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Working With Your Printer



By Matt Kinsman
05/24/2006

Printers and magazine publishers are trapped together in a vicious
circle of downsizing and price-cutting. Magazines, hammered in recent
years by declining revenues, downsizing and advertisers pushing them on
price, are pushing printers in a similar manner on price. Talk to just
about any printer, and they'll say that in publishers' eyes, service
takes a back seat to price every time. "The biggest challenge is the
value our prospects place on service," says Dan Weber, vice president
of sales at Publishers Press, which handles 350 clients, from Cygnus
Business Media to single-title publishers. "Since 2000, it's been
bottom-dollar driven more than ever before. The effort and resources we
put forth for services;having a good customer service rep, having
multiple services available;used to mean something. If you were the
better printer but your prices were three to five percent higher than
the competition, you could still sell to publishers. Now it's come down
to where almost everybody is dollar-driven. It's more and more
difficult to separate yourself for service and get paid for that
service."

On the publisher side, new technologies are decreasing turnaround times
and increasing selling times, but also requiring more and more of the
front-end responsibilities that used to be the domain of the printer to
be handled by the publisher. New technologies are increasing speed and
accuracy but tech developments are actually moving faster than the time
it takes publishers and printers to adjust their relationship. Today
there are more errors due to communication breakdowns than from
technical mistakes.

Five years ago, almost every publisher used a print media trade shop to
do a significant percentage of print-ready file production. Now
publishers have taken that upon themselves, driven by reductions in
time cycles and costs and the rise of PDF as file format for print
ready files. "A lot of magazine publishers looked at that and took it
in-house to work with printers," says Nicky Milner, vice president of
the pre-media group at Transcontinental Inc. "The challenge is there
are very specific technical characteristics that have to do with it. If
there are areas in production the publisher is not so concerned in
taking responsibility for, the printer is not interested in taking
liability for it either. That's what led to a lot of this tension. The
question is who does what, and who pays for what. That's at the root of
a lot of what we're seeing in the industry."

Milner sees responsibilities and concerns varying widely by customer
size and by the different emphasis consumer and b-to-b publishers put
on their magazines. "With consumer publications very driven by quality
of advertising and quality of production content, they've established
pre-media centers in-house or they're continuing to use a third party
that may be connected to the printer," she adds. "From a technical
production perspective, it's very clear that a pre-media production
entity is taking full responsibility. Where we see that breaking down a
little bit is with smaller publications who don't have enough volume to
justify building a department in-house or having leverage to get the
best possible pricing or time parameters from their printer. Or they
may be using smaller, independent printers who might not have those
pre-media capabilities. I think we're still seeing who is responsible
going back and forth quite a bit."

New technologies such as soft proofing and PDF workflows are making the
workflow cheaper for publishers but adding another new expense for
printers. "Publishers are taking on more responsibilities but printers
have to make significant investment in new equipment to allow that,"
says Paul Grieco, vice president, sales and marketing, at American
Press. "The technology is not so universal at press side that you have
screens available at every press allowing the printer to see on screen
what's being produced on press. It will occur, it's just a matter of
time."

But with self-calibrating monitors costing as much as $10,000 each,
expense is hampering that push to the next level of workflow among
small and mid-sized printers. "Unless you have this next to every
press, it's not viable," says Grieco. "You can't have a central control
room and have pressmen running back and forth between presses. How many
monitors do you need at press? To work really viably, a lot. You have
to have as many pages showing on screen as you do printing on press.
It's a costly proposition for the printer."

Online Hangs Over the Debate

Some publishers would like to see printers make more of an internal
investment. "I'd like to see more preventative maintenance on
equipment," says Mary Dong, director of production and distribution at The Economist.
"With our growing print order, our dispatch schedules are becoming more
demanding and any downtime creates delays. It's a Catch-22: When things
are really booming at the printer because print orders are up or
pagination is up, it's more difficult to get the preventative
maintenance."

Hanging over both publishers and printers is an increasing focus on
online rather than print. "At the last industry meeting I was at they
said if you don't get to 30 percent of revenue from online, you're not
doing your job," says Weber. "That's affecting us. Until printers look
at inefficient equipment or inefficient plants and shut them down, we
may not get to stabilize."

Pricing, Opportunities Unclear

While publishers readily admit to focusing on price, they also say
printers are being too obtuse when it actually comes to justifying
costs. "As we look to create publications as effectively as we can,
unusual ad units are creating greater production costs sometimes
without the communication to understand how to price those units," says
Tony D'Avino, vice president and general manager of the industrial and
specialty group at Questex.

"Our challenge is to have a more proactive dialog so the printer can
work with us on profitable pricing rather than the way we've done it in
the past. I am interested in a more proactive relationship where
printers schedule quarterly meetings with our publishers to discuss
best practice opportunities," he adds.

"Our biggest challenge is trying to stay ahead of the curve dollar-wise
on when those price increases are coming," says Jon Segal, founder of SchoolSports,
which works with Fry Communications and prints 25 different versions of
each issue for different regional markets. "When they come, it's not
something you can negotiate away. The price is the price. I'd love to
see more transparency in pricing. It's still at a point where we don't
understand all the inner-workings of how a printer arrives at a price.
If there was a way for them to give us a soup-to-nuts understanding of
how they get those prices, it could even help us create a more
efficient model so we could achieve cost reduction."

Dwell recently renewed its
printing contract with Quebecor World. "The relationship was fine but
through re-bidding we learned more about pricing," says Fran Fox,
senior director of production and manufacturing. "Quebecor came in with
phenomenal pricing and gave us a deal for pre-press that was an upgrade
to what we were doing but less expensive and improved our schedule." In
2005, Fox was able to cut production costs by 20 percent in six months.

Coming up with cost-saving tips is a challenge facing all printers. One
Publishers Press client had a medical magazine with multiple versions
with many tip-ins, which were driving up costs. "We worked out a way to
selectively bind that publication," says Weber. "It's not a unique
approach but this was a tabloid on thin paper and their current printer
wasn't able to make it work. We took a difficult product and
selectively bound it and that will save them thousands of dollars in
postage."

At American Press, print runs range from 30,000 to 2.5 million, with
the sweet spot between 50,000 and 250,000. While Grieco says existing
relationships with publishers are stellar, prospective clients are a
challenge. "If you're not the low guy on price, it's difficult to win
the work," he adds. "We don't believe in loss leader products. We
provide the customer service and we want to be paid for it."

Toward the end of last year, American Press walked away from two very
significant pieces of business that were priced well below where the
market should have been, according to Grieco. "We drew the line," he
says. "It was just much too much of a discount. Even though it left a
hole, we feel we'll be able to fill that hole with work that's
profitable."

To arrive at pricing, American Press keeps one eye on costs and one eye
on the market. "All printers over time see other printers' pricing;they
may deny it but they do," says Grieco. "The tendency is to make money
on press and everything else is almost a break-even. That's where the
market has driven it. We need to charge a lot more for our bindery but
we can't;the market won't allow us. There are enough publishers out
there who will line item you."

Working Through It

Many publishers are having to develop almost custom solutions to working with their printers. The Economist
is printed in five countries and distributed in more than 200
countries. The magazine works with two printers;Quebecor in California
and Perry Judd's in Virginia;in the U.S. alone, and is looking to add a
third within the next year. That's prompted the magazine to have its
own production representatives work from the printers' plants. "We've
got a growing print order;our circulation over last year alone is up
nearly 15 percent," says Connie Baker, The Economist's
production manager at the Perry Judd's plant. "It's a good problem to
have but it consistently puts more pressure on your weekly production.
Sometimes we completely destroy what we've printed and start all over
again."

To keep track of the hectic pace, The Economist
has scheduled weekly debriefings with its printers after each
production run is complete. "We have one on Thursday, another on
Friday," says Dong. "We go through everything that happened in quality
and production and we go on to next week's issue and we touch on
special projects. We'll all agree that these weekly meetings have been
great to improve communication. That resolves issues on a timely
basis."

Publishers Press creates a report card for one client that takes them
through everything from corrections to pressroom to bindings to
mailing. "This magazine has to be at the reader's home within two days
of the projected mail time," says Weber. "If it doesn't get there, the
president wants to know why."

Quebecor recently did a major paper test for Dwell.
"We were getting a brighter sheet, but in some ways not as high
quality, says Fox. "We were getting a #2 brightness but it was
considered a #4 stock. They went overboard doing tests and sample runs
and coming up with pre-press test and post-press."

For publishers considering jumping from one printer to the next,
consider Cygnus, which has worked with Publishers Press for more than
20 years. "We're the biggest client for Pub Press," says Tom Martin,
vice president of manufacturing. "I'm one-on-one with [owner] Michael
Simon. The working relationship is excellent but it's a business. In
any business there's a lot of give and take. We've built systems
together."

Cygnus publishes more than 60 magazines, with 45,000-50,000 pages and
1.3 million copies every month, and the percentage of misses is not
high, according to Martin. "It's gotten so much better and the overall
printing business technology has a lot to do with it," he says. "The
exasperations a lot of production people went through ten, even five
years ago aren't there anymore if you're working with a good printer
that knows its business."

That working relationship is critical as Cygnus (and the rest of the
industry) faces a proposed 11.4 percent postal rate hike that could
cost the company another $700,000 to $750,000 in annual postal costs.
"We started co-mailing this year and we've been co-palleting with
Publishers Press," says Martin. "We're only co-mailing about 200,000 to
250,000 copies a month but we need to move that up to about 700,000 to
800,000 by early next year. That will be 60 percent of our overall
monthly pieces." That could offset the $700,000 to $750,000 increase by
about 40 percent, or about $300,000. "That leaves us with a $400,000
increase still to offset," says Martin. "We could look at runs and
printed copies and everything else we've been looking at for the last
10 or 15 years. I don't know that you could do too much more."

By Matt Kinsman
05/24/2006







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