Printers Go All Out to Stay Alive

“If you go back a few months it was an extremely big issue. But paper has flattened out some and it's more manageable now,” Blohm says. He adds that printers probably bought more paper than usual because private equity groups were snapping up paper mills and exchange rates were fluctuating.

“Internally, we were trying to find more storage room, so there was a little bit of panic that drove people to buy more paper. But I think that's leveled off now.”

As for postage costs, Blohm believes that, despite the enactment of postal reform legislation in 2006, many catalogers are still smarting from the aftereffects of the massive 2007 hike under the former law.

Like Quebecor, Quad is going deeper into online marketing. “Over the last six to eight months I've spent a lot of time talking to catalogers — the marketers with both retail and Web channels — who ask, ‘What's an alternative to this catalog?' Blohm says.

Another possible growth area for Quad is digital printing, which until fairly recently could only be used for small runs since it costs much more than conventional offset jobs.

According to IWCO's Wicka, “The positives we see for 2009 are the opportunities where variable color and personalization eventually become an affordable, mainstream option for direct marketers. Up to this point it's been a high-cost niche, more for smaller runs and one-to-one communications.”

So what lies ahead for printers?

“I think a lot of people will struggle,” Wicka says. “2009 will be a tough year — it's gonna be the haves and have-nots.

“You'll have to be healthy enough to reinvest in your business because customers are going to require new technology to be brought online,” he adds. “If you're not, it will be a tough year because you're not going to put new technology in play for your customers. So it might be hard to keep up with the competition.”