Tuesday, December 20, 2005
Lavigne Printing in WSJ, SF Chronicle May Outsource Printing
San Fran Chronicle may outsource its printing... this may be a shock to some people, but this trend was started by nondailies years and years ago, and for decades they have been shedding their presses in favor of using other newspapers (dailies tend to have lots of downtime as only 3 to 4 hours a day are used for daily production, and the other times are used for Sunday and weekday special sections for TV, real estate, etc.). Newspapers have often sought this work because it contributes to their fixed cost and have a rather hign margin. Because newspapers were often the only businesses in town, decades and decades ago, with a Linotype and a press, they would also have commercial work for local businesses. Over time, however, the special needs of the newspaper business and commercial printing diverged. Because newspapers were local monopolies and incredibly profitable for a very long time, however, they were unable to keep up with the technological advances in the commercial printing business that were needed to survive in that intensely competitive marketplace. Because of that, many newspapers entered "joint operating agreements" with other newspapers where more than one daily paper would be produced in one plant This worked very well when one was a morning paper and the other was an evening paper. But for the past thirty years or so, virtually all evening papers switched to mornings, or discontinued. Printing of daily newspapers by commercial printers may be one way that the newspaper industry reduces its costs, increases its access to better printing technologies, and more importantly, slowly unwinds its capital investment infrastructure that is becoming less sustainable as information distribution moves strongly from cellulose to electrons. It also may be a way for commercial printers, hungry for volume as they adjust to the new media age, begin to innovatively look elsewhere. This switch is not easy... newspapers require special presses and geographic location is critical from a physical logistics standpoint. But don't be surprised if some newspaper production facilities are spun off and sold to commercial printers. Unions will probably attempt to stall that, much as they did the move from hot type to cold type, but this might be a trend that even they decide cannot be stopped.
Some prognostication about the media markets of 2010
Internet service over electric lines... long rumored and long disparaged and disbelieved... it's almost here
Economist Larry Kudlow comments on how the Fed will change under Bernanke