The Internet was supposed to virtually do away with the need for the printed page. But dot-coms are actually turning out to be the biggest boon that the local commercial printing industry has seen in years.
The stakes are bigger than you might think.
Los Angeles County is the nation's third-largest commercial printing hub, behind New York and Chicago. As of 1998, the most recent year available, L.A. had 2,126 commercial printers that employed 36,892 workers and generated annual sales of $4.86 billion, according to the Printing Industries of America Inc.
And that industry rather than being displaced by the Internet, as once feared is being fueled by it.
"The Internet has done a very good job of creating a need for direct mail printing, because you can't get people to look at your Web site by posting an online message saying, 'Look at me,'" said Tom Stodola, director of management services at the Printing Industry Association of Southern California. "The only way you can do that is to send out a direct-mail piece and say, 'Now, look at me.'"
Adding urgency to the growing demand for printing services is the fact that Internet startups have only a small window of opportunity to differentiate themselves from the competition and establish themselves as a market leader rather than a follower. To that end, they require lots and lots of printed marketing materials.
"They need to make a big splash and they have a lot of venture capital," said David Tobman, vice president with Automation Printing, a family-owned business in downtown Los Angeles. "Whatever they print, it has to be very fancy and a great design."
According to Tobman, Automation Printing signs up one or two new Internet companies every month. In addition to printing brochures, postcards, stickers and other mass-marketing paraphernalia for start-up companies, the print shop has also invested in digital equipment to better serve its new clientele.
This equipment allows a company to send its printing jobs to Automation Printing's shop electronically. It can then be printed directly, without the use of plates or film, which are used in the conventional printing process. Digital printers are far superior in quality to office laser printers, and they make it economically feasible to print small quantities of high-quality materials.
"The people at these companies are used to doing anything by computer, and digital printing is very conducive to the way they work," said Tobman. "It allows them to customize printing jobs for specific clients, and they can print what they need, when they need it."
Automation Printing was the first local commercial printer to invest in a $500,000 digital printing press six years ago. Now the company which has been in business for 50 years and traditionally works for large corporations, real estate and financial services firms sees an increasing proportion of its business coming from dot-coms.
"For awhile there was a view that printers would no longer be needed, but that didn't turn out to be the case," said Douglas Haines, coordinator of printing services at Pasadena City College. "The Internet has not taken away the base work in advertisements, catalogs and direct mail, but has instead added another niche market to the industry."
Of course, it's not just the Internet that has added new business for local printers. Burdge Inc. in the City of Commerce, for example, specializes in corporate stationery, and has seen double-digit growth over the last four years because of an explosion of new companies in all kinds of industries.
"Corporate downsizing has created a lot of work for us because there are more smaller companies now in the place of a few large ones," said Don Burdge, the company's president. "The trend we're seeing is shorter runs of stationery but of a better-quality paper and print, and of a more interesting design for businesses that need to differentiate themselves."
These types of small-run, custom orders are more lucrative for printing companies than large orders of lesser-quality, standard materials.
The 2,000-plus printing companies in L.A. County range from multinational giants such as Avery Dennison Corp. to a myriad of small, family-owned niche operators.
"You keep hearing about industry consolidation but it doesn't seem to happen much here in Los Angeles," said Gerald Bonetto, director of government affairs with the Printing Industries Association of Southern California, a trade association. "Only a handful of local companies have been sold or merged, and most of the consolidation takes place in the Midwest and on the East Coast."
According to Bonetto, the printing industry in L.A. has seen a 40 percent increase in total sales over the last five years, driven by the fast growth in direct mail, more sophisticated packaging and presentation of consumer goods, and the ever increasing number of labels and wrappers that are put on anything that is sold.
Although some market segments, such as business forms and software manuals, have seen a decline as a result of home and small-office printing, these are not considered particularly high value-added markets.
Meanwhile, more-sophisticated, mid-sized printers are diversifying their operations to better serve the burgeoning Internet industry.
"Aside from printing marketing materials, you're seeing more companies provide fulfillment services, including distribution and mailing of materials," said Bonetto. "Some are providing graphic design services to develop Web sites, and some even host Web sites for their customers."
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