Still Fit to Print
It's been a tough year for printers, and Publishing Executive's annual "Top Magazine Printers" list (at right, or download it here) is a stark indicator of how the recession has hurt the bottom line for companies regardless of size, region or market served. Only five of the 23 printers on this year's list report an increase in magazine printing revenue compared to last year (although that information was not available for six printers listed). Looking at total printing revenue from all sources (periodicals, catalogs, book manufacturing, newspapers, etc.), just three printers reported higher revenues this year compared to last (one was flat, and for three companies, no comparison information was available).
The dawn of a hoped-for post-recession era promises much ado about mobile apps and Twitter—but also predicted growth in print advertising. With Apple's iPad poised to bring the promise of truly integrated, multichannel publishing closer to reality, printers are ramping up efforts to offer multimedia packages to customers while keeping an eye on staying competitive in print. Alongside the uncertainties surrounding the impact of new e-readers, printers must still contend with the reality of increasing mailing costs and unstable ad revenues, two challenges which successful printers hope to meet in ways that continue to make them indispensable to publishers.
Perhaps the best summation of the position in which the industry finds itself can be found in Quad/Graphics' "print industry trends" statement for a March 5 U.S. Securities and Exchange Commission filing: "… the emergence of alternative marketing technologies, such as online distribution and hosting of content and mobile technologies, on both a stand-alone basis and in conjunction with other marketing channels, has resulted in … traditional users of print and related services allocating their marketing and advertising spending across a wide and expanding selection of non-print electronic media options," the statement reads. "Quad/Graphics believes that advertisers and other traditional users of print find that they receive the greatest return on their marketing dollars when they effectively utilize data to target the appropriate customers and combine digital alternatives with customized print products in a targeted, multi-channel marketing campaign."
What does this new approach require? Investment in new technology, more efficient print and mailing operations, and strategic thinking that integrates quick responses to the evolving needs of publishers. For more specifics on these and other issues, Publishing Executive sought the input of several industry executives from companies that made the "Top Magazine Printers" list, which ranks U.S. and Canadian printers by total revenue from magazine printing.
- Mark Angstrom, print sales director, Angstrom Graphics Inc.
- Michael Simon, executive vice president, Publishers Press
- Bruce Jensen, group vice president of sales, Transcontinental Printing
- Ed Sheehan, executive vice president of sales, Worldcolor
What are the most important changes you've observed in the industry during the past year? What do they mean for printers?
Angstrom: Industry consolidation continues, creating opportunity. Productive organizations will leverage the opportunity to their advantage, many will not.
Simon: Clearly the most significant occurrence in not only this year, but in the past 100 years is precipitous decline in demand for print. No other factor has had or ever will have the same impact as the combination of the recession and market confusion over digital vs. print—the confusion of marketers over where to spend their hard-earned dollars. This has been most significant to us.
Jensen: The decline in print-ad spends driven by the economy and some fundamental changes in the media marketplace helped drive more innovative solutions in print advertising. Increasingly, the focus is on finding ways to improve measurability and performance for advertisers. At Transcontinental, we continued to advance personalization by combining offset and digital technologies to produce advertising components that were highly customized and measurable. We also developed a program for small to mid-size publishers that leverages our … proprietary content management system technology to essentially "deconstruct" print content and re-build it in a flexible, Web-friendly format that can be displayed and repurposed across a broad spectrum of online channels. It's all part of helping publishers move to new multichannel business models.
Sheehan: There's no question that "innovation" is on everyone's mind. Finding ways to make magazines more timely and interactive for both readers and advertisers is driving a wealth of opportunities for printers. We have created significant value for our customers through special high-impact units, schedule compression, format changes, distribution and mailing innovation and more.
How do you think the printing industry in general has weathered the recession? Do you see signs of improvement in the business climate?
Angstrom: There are fewer printing companies than last year, and our industry forecast is for fewer printing companies yet again. That said, our economy is cyclical and supports our continued drive to produce and achieve better results. Print remains an effective communication vehicle. We see improvement going forward for productive and efficient printing companies, who leverage opportunity to their advantage.
Simon: I'm not 100-percent confident that the bottom has been felt yet. There has not been enough history in a few short months to say that we are in recovery. When you look at a 30-percent decline, a 3-percent uptake does not have a significant meaning. Clearly we are not 90 days into a recovery—this is not what a recovery looks like. It's brutal. It's not just a matter of declining revenues. It's a matter of people, jobs, livelihoods, families—a whole standard of living. This [recession] could last several years, but we are prepared to manage through the long haul if necessary.
Jensen: The recession took a toll on printers at every level. All you need to do is look at the continued [industry] consolidation. The stronger players took prudent steps to save costs through rationalization measures while at the same time diversifying to accommodate a changing marketplace. Still, I think both publishers and printers remain confident in the power of print magazines to effectively reach targeted audiences and deliver real value to both readers and advertisers.
There are signs that the market likely hit bottom and is beginning a slow recovery. We don't anticipate 2010 to be a robust year, but we do expect forward progress. I think the pressing question is how far the industry is able to recover over the next year or two, and how many changes are permanent, versus short-term reactions to a crisis. We remain upbeat about the future.
Sheehan: It is more than the recession that has affected the printing industry—we are in the midst of a major business model shift that will permanently change the way we go to market. Therefore, we look for opportunity rather than improvement, and have capitalized on it with investments; for example, in new co-mail capacity to mail thin books, and in color innovations such as G7 and image enhancement to save resources and produce an improved product on less-expensive paper.
What was big for your company during the past year? Any new directions, acquisitions or upgrades?
Angstrom: We have installed new presses and new binding lines to support productivity and improved product. We are ISO 9001:2008 certified and, as such, review our operations continually for improvement.
Simon: We are charging headlong into creation of capable, comprehensive, scalable, world-class solutions for content creation and archiving. We see ourselves as content providers to our clients on the digital front just as on the mechanical front, with a goal to deliver a broad-based resource to provide the marketing advantage of print and digital combined. Print and digital work very well together, and we are going to use them in distinct ways to do what customers want to do—deliver a message.
We have entered into a number of strategic partnerships in the last year. We've partnered with Mark Logic and Atex Polopoly on the content management side [for content repository and Web CMS/text mining]. We've formed a relationship with Omniture for e-mail marketing.
Jensen: Transcontinental continued to advance its sustainability initiative and published the company's first sustainability report of 2009 earlier this year. Our intention is to actively commit to sustainable development by integrating social, financial and environmental considerations into our day-to-day business operations and long-range planning. We refuse to let economic conditions alter our sustainability objectives.
We also rolled out our new Marketing Communications Sector and further strengthened those services by acquiring Redwood Custom Communications (which evolved into Totem, a leading custom-media agency) and Conversys, a proven leader in helping companies optimize their digital promotions, increase their revenues and create a valuable, loyal customer base.
Our printing of the San Francisco Chronicle started successfully in July, and we were also awarded two new six-year contracts with Rogers Communications.
Our future development is always grounded in the same approach—listening to customers. Based on those dialogues, we expect to continue expanding services in multiple channels that meet the needs of our publishing clients. That's why Transcontinental added digital communication platforms and one-to-one advertising to our product and service offerings in recent years. For us, this is a natural evolution that synchronizes effectively with our ongoing mission to enable publishers to assist their advertisers in identifying, reaching and maintaining their target consumers.
Where do you see things going as you move forward in 2010 and beyond?
Angstrom: Change will continue. Technology will continue to improve. Competition fuels improvement. Achieving results for customers will always provide a market to serve.
Simon: We are making sure our clients have the latest in technology on all fronts, on the press side and the digital side as well. We continue to make investments in the business—world-class equipment and expert staff.
Jensen: Although multichannel publishing is here to stay and Transcontinental will continue to invest, we think there is also a growing recognition of print's important role in any multichannel approach. A positive sign is "Magazines: The Power of Print," which is an industry-sponsored campaign to remind advertisers that the print magazine medium is still very much alive and performing well.
Sheehan: Our key area of growth is in our customer-facing technology solutions, from ad and image portals, automated composition, e-reader technology and XML publishing. We have a very high degree of interest from publishers across the spectrum in these tools. The challenge for all of us in both the print supply chain and the customer base is keeping up with the end user. The consumer is king.