With the iPad proving it’s no silver bullet to fix mobile revenues, Peter Coleman argues that current and emerging print technologies can also deliver unrealised opportunities to newspaper publishers
While publishers’ attention is distracted by Apple’s iPad and other tablets, print technology continues to develop and creates new opportunities.
Both have a role: print still presents a unique proposition, and is likely to live on after the excitement of the tablet revolution has died down. The iPad isn’t going to be the ‘silver bullet’ many hoped for, and while tablet publishing may become a norm, the much-lower entry cost means newspaper publishers cannot expect to have it to themselves.
And while you can’t accuse newspapers in the Asia-Pacific of being slow to invest in print, time has passed since the global financial crisis mostly put investment in ‘heavy metal’ on hold, and the proposition has changed.
Today’s press systems include a much higher component of software and digitally-driven automation, and deliver levels of productivity largely not thought of a decade ago. And long-emerging ‘new’ technologies such as inkjet printing are finally reaching a tipping point.
A chart in last year’s OECD report on news and the internet emphasised the stark difference between papers in the UK and USA, and those in Australia: Estimates put the shrinkage in the US newspaper publishing market in the previous two years at 30 per cent – and UK, 21 per cent – while in Australia it was only two per cent. Because only Japan and Korea are OECD members – and literacy continues to grow in many markets – there’s no scope to make generalisations about South East Asia from this, but specific points are relevant.
Notably, US publishers have failed to reinvest in their products, taking out above-average instead of spending on resources such as colour plant. There, the business has been going bad for longer, and rationalisation – which you could argue is well overdue – is taking place. Major publishing companies have fallen in value dramatically, and some have gone into bankruptcy.
But are any lessons being learned?
Many US dailies are sadly short of process colour in news sections (hey guys, time to take off your black-and-white blinkers), and preprints and supplements are often little better.
Take the back-from-the-brink ‘Philadelphia Daily News’ for example. Out of interest, I subscribed to the facsimile digital edition, issued via NewspaperDirect, a few days back and wonder how long it’ll be before the next crisis comes along. The covers are bright and attractive, but inside it’s grey, grey, grey! This cons casual readers and does little to encourage advertisers, certainly not quality ones.
For less dire cases, colour remains part of the content mix, and we accept it’s not readily upgraded without upfront investment. Arguably, investment in colour – progressively being remedied by major publishers – is one reason why New Zealand’s newspaper market has shrunk so much faster than Australia’s, for instance.
Contract print plants and shared facilities are certainly a solution to this, but many publishers will need more than intestinal fortitude to persuade contract printers there’s a ROI on the deal. It’s this basic: Someone has to pay for the kit, and service the loans.
Australia has seen the chastening example of PBL’s inhouse print ambitions scuttled for lack of finance… and they control the work!
While the economy shows signs of improvement since, the attention being given to online and mobile publishing is another reason why plant upgrades are on the backburner.
In Australia, plant sharing is apparently back on the agenda following the appointment of Grey Hywood as chief executive of Fairfax Media. Or is it?
In Sydney, the company has a problem with ageing and relatively inflexible presses which have so far frustrated ambitions (however misguided) to reduce broadsheet product widths. News, by contrast, has recently upgraded, cleverly installing just the amount of capacity it needs (and sending a ‘spare’ press from the order to Townsville).
Total weekday circulations of Fairfax’s metros in Melbourne and Sydney are about 40 and 60 per cent, respectively, of their News competitors (ABC, Oct-Dec 2010) although the weekend situation – which typically requires more preprint – is more even.
Adelaide, Brisbane and Perth are effectively ‘one publisher’ towns through the week, although News sells almost as many of its ‘Sunday Times’ as the ‘West Australian’ does of its recently revamped Saturday (‘Weekend’) edition.
So what could the two share? Could WAN print News’ West Australian titles?
And what of east coast sites? Fairfax often appears to cower against News’ well-organised competition, and contracting its printing to this rival would do nothing to restore the balance of power. Maybe another contract option could arise?
Recent criticism of the ‘cost’ of printed newspapers by comparison with online and mobile publishing suggests companies such as Fairfax need to communicate with their shareholders better: Having convinced stockholders that the initial investment in digital was worthwhile (thank you David Kirk, and even Fred Hilmer), it now needs to disabuse them of the idea that the content on which its online sites have been built comes for free.
Too much emphasis seems to be placed on the cost of producing and distributing printed newspapers (that tactile newsprint ‘feel’ costs money, guys, and is actually worth something) but that’s not to say there aren’t savings to be made. Hopefully the special-purpose showcase buildings at Chullora and Tullamarine have been written back in the books… but what about the plant? You could further upgrade the double-width Colorman lines at Chullora, but a better return might come from whipping them out and installing much more compact and automated triple-wide capacity with dramatically reduced staffing and of course, paper savings. Perhaps the old presses could be refurbished for one of Fairfax’s needy NZ sites.
In Melbourne, with a smaller metro print requirement, Fairfax is bleeding because it let a competitor – established by a former staff member – walk off with millions-worth of advertising revenue. Again. (Yes, it happened once before when the ‘Melbourne Weekly’ exploited a colour production opportunity in the late 1980s.)
Without getting into why (s*)it happens (guys, what’s wrong with your staff and client relationships?) it’s time to address the current position. An option appears to be to buy the new competitor (again), but perhaps Fairfax should work to ensure it can compete more effectively than this or any potential rival.
That could mean inhouse production to meet the real estate industry’s appetite for glossy printing. More plant, perhaps, but it’s interesting that Fairfax chose to install new heatset capacity in WA – where it has a lively contract printing business – instead of Melbourne or Sydney.
Four years after the Rural Press merger, Fairfax should have extricated itself from the baggage of pre-existing magazine printing arrangements, and it’s clear that the future will call for more, rather than less glossy and high-quality print.
The former Rural Press – whose Mandurah plant is currently getting the heatset and extra coldset capacity – also demonstrated that there are profits to be made from well-chosen contract capacity.
Perhaps Melbourne also needs to take advantage of modern automation and productivity technologies.
And there’s digital printing, including the option of on-press digital imprinting: I well recall asking one of Fairfax’s Melbourne managers why the Tullamarine plant didn’t have facilities for microzoning… only to be told that “we’re not that sort of newspaper”.
Now the risk looms of being no sort of newspaper at all, it might be time to review that attitude. Fairfax owns suburban titles in the sprawling capital, but since it has News as a major competitor in this market as well, it might be worth looking at ways to make ‘The Age’ more attractive to potential (and former) readers.
Automation of conventional presses is one way of addressing this; digital newspaper printing is another, although the business models are fundamentally different.
At last year’s PANPA forum, a duo of speakers from digital press maker Dainippon Screen presented a number of hypothetical scenarios for metro publishers, and however imperfect, there’s food for thought. Screen’s Andy McCourt and Peter Scott postulated:
• a 40-page national business daily with a 60,000 daily circulation printed at ten sites in a four-hour production window; and
• a hyper-local daily advertising paper for a city such as Sydney, with community and citizen-journalist engagement; the 60,000 print run would be shared across eight presses. “This could potentially bring back lost classified advertising,” McCourt says. The presses could also be used to produce international titles, contents bills, ‘transpromo’ and variable-data work, broadly irrespective of format.
Digital newspaper printing is still an emerging, dynamic technology and the proposition gets better daily as production speeds rise and per-copy costs fall.
Competition for the broader digital print marketplace has brought major equipment vendors – HP, Kodak, Océ, Screen and most-recently Xerox are in the inkjet web space – and a superfast Australian-developed printhead technology, Memjet is being talked of as ‘disruptive’ and a game-changer.
But right now, regional publishers have been shy of putting so much as a toe in the water. The danger for them – as PANPA chief executive Mark Hollands warned at last year’s forum – is that others will steal a march on them.
And that sound and substantial print publishing businesses wither because opportunities are missed and facilities not tailored to current needs.
• (s*)it happens – Ask (Australian Opposition leader) Tony Abbott.
• The OECD report, ‘The evolution of news and the internet’ was published in June 2010.