Printing Investments The Key To Newspaper Survival

Philip M. Stone August 14, 2008

The UK Sunday Times is taking full advantage of owner Rupert Murdoch’s £650 million investment in the world greatest state-of-the-art printing plants for his UK newspapers, and after a redesign its July ABCs showed an 11,000 increase in circulation. Not much you might say for a newspaper with a circulation of 1.15 million circulation, especially given its £3 million new launch marketing campaign, but it came in an environment when all of its competitors saw circulation losses for the month.

Maybe there is something in being able to print color on every page. Readers like it and so do advertisers. Murdoch’s investment did not come free of charge. For three years his four national UK newspapers went through big budget cuts and freezes to help pay for the future, but with the future here this year the early signs are that investing big for the future might just pay off.

And Murdoch is not through with such printing plant investments. In Australia News Limited has announced a A$52 million investment  for a  new state-of-the-art printing plant in Townsville, Australia's largest urban center north of the so-called eastern Sunshine Coast in Queensland. It will not only print the Townsville Bulletin regional newspaper but the regional editions of other papers, too.  

Jason Scott, North Queensland general manager neatly summed it up, “People are still writing epitaphs for newspapers but the reality is that the industry is still building more presses today than it ever has.”

And News Ltd. is not alone in making such investments. Mort Zuckerman announced earlier this year a $100 million investment in new color presses for the New York Daily News.  In Turkey, the Dogan Group in Turkey announced this week a major upgrade investment in its printing facilities. Its printing center currentlyhandles 10 daily titles seven days a week from its 17,000 square meter (183,000 square feet) facility in Istanbul, including Hürriyet, Milliyet, Posta, Radikal, Referans and Fanatik, with a combined daily circulation of 2,250,000 copies.

And why are they doing it? A Dogan spokesman explained that business is so good they need to increase capacity. “We are now at a stage with our daily titles where we need to increase color capacity to fulfill the requirement for editorial and advertising content. Our HT70 presses have proved very reliable and produce excellent color quality. The most logical and cost effective solution for us is to use the existing units from press number 1 and reconfigure them to fit into presses 2 and 3."

To do that Dogan has contracted with Goss International to supply new four unit-mounted turner bars, shaftless upgrades to the existing lower formers, and outfeed and web tension systems to complement those already in operation. Color registration on existing equipment will be improved.  When completed, both presses will consist of five four-high towers each with six reelstands and the ability to produce up to 48 broadsheet pages with 40 in full color.

Not as good as what Murdoch’s UK plants can do – they can produce broadsheet and tabloid on the same presses, and in all-color – but it is a sign of the times that newspapers are recognizing that a better quality product entices readers and advertisers.

And it seems few days pass without an announcement of a new color installation – Sierra Leone this week with installation of a new color press at the Awoko newspaper in time for its 10th anniversary – or for a new order such as in Bahrain for Al Watan (The Nation) that has commissioned a new single-width Goss Community press for installation at a new state-of-the-art press hall in East Riffa which forms part of a new purpose-built facility.

New presses are a major capital investment and in these days of reduced revenues it’s a tough call for publishers who know they should have a better color product but are reluctant to spend the money, or find it difficult to get the loans necessary. So we are seeing more and more print consolidation – sometimes that means printing at a nearby newspaper owned by the same newspaper chain (McClatchy’s Modesto Bee turning its printing over to McClatchy’s Sacramento Bee) and sometimes it means making a deal with a competitor (The UK’s Daily and Sunday Telegraph titles printing at Murdoch’s new plants).

And of particular note is the announcement by the Washington Times that it will transfer its printing to the presses of the Baltimore Sun. That’s a win-win for everyone except the press people in Washington who will lose their jobs.

For The Times it solves a major problem as explained by general manager Dick Amberg. “There are many advantages of being printed by The Sun. Its big, modern presses allow us to print six sections instead of four, to print many more pages, to have more color, to print more quickly, to do more zoning, and to have better inserting. The economies of scale from printing two metropolitan papers at one plant lowers costs while also providing more advertising opportunities and special section availabilities. More consistent news placement, better deadlines, and increased pages and flexibility will benefit our readers.

“Outsourcing our printing was becoming absolutely necessary. Our current equipment and capabilities had become inadequate for the present and untenable for our planned growth. Our physical space limits our ability to expand our press capacity even if the cost was not prohibitive. Because our presses are old, we would need to spend many millions of dollars over the next few years just to tread water maintaining our current operating capacity.”

And for The Sun the deal is almost like manna from Heaven. Part of the Tribune Group, the newspaper has been busy culling staff, reducing pages and the like. Here is an opportunity to improve the bottom line, not by cutting, but by bringing in new additional revenue.

As we were reminded by the magnificent opening ceremonies at the Olympics (does it really matter if there was some taped fireworks footage, but yes a shame they switched the not-so-pretty little girl singer for a pretty girl lip-synch singer)  China invented paper in Shangsi Province around 49 BC. According to John Lienhard at the University of Houston, “By the 8th century, the Chinese had gone to conventional block printing, and they were using it on a grand scale. They printed whole scrolls. Before AD 1000, Chinese Buddhists printed their complete books of doctrine. That took 130,000 blocks of wood and 12 years to finish.

“Then, in AD 1045, a printer named Pi-Sheng did almost what Gutenberg would do 400 years later. He made separate characters of clay. He embedded the characters, face up, in a shallow tray lined with warm wax. He laid a board across them and pressed it down 'til all the characters were at exactly the same level. When the wax cooled he used his letter tray to print whole pages.”  

It’s Gutenberg, of course, who gets the real credit for inventing the “modern” printing press, and printers ever since have been looking for bigger and better ways of getting their message across. 

Newspapers will continue to prosper for as long as there are entrepreneurs like Murdoch willing to invest hundreds of millions of pounds, dollars or whatever in what he calls his “Cathedrals of Technology”;  and for as long as there are people like Managing Editor Kelvin Xander Lewis in Africa who scrambled to get the necessary loan and then overcame horrific logistics, but who finally could come close to tears this week as a bishop consecrated what he had thought could only be a dream -- his new color printing press for his Awoko newspaper in Sierra Leone.

Print isn’t dead, but it does need investment to stay alive.