Quebecor World Mag Prez: ‘Creditor Protection is a Great Place to be Right Now’
Grosman at PRIMEX: Magazines need to urge readers to pay more.
ST. PETERSBERG, FLORIDA—Three weeks after his company filed for bankruptcy protection, the president of Quebecor World’s magazine print solutions business, Doron Grosman, addressed the crowd as a keynote speaker at IDEAlliance’s 2008 Print Media Executive Summit (PRIMEX), held at the Renaissance Vinoy Hotel here.
Grosman began his speech with a status report on the company. “We are in creditor protection, which is a great place to be right now. We have one billion dollars of financing. From an operations standpoint, we’re in good health,” he told the crowd of printing, paper and publishing production executives, many of whom applauded his candor and willingness to speak under the circumstances.
Grosman said the company is in its situation because it paid a high premium on several acquisitions, with a debt of $3 billion, generating annualized interest payments of $190 million.
“Maybe our situation is a wake up call for our entire industry,” he said. “If a $6 billion company can be in this situation, what are the implications?” [SEE RELATED FOLIO: Q+A HERE]
Grosman said the lesson learned is to put the value back into the value chain. One way to do this, he said, is to give printers more access to magazine staff beyond production into the sales, editorial, circulation and marketing departments. Understanding their concerns would provide printers with insight into what readers want. “At this point, it’s not necessarily focused on revenue generating but on cost cutting. A more balanced perspective would make a great difference.”
Along these lines, Grosman also suggested asking readers to pay more. “Magazines need to be repositioned as premium products,” he said. “Right now, they are a unique product with commodity margins.” Contributing to this, he said, is a lack of standardization. He suggested there be fewer options in ink types, paper weights and trim sizes—a somewhat controversial suggestion among those gathered.
One audience member asked if he meant that all magazines should be the same size, to which Grosman answered, “No, but there should be three or four. We are burdened by the complexity of all those sizes. Does it make a difference?”
Grosman also suggested more technical collaboration even as magazines compete commercially; approaching recent newsstand shifts as a chance to challenge “legacy thinking” about distribution practices; and shortening the contract negotiation process between printers and publishers to consolidate energy and time.