1992 printing and distribution trends

Folio: The Magazine for Magazine Management, May 1, 1992 by Jean Marie Angelo

Assertive publishers cut new deals with printers and paper suppliers.

In this time of marginal ad sales and rising postal rates, publishers can use any type of break they can get. Luckily for them, 1992 is the year of reduced printing and paper expenses, according to Folio:'s latest survey of consumer and trade production executives.

Of the production execs surveyed who had printing contracts up for renewal in 1991 or in the early part of 1992, more than half say their printers either cut their prices or maintained current rates. Another 30 percent of those who did not face contract renewals nevertheless attempted to renegotiate printing costs; most were successful in doing so.

The statistics beg the question: If so many of those who have bothered to renegotiate have been successful, why aren't more publishers doing it? Indeed, about 70 percent who did not have contracts up for renewal apparently did not approach their printers, according to our exclusive survey.

This isolated fact can distort the total picture, explains Steve Frye, a consultant on production issues. "Printers are scared to have their clients out looking for bids," he explains. Some suppliers are approaching clients well in advance of expiration dates to offer cuts that take effect six to nine months before a contract is even up for renewal.

All printers are feeling the pressure to keep their presses rolling. Because of computerized technology and the advent of the mini-web press, larger printers, who once shunned runs of 500,000 or less, can now take smaller runs. These firms are either adding equipment to handle the spate of smaller circulation, special-interest, niche and trade titles, or are buying divisions that already serve these clients.

The fierce competition for customers has left printers most eager to be good business partners. In addition to offering price breaks, most are learning they must also design competitive distribution plans to help publishers save on postage.

"Any production person is getting two or three calls a day from printers trying to sell something. The more capacity printers have, the more their salespeople are out drumming up new business," says Michael Arpino, director of production for Cahners' consumer entertainment division, New York City.

How much a publisher can save on printing costs obviously depends on page volume and how well he or she can negotiate. During this year of idling presses, some publishers have seen reductions of 10 percent or higher, says Frye.

Southam Business Communications, Inc., USA, Indianapolis, publisher of trucking magazines, convinced its printer to reduce an annual 5 percent price increase to only 3 percent. The trade publisher did agree to pay more for some of the pre-press services, however, but still walked away with "sizable savings" on the printing bill for all of its titles, says Dallas Nauert, director of production and printing.

Cost-cutting on the home front

Don't forget to get your own house in order, intones Jerry D'Elia, vice president of printing and transportation for Hearst Magazines Division, New York City. Before approaching a vendor for savings, publishers should examine what they can do to create saving without jeopardizing readership or ad sales. Hearst has adjusted four-color use, tints and paper grades. "Does the reader really see these things?" he asks rhetorically. D'Elia likens the production standard to an octane rating.

"If my consumer is content with an 89 rating, why pump 91 into the product?" he asks. For Hearst, dropping the octane level translated into eliminating cover coatings on Country Living, House Beautiful and at times on Good Housekeeping.

D'Elia is not alone. This year's Folio: survey finds almost 50 percent of publishers using a cover coating, with the most popular being the UV-cured coating; last year's survey showed that 62 percent were using some type of coating.

Paper also came under scrutiny this year. At The Taunton Press in Newtown, Connecticut, unit costs were kept even with last year by reducing trim sizes on Fine Gardening and Threads and switching from 55-lb. to 50-lb. text stock, notes Kathy Davis, director of manufacturing.

But, while 1992 is the year to renegotiate with suppliers, it apparently isn't a time for publishers to embrace innovation. Less than 20 percent of the magazine publishers surveyed are using selective binding to tailor advertising and editorial for their readers.

"Printers have spent millions adding this technology, believing magazines would use it," observes Russ Shores, a consultant to both printers and publishers. The industry has watched Time, U.S. News & World Report and now Newsweek indicate that they are moving in this direction, but what is holding up the majority of publishers? Lack of sophisticated databases, says Shores.

"Publishers have to know who their subscribers are, how much they make and what they do for a living," he says. "Most can't tell you." For selective binding to take off, publishers will have to see the value in doing more than collecting a subscription payment or asking for minimal information on a response card. They must go after demographic data.