Before we “stop the presses”, and acknowledge the extinction of newspapers, as many pundits suggests, let’s take another look at the future of printing. In my view, within four years, newspaper production will become radically different from today’s process. We’ll enter an era of small print runs, highly decentralized printing units and above all, customized papers.
Today, newspaper production uses a vertical model, one in which productivity is the main metric. Printing presses are measured by the size of newsprint rolls and by the number of copies they deliver. Numbers are staggering: the last generation of presses run up to 70,000 copies per hour.
The vertical model led to audacious ventures. In the early 90’s, within the perimeter of the Roissy Charles-de-Gaulle airport near Paris, le Figaro built a mammoth printing facility supposed to roll the newspaper’s entire run (500.000 copies at the time). Papers were loaded on Air France flights dispatched all over the country, thanks to a ten-year agreement with the airline, which was happy to use its short-range aircrafts at nighttime. Not exactly carbon-friendly by today’s standards. And not an outstanding industrial achievement either. Just to get an idea: Le Figaro’s Roissy printing plant capacity is about 200,000 tons of printed material per year but, today, it only produces 30,000 tons. That’s a 15% load ratio. Strangely enough, Le Figaro is not through with printing cathedrals. Next summer, it will roll out its brand new facility, a €60m plant (co-owned with an Italian partner) with two lines of ultra-modern presses. Still, the only metric is the output capacity.
Now let’s turn to a different scenario, one based on printing industry’s latest breakthrough. More importantly, let’s use the logistical framework of newspaper production to evaluate this new model. Take a mid-size city, say 100,000 residents. Assign it a ratio of 240 newspapers copies sold per 1,000 inhabitants. (For the same ratio, Japan and Norway stand between 580 and 620, UK and Germany around 300, US at 212 and France at 153). This translates into a market of 24,000 copies for our hypothetical city. We’ll assume this market is covered by six major dailies, including two locals, two national and two business papers. Today, these papers are printed at regional plants, shipped by truck to distribution hubs, reloaded in small trucks for newsstands or handed over to a home delivery company. A complex logistical chain with many intermediaries, handlers, etc. Inefficient. In addition, an average of 20% to 30% of the output is left unsold and has to be re-handled and re-processed.
Jumping to 2013. (For the sake of the demonstration, we’ll forget readership erosion, advertising depletion and the newspaper industry other woes). Instead of the big regional facility 60 km away, the city now houses two printing facilities, each one built around two digital presses of a size that fits into a small warehouse. The brands no longer belong to traditional German heavy industry names such as Heidelberg or ManRoland. Tags on the new presses now bear names such as Xerox, Agfa, Kodak, Océ, Nipson, Hewlett-Packard, or Screen USA (see this article on the Newspapers & Tech Digital Printing Forum. Right now, these manufacturers are locked into a fierce fight to capture the market of short-run digital presses aimed at the newspaper industry. To get an idea, just browse the site of Drupa the biggest trade fair in the printing world.
Coming back to our dream city. Each night, at around 22:00, the small printing units switch into newspaper mode. Step one: they receive the PDF files for the newspapers. Not one PDF for each title, but hundreds them if not thousands. Because the next generation of newspapers made possible by these digital presses are heavily customized, almost down the individual subscriber level. For example: the local paper inserts news and ads pertaining not only to the city, but to the neighborhood or street block. Individual subscriptions are tailored as well: different ads are served for a family with three young kids versus for a couple of retirees. And if the business daily includes medical practices among its subscribers it will serve them pricey related ads.
Step two: the print run begins. The machine prints indifferently, seamlessly and continuously, 24 copies of the local paper, 16 of the business one, 37 of the national one, etc, back-to-back, depending on the requirement for each stack of papers for newsstands or home delivery carriers. Titles have different number of pages but all use the same paper size. Each group of customers has it own newspaper data files, even if there is only few dozens of them.
At the end of the production chain, stacks of papers (containing not only one title but all six of them), tagged with each point of distribution, are made available in the order they will be distributed whether it is for newsstands or offices buildings. The home delivery company gets its copies individually identified for each subscriber and sorted according to distribution paths with, again, two households in a same apartment building getting a slightly different paper according to their socio-demographics group. That night, printing plants #1 and #2 produced each 12,000 copies in less than 3 hours. This is feasible today: a Kodak Versamark VT 3000 inkjet press does produce 2040 large pages per minute, that is about 3,000 copies of a 40-pages — customized – newspaper per hour.
Remember, these presses are not presses in the sense there are no physical “plates”, these are now abstract bit maps coming from the computer driving the printing engine. In other words, the “same” page, local news, health topics and its individualized ads, can change for each individual copy of the paper.
Now, the cost question. Today, with a large offset printing plant, the production cost is about €0.15 per copy, newsprint (paper) not included. Expect twice this amount for digital printing — now. But prices will drop, fast. Even with the price difference, consider the following:
- No waste of paper in the printing process (versus for at least 10% now); like a copy machine, what you put in the tray is what you get out (in our new scenario, it’s rolls of newsprint, one meter wide)
- Optimized logistics in distribution; reduction in transportation, handling; quantities can be adjusted on a short notice.
- Instead of running 6 hours a day like today, digital presses can do many other printing jobs, from leaflets, periodicals, municipal bulletins, etc.
On the revenue side, targeted advertising, geographically and demographically increases its value. From the usual “shot in the dark” seen as the major drawback of the print press, newspapers can now offer much better performances in terms yields and measurability. Think of the granularity and relevance of Google ads brought to print.
There are many hurdles in the shift from traditional to digital presses. Technology is not the biggest of one: improvements and prices evolve at the computer industry’s pace, fast. The biggest problem lies in the investment strategies of media groups. Many of them still own massive printing white elephant on a 15-20 years amortization schedule, one unlikely to accelerate given the sick state of the industry. Such heavy fixed assets won’t help the transition, even if the balance-sheet model is contract-based with machines owned by third parties — themselves tied to manufacturers for leasing and maintenance. Not the kind of structure that can be updated overnight. —FF
Related columns:
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- Throwing a lifeline to an endangered species, print? TweetCEO Eric Schmidt spoke in San Francisco, at an event hosted in San Francisco by Syracuse University’s Newhouse School of Public Communications. There, he addressed the collapse of advertising revenue in print media: “It’s a huge moral imperative to help here”. Schmidt didn’t provide any detail on how the search company could throw a lifeline [...]...
- The economics of moving from print to online:
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- Newspaper’s future: shrink to grow TweetOr, is it “shrink to survive” ? Last week in Beverly Hills, California, this was the speakers’ motto at the 78th Word Congress of the International Newspaper Marketing Association. This just in: the “N” of INMA is about to refer to “Newsmedia”. This is supposed to make it less of dinosaur. Well, let’s stop crying [...]...
21 Comments
Great Article. A newspaper group in India already uses similar digital printing machines, not necessarily the same machine though, to print district-focused local editions.
We have been doing a series, “Online Journalism Handbook” and in the series, we have put forward a list of 14 news business models up at Bighow. Hope it is a useful list for your readers.
http://bighow.com/poll/Which-among-these-is-the-best-news-business-model-
An interesting proposition, but one that ignores a pertinent fact: many people under the age of 30 no longer read their newspaper on paper! I would much rather pay a monthly subscription fee for that very same customizable content delivered directly to my wireless device at 04:00. The news will be more up to date, more convenient for me to process, and can still contain advertisements. Plus, I can subscribe to some information from the national paper, some of the business paper and some of the local paper.
Enfin! Finally!
In the late 1990′s, Wifag, the Swiss press manufacturer tried its best to induced the US newspaper industry in adopting the European approach to newspaper manufacturing: multiple edition presses.Because like it or not a newspaper is a manufactured product. In the old continent, it is not rare to have newspapers with multiple editions, I’m more familiar with the French model, but it is also the case in Switzerland and Germany. I have more often than not linked this to Ouest-France, with its more than 500 full time journalist and editors and more than 2,000 correspondant, producing 40 different editions nightly, a total of over 800 pages! For those who understand French, the newspaper has one the best explanation on how a newspaper is done:
http://www.ouestfrance-visite.com/scripts/consult/ecran1/VISecran1.asp
Why this model never caught in the USA is simple: in a lot of major market the metro daily newspaper also owns the suburbans, so they sell two copies daily! Sometime they also print the News-York Times, or the Wall Street Journal or USA Today. When they have “local” editions, the news is tailored to fit the demographics rather than the news. And North-American newspapers are not as modular in their advertising as the European’s, the news hole is rather flexible shape wise, not the case in Europe and impossible with 40 localised editions. So why rock the boat?
Still the only viable model is not the one proposed by Frédéric Filloux in the next 5 year time frame, what he is looking at is a personalized newspaper, more like 2025. But the zipcode model, at around 500 to 1,250 copies make sense in the smaller market. Not in the 100,000 and more market where 20,000 copies or more are needed to pay the bill but in the 25,000 and less, where rather than having a ratio of 240:1,000 you can easily reach 400:1,000. A lot of those are not owned by corporate giants, this is where the ownership is family owned. And this where the Offset revolution started in the mid-sixties. While the major and medium metro had huge iron press to protect (and union jobs that comes with them), the smaller newspapers embraced the small offset press, they embraced photolitho, they had the first computerized photo typesetters. Why? Cheaper and better product.
They cannot even afford to look at the press described in the article, most are in the millions to a couple of millions range. Cannot change the business model of Kodak, HP and Screen in a day.
But there is hope:
http://silverbrookresearch.com/l-en/technology.html
(Gassé should report on this, he’s the technology expert and VC guy)
Let’s imagine a 4 web press, (printing 32 pages of tab or berliner) in full 4/4 colors, at a slow speed of a 1,000 copies per hour. At a price point of $250,000 US. It would take 2 to 3 hours to print 2,500 copies per press (the reason why the Versamatic and other cost so much is the RIP needed to do individual copies, plus the usual markup on a technology where the main market was up to last September printing financial documents and personalized mailing… When was the last time you got one of those in the mail?) But if you are in our 500 copies to 1,200 copies schema then the rip issue fades away rapidly. So our 10,000 copies daily would need 3 to four of these presses (handled by ONE as in 1 technician) while a smaller daily or weekly would need one. Let’s not even talk about the space , the makeready and waste issues.
This is the future of the newspaper. A manufactured product producing a paper based information vector, easy to use, natural interface responding to the need of those who wants to read a tactile product.
The rest is something else, newspapers started most of the radio stations in America, most got out in the seventies as they did of television. The future, I may be wrong, belongs to those who stay focused. Podcast is usually bad radio, vidcast in the smaller market looks like reject from YouTube. There is a future for web based news, it’s a different one from radio, tv and newspapers.
But the economical model of the web, based on “lifting” news from the newspaper may be living it’s last moment.
By the way, when Leroy Robinson founded the Stanstead Journal, where I’m publisher (publisher, writer, photog and sometime delivery man), he also was “lifting” news, 164 years later we are producing news.
When the Amazon Kindle falls in price to $100 and becomes available in countries other than the US, all this discussion about hypermodern printing presses will be moot.
Amazon also has precise demographic data for the benefit of advertisers (home addresses and a good idea of the person’s interests from their Amazon purchases), as well as ultra-convenient instant delivery without the hassle of entering passwords, and billing is already set up. Newspapers will rush to Kindle, possibly even subsidizing the cost in the same way that wireless carriers do for iPhones, when they realize that it offers them the viable online revenue model that has so far eluded them.
Yes, I am predicting that people who read newspapers online will pay a modest subscription fee to read them on Kindle, something they would never do on a website. Newspapers have to hang in and survive a few more years for this to happen.
Add on to my comment from Newspaper and Technology:
No plans yet to print IBD
on HP digital press, O’Neil says
O’Neil Data Systems LLC said it currently has no plans to print Investor’s Business Daily on the Hewlett Packard Inkjet Web Press it installed in December.
Instead, IBD sister company O’Neil is currently using the press — capable of printing broadsheet newspapers — to produce personalized marketing and financial statements.
“As of this date, O’Neil has no intentions of running IBD on this press,” a spokeswoman for IBD told Newspapers & Technology.
HP’s Inkjet Web Press, first trotted out at drupa last year (see Newspapers & Technology, July 2008), was designed with the newspaper market in mind, according to Aurelio Maruggi, vice president and general manager of inkjet high-speed production solutions for HP. The press features a scalable web width of up to 30 inches for production of full-broadsheet newspaper formats or multiple-up documents. It carries a price tag of $2.5 million and boasts speeds of up to 400 feet per minute at 600-by-600 dpi.
“O’Neil Data Systems’ installation of the HP Inkjet Web Press is an important first step in the commercialization of a breakthrough printing platform based on a proven and stable technology, designed to offer significant value in terms of print quality, productivity and cost,” Maruggi told N&T. “HP inkjet high-speed production solutions is working closely with O’Neil to help the company establish productive, profitable printing operations on a wide range of applications.”
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So you’ve printed it digitally at a book margin on one of those massive French presses….but you’ve got to deliver it yesterday at no charge.
Logistics is a prime key to profit.
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