With last week's announcement that five magazine and newspaper publishing giants—Time Inc., Condé Nast, the Hearst Corporation, Meredith and the News Corporation—have joined forces to build an industry-standard platform to present their work on the Web, phones and e-readers in a richer, more flexible and more lucrative form than is possible today, consortia were thrust into the spotlight.
Publishing consultant Dedra Smith took time last week to talk everything consortium, from evaluating the pros and cons of joining one to deciding which is the right one for your business—and even which steps publishers must take internally for consortia to work. (Editor's note: To hear more of Smith's thoughts on buying consortia, register for the Publishing Business Conference & Expo, where she'll lead a session on this ever-evolving topic.)
INBOX: What benefits can publishers gain from being in a buying consortium?
DEDRA SMITH: Theoretically, there are two ways to benefit by cooperative buying. The first is by amortizing the costs of certain services, such as production management, ad trafficking, IT, Web development and circulation management over more than one title, reducing the redundancy costs of personnel, office space and equipment―assuming that schedules can be offset so that work flows all month. The second is by increasing the volume of business that you can take to various vendors―e.g., prepress, printing, circulation management, paper purchasing, etc.―you should see the power of that consolidation reflected in pricing.
The value of this type of consolidation can depend on such considerations as whether the specifications of each job are similar, whether schedules are streamlined or even final delivery destinations. Prepress houses, printers and paper merchants are already consortia of sorts in that they consolidate the needs of many clients into an efficient workflow for their own enterprises. A publishers' consortium is really trying to group volume, workflow and/or payment in a way that's of enough value to the vendor to get a percentage of savings in exchange for their efforts.
Paper, because it's such a large percentage of any publisher's purchase, is the first target for a consortium. In many cases, it's trying to replace the function of a merchant and take the merchant's percentage of the paper commission. However, the merchant not only acts as a consolidator by bringing various publishers together and then creating volume purchases based on their needs, but also as a lender, since merchants take some of the credit risk off the mills by extending credit to the publishers and creating their own terms.
Publishing consultant Dedra Smith took time last week to talk everything consortium, from evaluating the pros and cons of joining one to deciding which is the right one for your business—and even which steps publishers must take internally for consortia to work. (Editor's note: To hear more of Smith's thoughts on buying consortia, register for the Publishing Business Conference & Expo, where she'll lead a session on this ever-evolving topic.)
INBOX: What benefits can publishers gain from being in a buying consortium?
DEDRA SMITH: Theoretically, there are two ways to benefit by cooperative buying. The first is by amortizing the costs of certain services, such as production management, ad trafficking, IT, Web development and circulation management over more than one title, reducing the redundancy costs of personnel, office space and equipment―assuming that schedules can be offset so that work flows all month. The second is by increasing the volume of business that you can take to various vendors―e.g., prepress, printing, circulation management, paper purchasing, etc.―you should see the power of that consolidation reflected in pricing.
The value of this type of consolidation can depend on such considerations as whether the specifications of each job are similar, whether schedules are streamlined or even final delivery destinations. Prepress houses, printers and paper merchants are already consortia of sorts in that they consolidate the needs of many clients into an efficient workflow for their own enterprises. A publishers' consortium is really trying to group volume, workflow and/or payment in a way that's of enough value to the vendor to get a percentage of savings in exchange for their efforts.
Paper, because it's such a large percentage of any publisher's purchase, is the first target for a consortium. In many cases, it's trying to replace the function of a merchant and take the merchant's percentage of the paper commission. However, the merchant not only acts as a consolidator by bringing various publishers together and then creating volume purchases based on their needs, but also as a lender, since merchants take some of the credit risk off the mills by extending credit to the publishers and creating their own terms.
Companies Mentioned:
 |
The Integrated Media Cooperative can help address most of you issues. We would be happy to discuss with you and your audience about how IMC is help it's members and ABM members save money.