The most remarkable finding in the segment-by-segment status described in the fiscal 2002 mid-term financial statements of the listed printing firms is that all but the electronics sector, which showed year-on-year growth in sales, declined from levels one year earlier. Commercial printing experienced a significant fall of 7.9% from the previous year and publication printing a decline of 4.0%.
Another distinctive point is polarization in profitability. In sharp contrast to large companies, whose profitability is diminishing year after year, medium-sized firms with unique features have successfully achieved a high-level profit performance.

The operating earning rate of the leading three firms, which stood at levels of 5-7% until the mid-1990s, has been reducing each year since 1998. The rates of Kyodo Printing and Dai Nippon Printing sank to as low as 1.1% and 2.2%, respectively at interim closing for fiscal 2002. This reduction in profitability occurred in inverse proportion to the climb in the cost to sales ratio, closely reflecting lowering printing prices.

Meanwhile, TOKYO Lithmatic, Kosaido, Nissha Printing, Sunmesse, and Tosho Printing　reported higher earnings and profits in their mid-term financial statements for fiscal 2002. Among these five, all but Tosho Printing achieved a high operating income margin of over 6%. Other companies that have a high operating profit on sales are Asia Securities Printing (19.2%), Takara Printing (17.9%), Hiraga (7.9%), Toppan Forms (7.6%), and Fukushima Printing (6.9%).

Asia Securities Printing and Takara Printing are companies that offer specialized solutions in knowledge-intensive fields to serve customers with disclosure needs. Toppan Forms and Fukushima Printing, specializing in form printing, are vigorous in the outsourcing business through the use of digital technology and in developing their original products. TOKYO Lithmatic has expanded business by carving out a niche with its strengths in digital data handling and short-run printing to serve professionals in neighboring industries. Nissha Printing has avoided competition with major companies and drastically shifted its market from commercial and book printing to industrial materials and electronics with a view toward overseas markets.

Financial statements, declared income data, and other performance statistics collected by the industry trade groups over the past few years show overall sluggishness in the industry, while a closer view reveals that medium-sized firms, like those described above, are making a good showing.

The Research Institute for Publications reported that in 2002 the value of shipments of publications totaled 2,310.5 billion yen, down 0.6% from the previous year. This marked the sixth negative growth year in a row. By segment, books experienced the first year-on-year increase in six years, 0.4%, with a value of 949 billion yen, while magazines posted a 1.3% decline over the year with 1,361.5 billion yen. The total sales volume of all publications reduced 2.0% from a year ago to 39,560.4 billion copies. The gap between the year-on-year changes in value terms and volume terms is attributed to some relatively expensive million sellers such as the Harry Potter books.

The Harry Potter books were the major driving force behind the rebound in the book sector to positive growth. The series sold a total of nearly 16 million copies, generating an income of 36 billion yen.

According to the survey conducted by Dentsu Inc. titled '2002 Advertising Expenditures in Japan,' the spending for advertising in Japan in 2002 totaled 5,703.2 billion yen, down 5.9% from the previous year.

The most noticeable finding in the 2002 advertisement market is that newspapers and radio, as advertisement media, took another step toward decline. Newspaper advertisement expenditure reduced to 1,070.7 billion yen, showing the largest ever drop of 11.0% from the level a year ago. The fall, which was also the largest among the advertisement media in 2002, resulted in a reduced proportion held by newspapers in the entire advertisement expenditures, from 19.9% to 18.8%, down 1.1 percentage points.
Declined advertisements from industries such as automobile and associated parts, real estate and housing equipment, and publishing mainly contributed to the fall. These industries are usually less likely to reduce advertisements in newspapers because of the newspapers' high reliability and reader demographics being well-linked with the target consumer groups.
In addition, the information and communications sector and the finance and insurance sector, both of which underwent major shifts in 2000 and 2001 that had contributed to significant expansion of the advertisement market, cut back on spending in newspaper advertisements rather than TV advertisements. Compared to the 1990's value of 1,359.2 billion yen, which accounted for 24.4% of the total expenditures, the newspaper advertisement sector declined 21.2% in value terms and 5.6 percentage points in share, in part impacted by the economy. This clearly suggests that the newspapers are on the decline as an advertisement medium.

Radio advertisements, just like newspapers, have been decreasing since 1991 in both value and share, although there is no specific negative factor. This trend was more obvious in 2002.

Free papers are defined as 'a newspaper-like medium that is delivered for free to specific homes or the homes and offices in a specific region, and are provided in the form of periodical information publications in tabloid or blanket format mainly containing local information that is useful in the everyday lives of the primary target of women and families.' As of autumn 2001, there are 1,182 papers issued by 1,061 publishers for a total circulation of 220 million. They have been distributed to distinctive targets, such as housewives, who often make purchasing decisions, and female office workers, who usually have a high disposable income, and have proven effective. Recently, free papers have more often been seen at train stations for free distribution.

For consumers, free papers are a medium very similar to flyers in terms of the type of product information contained and thus, may become a contender to flyers in the future.

'POPs' (point-of-purchase displays) was the only sector that experienced a year-on-year increase in advertisement expenditure in 2002. SP advertisement sectors such as 'Transit advertisement,' 'Telephone directories,' and 'Exhibitions/Screen displays' indicated a decline from the levels a year ago, although there was no sign that their regular positions were about to change. 'Outdoor advertisement,' however, showed a downward trend.

Newly-emerged digital advertisement media continued to grow as a whole in 2002. The combined total of advertisement expenditures for satellite media-related and for the Internet (including mobile phones) reached 127 billion yen, up 5.3% from the previous year. Among the satellite media, CATV posted a remarkable growth (up 18.1%) in expenditure, thanks to an increased number of subscribers acquired through a robust demand for broadband services.

Internet advertisements, which were reported to be experiencing a temporary slowdown, showed a steady growth in 2002, too. This was the result of a rise in advertising through the Internet for mobile phone users by domestic clients who, for example, intended to expand their reach through large-scale promotional campaigns. These advertisers have been encouraged by the fact that the Internet user population, including users of Internet-enabled mobile phones, topped 50 million combined with the widespread availability of broadband communications, enabling them to appeal to potential customers with more impressive advertisements. 'Mobile' capability has opened new possibilities in Internet advertisement.