Ａｎ Ｏｖｅｒｖｉｅｗ of industry performance and new business models developed in Asia Pacific Region Japan

1. Ａｎ　Ｏｖｅｒｖｉｅｗ　of industry performance and new business models developed in Asia Pacific RegionJapan JAGAT Managing Director Ryoichi Yamauchi

2. An overview of industry performance and new business models developed in Japan １．An overview of Japanese printing industry performance From high growth and maturity to decline ２．The future of the Japanese printing industry The effects of the popularization of digital media on the printing market and the printing industry. ３．New business models developed in Japan ・ Tapping latent need by utilizing new technology ・ Value improvement within printed mater through the developing new technologies ・ Securing new revenue sources by offering ancillary services ・ New business development through cross-media development support for customers

3. An overview of Japanese printing industry performanceＦｒｏｍ　ｈｉｇｈ　ｇｒｏｗｔｈ　ａｎｄ　ｍａｔｕｒｉｔｙ　ｔｏ　decline

4. An overview of Japanese printing industry performanceThe maturation of printing demand,overcapacity through technological innovation

5. An overview of Japanese printing industry performanceThe decline in added-value in prepress

6. An overview of Japanese printing industry performanceThe extent of the effects of overcapacity and the decline in added-value of prepress

7. An overview of Japanese printing industry performanceDecline in GDP elasticity value.Common to most developed countries.

8. The future of Japanese printing industry Factors that will influence the printing industry and the printing market from now on 1.Population 　・ Japan’s population started to decline ・ More old age peoples, less young peoples 2.Economy ・The GDP growth rate is predicted to be around 2% in real terms. ・The growth rate of printing industry will be 1%. 3.The influence of digital media on the printing market ・How far is digital media likely to expand and develop? ・What does the future hold for paper-based media? →the rapid growth and dissemination of the internet and mobile devices。 →the trends regarding paper-based media that can be seen today.

9. The future of Japanese printing industrySpread of the internet and mobile devices • Increased internet/mobile device use, and improvement in functionality and services

10. The future of Japanese printing industryEffects of the growing electronic media Media diversification and changes in amount of time spent at home

11. The future of Japanese printing industryEffects of the growing electronic media・Shrinking publishing market ・Book market in a downwarddrag ・Magazines have seen 8 consecutive years of negative growth ・weekly magazinereading Increased: 13.9% Decreased: 37.7% <Reason for decreased reading> Can get most information through internet or the TV.

12. The future of Japanese printing industry・ Effects of the growing electronic media • Internet marketing has surpassed radio and is gaining on magazines

13. The future of Japanese printing industry Effects of the growing electronic media ・Internet marketing will become the 2nd largest advertising medium behind TV.

14. The future of Japanese printing industryEffects of the growing electronic media • DM continues to increase without being affected: • However, there are serious needs for cost savings • the growing use of the internet and e-mail lead to an awareness of the high cost of DM.

15. The future of Japanese printing industry Effects of the growing electronic media・Free magazine growth driven by the wave of internet expansion. １． Market scale（JAFNA estimates) ＜2003＞　　　　＜2005＞ ・No. of titles ： 11561200 ・No. of editions ： 18612245 ・No. of copies ： 　64.3billion91.0billion ・No. of fee-based magazines ：43.1billion ・Consumed paper: 600,000 tons/year 16% of newspapers (3.7 million tons) 33% of magazines (1.8 million tons) ・Estimated advertising expenses: US$ 2billion ２．Background - Consumers aware that the expansion of the internet allows them to obtain valuable information for free - “Distribution location” and “target readers” can be set freely

16. The future of Japanese printing industryProjections for the printing market • The printing market is moving from maturity to market reduction

17. The future of Japanese printing industryContraction of the printing industry

18. The future of Japanese printing industryNew business models developed in Japan <Stir up print demand > “Tapping latent need” by utilizing new technology ２．”Value improvement within printed products” through the development of new technology <Develop new business model> 1．”Securing new revenue sources” by offering ancillary services 2. “New business development” through cross-media development support for customers

19. New business models developed in Japan“Tapping latent need” Case Study: Utilizing new technology of sheet-fed Press Vanfu,Co. Inc. ・Founded as a phototypesetting business 　→expanded through service bureau ・First installed 4-color sheet-fed press 6 years ago Certified capability of printing 10 4-color short run jobs per hour ・Accept only jobs with a short run no more than 3000 copies. ・Greatest characteristic is their ability to “guarantee” quick delivery (1 day) andopen prices ・Sales went from “\0” to “US$30million” in 6 years!

20. New business models developed in Japan”Value improvement within printed matter”Case study: Connecting inline finishing to its web offset press, The Atariya Printing Corporation ・ Unique finishing added to printed matter improve the value of printed products. ・ Sheet-fed offset presses with inline finishing is increasing. ・ However, a greater variety of post-print processing can be made possible by connecting inline finishing equipment to a web offset press. ・The Atariya Printing Corporation: Typical commercial printer with an annual turnover \7billion(US$64million) succeeded in developing technology that allow highly unique finishing work to be performed at a low cost and short turnaround. ・　Developing unique technologies enable the company to get rid of price war.

21. 印　　刷 ダイカット Printing スリッター Die cutting 丁　　合 ミ シ ン パターン グルー Perforation ライングルー Glue binding 折　　り 小口スリット Holding ロータリー カッター Srit,Cut

22. Example of inline finishing 【zigzag folding】 SAMPLE SAMPLE Short turnaround！

23. 【glue binding】 Example of inline finishing SAMPLE SAMPLE From wire-stitching to glue binding To meet a demand for environment friendly printed mater No wire！

24. Example of inline finishing 【glue binding + index folding】 SAMPLE SAMPLE SAMPLE

25. Example of inline finishing 【Pressure sensitive insert】 SAMPLE SAMPLE Ｂ４ size insert Can be unfolded to Ｂ３ size (Ｂ４size I insert fee is applied ] SAMPLE Carry more information！

26. Example of inline finishing 【Pressure sensitive finishing+Die cutting】 SAMPLE SAMPLE SAMPLE Strong impact！ Die cutting SAMPLE

27. Example of inline finishing 【Pressure sensitive finishing+ perforating】 SAMPLE SAMPLE perforating Higher response rate！ SAMPLE

28. New business models developed in Japan“Secure new revenue sources” • Case Study: Ancillary services Toppan Forms Co. Ltd.

29. New business models developed in Japan“Secure new revenue sources” Ancillary services

30. New business models now being developed in JapanOverview of the background of cross-media <Thus far> ・Media has diversified and time spent for paper media has decreased But, one cannot necessarily say that the expansion of the internet/mobile devices → shrinking paper media market <Future projections> ・ Will changes seen with further advances in digital technology be the sameas current changes? ・ex.Evolution of mobile device 　１９８５：Phones(Analog) →１９９３：Phone(Digital) →１９９７：e-mail →２０００： digital cameras →２００６： E-money＋digital TV broadcast →２０？？： robot secretary? ・It is difficult to make accurate projections about the future of media. However, some things do provide clues.

31. The background of cross-mediaIndications seen in mail-order sales • Internet expanded the mail-order market

32. The background of cross-mediaImplication seen in mail-order market． • Customer needs and purchasing patterns

33. The background of cross-mediaInformation needs and media characteristics 1. Basic human information needs (1) Acceptability of information the individual emotional insecurity that comes from not knowing what everyone else knows. (2) Passivity in taking in information A passive stance in which the individual like to choose what is necessary from the information provided (3) Need for immediate news Wants reliable information as soon as possible when a disaster occurs 2. Media characteristics ・Push media fulfills basic needs ・Pull media is better for responding to the opposing needs in (1) and (2) above

34. New business models now being developed in JapanNew business development through cross-media １．Cross-media for the printing industry ・Push media will continue to exist as an important form of media. 　・“Cross media marketing”、” cross media publishing” become commonplace soon. ２ Key to success ・Technical capability is not enough 　・Securing and developing personnel is vital 　・Standardization is a must ３．JAGAT contributions ・Created necessary personnel development curriculum 　・Initiated certification program to establish goals

35. New business models now being developed in JapanNew business development through cross-media • Role players involved with cross media Fig 21

36. New business models now being developed in JapanSecuring and developing personnel is vital