Thursday, August 31, 2006

 

Printing Shipments Up!, Canada's PDF Newspaper, Valassis Needs Heavier Socks, and Some Ranting

Printing shipments were up in July by $254 million in current dollars, a 3.4% increase compared to July 2005. June shipments were revised up by $81 million. On an inflation-adjusted basis, shipments were about flat with last year. This is the third month in a row where current dollar shipments were above the same months of the prior year. While physical shipments are probably flat, and these are easy comparisons to last year's horrible downturn, the industry may have found a pause in its decline. The media shift is still continuing, but the precipitous decline of last year looks like it is behind us.

The Toronto Star is offering a PDF edition!
Read the story http://www.journalism.co.uk/news/story1992.shtml
Sign up! http://www.thestar.com/static/StarPM/2006_starpm.html

Would Time-Warner sell off Time magazine? This writer speculates that might be what's going on...
http://www.slate.com/id/2148549/

Does Valassis have cold feet, or realize the price they offered for ADVO was too much? Oh, to be a fly on the wall! Or is this an attempt to get a better price? Three stories about it...
http://adage.com/article?article_id=111580
http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyID=2006-08-30T222143Z_01_WEN4746_RTRUKOC_0_US-MEDIA-VALASSIS-ADVO.xml
http://www.dmnews.com/cms/dm-news/direct-mail/38101.preview

Radio Shack should be an example of what not to do when it comes time to letting employees go. Since Agfa announced that 2,000 people would be leaving, not of their accord, and other suppliers will be doing the same, letting people go by e-mail, while cost-effective, is dumb. And what if it is blocked by a spam filter? :)
http://www.breitbart.com/news/2006/08/30/D8JQV30O1.html

For the past few months, whenever I've heard the phrase "fragmentation of media," referring to the splitting or media dollars across more alternatives, I've had the sense that it's just not right. Not that media dollars aren't being split up in different ways: that fact is quite clear. Humpty Dumpty was fragmented when he fell of the wall, in the old fairy tale. A dropped flower pot is certainly fragmented. And just like Humpty could not be put back together, or that flowerpot will always have pieces that no longer fit, the idea of fragmentation is not really right. Fragmentation does not impart the sense that those dollars are being split in the quest for an optimized, and cohesive communications program. In other words, they're not fragmented at all. The word fragment is used to describe the Dead Sea Scrolls... there are pieces missing, and they do their best to piece them together and match them with other texts that were known to exist from the era or translations that have survived through history. The intent of media planners is not to fragment anything, but to have consistent branding, messaging, and audience awareness (and reaction) across media. That is, it's a holistic approach to the process. Fragments can't produce synergy... "fragmentation" is the wrong word. And there's another reason.... fragmentation is what it appears to be from the vantage point of an outsider. Our job as marketers is to see things the way our customers do. To see it otherwise is to ignore the customers problems and goals, and that's exactly where marketers' opportunities are.

Sure, some folks think it's great for government to just give money to companies to have them remain in a certain geographic area. As a former Long Islander (1982-1989) who left because of high taxes (and other things, too), I read this story with interest.
http://www.northender.com/northend_news_details.jsp?id=511
I've always wondered about these kinds of grants loans, and the economics generally play out to show that this kind of activity ends up as a bad deal. Chemco Photoproducts, my employer from 1981 to 1987, got one of these loans, and never did what was intended with it (build a new coating alley: they got spooked by silver prices and overestimated the adoption of direct-to-plate [only by about 15+ years]; they never built the alley and missed the doubling of the graphic arts film market in the 1980s). I have seen other situations where government money never made it to its originally intended purpose, but I need not bore anyone with these instances. But it did make quite an impression on me at the time.
First, this kind of "relief" discriminates against smaller businesses, and especially businesses that have not yet formed. Milton Friedman always reminded us that established business always get attention, especially if it is big, and politicians and business advocates love to have their picture taken at a groundbreaking or other event to commemorate their "wise" transfer of funds. A good example is New York City. Long the haven of small printers, especially around Varick Street, these businesses were pushed out by landlords and others, and they flocked to New Jersey. Today, there is no printing industry of note in Manhattan. But some big printers have gotten incentives to stay, yet thousands of jobs exited with barely a whimper. But saving tens or hundreds of jobs gets attention, even after thousands slowly exited after years of inaction.
When governments have to give away money to keep existing businesses in their current areas, it is a sign that something else is wrong. But most importantly, if a business cannot generate capital to make its own purchases, it should do something different in order to do so. Better to fix the reasons behind the capital shortfall, and that may include moving to a different location where the total costs of business are better. If this is such a good idea, attracting private capital (or even a loan) would have been an affirmation. This kind of discrimination against smaller printers and those media businesses who have to cope with the risks of starting up is counterproductive. Better to reduce the property taxes of homeowners by $7.5 million so that they have the additional capital to invest where and when they choose. Or (gasp) put it toward something that enhances commerce for everyone, regardless of industry.
Let's look at Gov. Pataki's words: "When a company invests here, it contributes to the success of our economy and toward a brighter future for all of New York State." Let's try this: "When we have to bribe companies to stay, it looks like we're doing our job, but we're really overtaxing people and discouraging smaller businesses from staying." And needless to say, there are no guarantees that the equipment or the management of the company will do what they say. Risk should be left for the entrepreneurs and financial intermediaries.

Comments:
Hi Dr Joe:

I am spanish nd blogger too, and I have been reading your interesting blog, there isn´t so many blog talking about printing industrie.

I would like to invite you to my blog, visit, www.blografico.com.

Best regards,
Jorge Estebaranz
 
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