is a market largely driven by the consumer economy, which has been growing again, and it is always renewing its advertising needs. That generates a wide format digitally printed graphics market in which users pay over $40B per year for final printed output. It is still profitable, growing, and driven by constant technology improvement. Good news all around, and especially in the U.S. where the economy picked up in 2014.
It is always important to remind ourselves of the definitions behind the sectorization of this statistical review. In addressing the vendor community we have stayed with a systems architecture-based scheme of sectorization. But in turn the sectors are also naturally differentiated by core functionality and costs, which closely correspond to channel and market differences themselves. This is the schematic, comprised of five major segments—aqueous (AQ), eco-solvent (ES)/latex (LX), UV low end (LEUV), UV high end (HEUV), and analog.
AQ or roll to roll (R2R) AQ systems consist of a range of sizes, including 24-, 36-, 42-, 44-, and 60-inch wide systems.
ES/LX are combined. These are R2R systems deployed to print indoor and outdoor graphics within the huge global channel of small local R2R print service providers (PSPs)—over 200K worldwide—and which have benefited from the huge growth the outdoor graphics market has driven over the last ten-plus years.
LEUV is where UV systems mostly in flatbed format (UVLEFB), but with some R2R (UVLER2R) formats as well, are sold at acquisition prices under $200K.
HEUV is also made up of flatbed (UVHEFB) and R2R (UVHER2R) systems, which are workhorses for the bigger production print providers serving the largest accounts.
There is a persisting market for analog-printed display graphics, which is 3/4 offset dominated, with the rest screenprinting.
Units of Sale/Vendor Revenues
Unit sales and hardware and ink vendor revenue data say that the overall market is mildly declining, but that within the overall scope, ES/LX and UV are growing over the five year period. I.T. Strategies makes its most conservative estimates in these projections based on the historical market trend line. These numbers do not tell the whole story. It would be wrong to call wide format graphics a market soon trending to maturity and a replacement dynamic.
That is because the wide format graphics market has acted as a capitalist market should and has been competitive resulting in greatly increased efficiency of technology for ever lower prices. Vendors have taken the price hit mostly on the hardware and less in the area of ink. Measuring a market by supply parameters describing more efficient systems in a competitive price market does not adequately describe demand for the product, which is in the end the truest measure of market maturity.
Printed Square Meters
The picture for square meters printed derived from separate researches among users. The quantities of ink sold and the yields of inks tells us a different story with a greater decline in AQ and a stronger growth in ES/LX and UV. This reflects the higher performance of new technology, constantly improving economics, and the large installed base built over many years.
The shift implicit in this data from AQ to ES/LX systems on the part of PSPs is in essence a vote for wider and more universal indoor/outdoor functionality as well as in favor of better economics and lower costs.
Development Sector Issues
Wide format graphics as whole was largely affected by multiple technologies in the past year. This includes ES/LX products, soft signage/dye-sublimation (dye-sub), industrial markets, high-throughput flatbeds, and UV LED.
Rate of Sale of ES/LX & UVLEFB
Units of sale of systems sales in the ES/LX sector grew comfortably as did units of systems sales in the UVLEFB sector, exhibiting compound annual growth rates (CAGRs) in 2012 to 2014 of ten and 14 percent, respectively.
The market is made up of the installed base and all the ink and media sold into it beyond just the new systems additions made to it in any one year. So the good growth of these two sectors measured by units sold is a function of the vibrancy of these sectors, which combine mid-large markets with healthy growth, and as such really lead the wide format graphics market.
Dye-sub printing had in the past been principally deployed for soft or fabric signage as an environmentally and installation-friendly alternative to substrates like vinyl. Some printing of apparel was also undertaken using both dye-sub and traditional fabric inks with the same systems to support sampling, strike off, and specialty. The split was about 75/25. Externally to wide format graphics, dye-sub has however developed in the last two to three years into the sportswear and apparel markets.
Industrial and Wide Format
Wide format graphics markets have served as a kind of breeding ground for some early industrial markets—industrial being loosely defined here as substrates that are printed as part of some larger manufacturing process—where print is a process component, not the main process going to make the product saleable.
Within the UVHEFB category there is a sub-sector of products that are sold for over $1M and whose throughput attains 6,000 square feet per hour and above. We refer to them as super high-end UV flatbed systems. These systems deploy fixed array or large array printhead architectures. The CAGR for unit sales of such systems 2013 to 2014 was over 19 percent.
LED UV Curing
LED curing in the display graphics UV inkjet market is an important component in the mix for the much bigger UV inkjet future beyond just wide format graphics, but also within wide format graphics. Most UV vendors recognize the capability of UV inkjet in the future, and that this is a young technology capable of many further cycles of development.
Mark Hanley, president, I.T. Strategies, has over 20 years of experience in the electronic printing industry. He specializes in identifying new markets for digital color printing technologies. In addition to conducting research and consulting, he travels extensively around the world, facilitating partnerships and strategic alliances between manufacturers in Europe, Japan, and the U.S.
Some of the key statistics in this year’s report illustrate the sectorization of the market. There is no merging of technologies. While many continue to advance, for example UV and its counterpart UV LED, each type of ink set or technology remains in play. R2R and UVHEFB/UVLEFB are thriving, especially those printers in the super high-end system segment. Dye-sub and other methods of fabric printing are moving from signage to décor and apparel. Solvent remains a viable option and its sub-segment ES/LX is experiencing growth. Print is thriving and there is no shortage of options. Continue to follow Digital Output as we cover the newest announcements, introductions, and promotions.
Aug2015, Digital Output