Managing During a Time of Upheaval

CLEARWATER BEACH, FLORIDA—The 2010 Primex Conference, which serves the print-media supply chain, began Monday in what some attendees were describing as a wave of pervasive fear in the industry.

The supply chain—which includes publishers, printers, paper companies, mailers, ad agencies and technology companies—is facing its toughest period ever, as audiences and advertisers migrate to digital media and the media industry is buckling from the effects of a deep recession. The meeting convened as two of the industry’s largest players, World Color Press and Quad Graphics, were gearing up to merge sometime this year in an acquisition of World Color by Quad.

Kicking off the event—which is sponsored by the leading association for the print-publishing manufacturing industry, IDEAlliance—was a keynote address from Paul Rossi, managing director of The Economist Group. The Economist has generally bucked the trend in print magazines, expanding its circulation dramatically in the last few years and maintaining a relatively high subscription price.

During his keynote, Rossi pointed to two overriding trends, one negative and one that holds out hope: The negative trend is the massive decline in magazine advertising over the last decade. The less troubling trend is that print magazine circulation, according to MPA and other sources, appears to have remained flat throughout the Internet revolution.

For Rossi, the biggest item on agendas now is e-readers, which he described as a “substitution” product for print magazines. “There is a real challenge here for all of us,” he said. In the case of The Economist, Rossi said, e-readers are actually bringing people to the brand. “The vast majority of people buying [Economist-related] Kindle products are either lapsed Economist readers or new customers,” he said.

Key Takeaways

Meanwhile, on day two of the conference, IdeAlliance had what amounted to a five-hour intervention session for attendees entitled, “Managing in a Time of Upheaval.” The point, association CEO David Steinhardt said, was to initiate a “reengagement, a new conversation, with the industry. There is a great deal of fear.” The brainstorming session was intended to force a new look at the dynamics of the supply chain. “The supply chain is changing, and the structure has not kept up,” he said. “We wanted to pause and reflect on what the key directions are that we want to move the supply chain.”

Steinhardt said there were five key takeaways, which the association will take back and work on, with plans to issue a report at next year’s conference:

•    The need in the market for an improved image campaign around the value of print media.
•    The need to redefine the print supply chain as the media supply chain.
•    The need to continue to drive costs and inefficiencies out of the chain.
•    Training. Downsizing has resulted in a massive amount of expertise leaving the system. This has to be corrected.
•    Development of multichannel workflows.

The session, Steinhardt said, did its job. “It was phenomenal,” he said. “We also asked this group to look at association improvement—and encourage associations to make some choices about what they do.”

One participant, Ed Sheehan, executive vice president of sales for World Color, approved of the session. “It was useful,” he said. “There is a sense of panic in the industry, but people have gotten to the point where they’re okay being candid with each other. There is also a sense of trust. This kind of got it out into the open.”

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