ANALYSIS: Capacity outstripping demand in digital colour.(printing industry report)(Brief Article)

Research shows that in digital colour print, capacity is outstripping demand. Barney Cox investigates

Digital colour print, much promoted as a bottom-line booster, may be closer to bottoming out than coming up trumps, after two reports highlighted cost as a major issue in the market.

Research carried out by US firm Strategies on Demand and published in Seybold Bulletin found that capacity was outstripping demand and prices falling faster than others had predicted. Its research suggests that, between 2000 and 2005, volumes of colour will grow 17.4% per year, but prices will fall 16%. Anecdotal evidence from UK printers suggests the firm is on the right lines.

'In the past year, growth has slowed down - I reckon volume has grown 15%,' says 1st Byte managing director Lawrence Dalton. 'But profit is down. There is more competition on price.'

Over at the Color Company, this sentiment is echoed by managing director Kevin Belcher. 'Colour volumes are increasing 20% year on year, but prices are dropping,' he says. 'I've had to halve some prices this year.' But he also admits that it's still a high-margin business.

With variable data unlikely to be the killer application predicted, both firms are playing to digital print's other strength, namely extremely fast turnaround - 90% of Belcher's digital work is same-day delivery.

Strategies on Demand claims that utilisation ...