AMI Strikes $550 Million Deal With RR Donnelley

American Media, Inc. [AMI] is executing an aggressive digital strategy with the help of RR Donnelley—AMI awarded the company a contract to assist with its digital convergence that extends until the year 2020 that is worth an estimated $550 million.

“I think it really speaks to the viability of publishing,” says Rob O’Neill, vice president of Manufacturing for AMI. “There’s a lot of talk that print is dead but I think when you see a contract of this magnitude—it goes out 8 years—being signed, I think it really speaks to the vitality of not only the traditional print business but the excitement and opportunities for growth in the digital space.”

For the past 25 years, RR Donnelley has supported AMI with traditional printing services and this agreement now engages them to propel digital efforts for AMI.

Additionally, RR Donnelley will be printing and binding OK! and Star magazines—AMI acquired OK! over the summer and it had previously been printed and bound by Quad Graphics. Star magazine will continue to be printed and bound by Quad Graphics until its contract expires, though O’Neill could not disclose when that will be.

“The real focus is taking all of our publications and going to the Apple Newsstand, Android and e-newsstands,” says O’Neill. We hope to have them launched within the Apple Newsstand by the end of the month. That is really the big effort, the digital assets RR Donnelley is bringing to the table is through its CustomPoint Solutions Group—they’re the group that’s going to be working on our digital convergence.”

The company decided to extend its partnership with RR Donnelley to include these services because it wanted to have “all of that work under one roof and manage it through our existing contacts and relationships,” says O’Neill.

In December 2010, David Pecker told FOLIO: that AMI was going to expand its print services efforts—this agreement with RR Donnelley furthers that initiative.

“The way this fits into our publishing services group, is now we have a broader sense of services, or a broader menu if you will, that we can provide through Donnelley,” says O’Neill. “We basically leverage the RRD relationship to bring value to our publishing partners through economies of scale and volume. That’s why this agreement works well for us because in this deal we have a broader array of services that we can provide.”

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