Supply Chain Changes: New Publishing Paradigm

The transformations in publishing are driving new changes in roles and responsibilities. While many are aware of the technological changes occurring with the introduction and adoption of mobile and tablet publishing, this is only a small part of the changes that lie ahead.

Significant business model changes have already started, driven by technology, resultant workflow changes and expedited by global financial issues. These changes show a move toward expanding the influence of the publication printer's role in the publishing supply chain ecosystem beyond that of being "just a publication printer." Similar to what is happening in the commercial printing space, publication printers are transforming to become publishing support providers.

The changes that are affecting the publication printer are the result of the changes affecting their publisher client base. These changes started with the introduction of the Internet during the 1990s. However, they are further impacted by the introduction of tablet- and mobile-based technology.

In the case of newspapers and magazines, the increase in media channels created significant competition for ad spend, with an edge toward online placement due to the "potential" for greater reach and lower cost of placement. The two recessions occurring in the last 10 years added an additional dynamic, in that overall spend was down across the board. This drove publishers to look for new revenue streams.

Specialty Pubs, Multi-Touch Offerings

As a result of the decline in ad revenues, publishers have been looking for new ways to deliver their content and subscriber base to advertisers and marketers. The creation of targeted, specialty publications has increased, offering a more targeted ad sell to advertisers. Publishers have also started to focus on multi-touch offerings using a combination of print, online and—as of late—tablet distribution. Larger publishers that have other media outlets, like newspapers, TV and radio, are also offering them as a part of their new programs. Additionally, some publishers are now testing the waters with catalog sales in an effort to leverage those relationships. Content monetization is now their main focus.

The publishers' other area of focus is cost reduction. Some of this has already been affected by the dissolution of titles and the reduction of pages. Further reductions occurred through consolidation of production departments, increased automation and overall belt tightening. However, many publishers have also been looking for ways to shed some of their internal systems and processes, and outsource much of the tablet and mobile production.

This has led to new opportunities for print service providers. Publishers are looking for partners to take over many of their production processes. There has been an increase in offshore outsourcing. Labor-intensive, non-creative, lower skilled production tasks can be handled in Asia and, with the help of the Internet and the time difference, without missing a day of production. Still, many of them feel that the more skilled roles need to be handled by local partners that are easier to communicate with and manage.

A New Ecosystem

While each publisher may have different business needs, there are business and process transformations that will occur for all of them to some extent. In the first diagram (on the next page) you can see how these new dynamics are affecting the roles and responsibilities in the publishing supply chain ecosystem. These are the before and after business model views of some of the many publishers and publication printers with whom I have recently spoke. In the before view, these publication printers were able to incrementally excel at their role, but were limited to their growth potential because of the distractions beyond content monetization. It also shows the limited role of the print service provider.

In the second diagram you can see how print service providers are now transforming their roles and businesses by expanding their preferred positions in the publishing supply chain ecosystem. They are doing this by taking on roles from the publisher client that will allow publishers to focus on content creation, aggregation and monetization—their core business.

While incremental efficiency for all of the parties can be achieved through technological development and process improvement, further transformation is primarily available through continued expansion and focus of goals, roles and influence in the publishing supply chain ecosystem. Some of these will even be shared roles, like those in studio/premedia and marketing services provider. This type of role sharing will be facilitated through continued innovation and the tighter integration of business processes.

The book publishing supply chain ecosystem is not immune from these changes either. It is going through its own shifts with the increase of digitally produced on-demand books using business models like that of one of the early entrants, Lightning Source. This new production model was initially driven by online distribution from companies like Amazon and Barnes & Noble, which created an illusion that hid the minimal production times required to print as needed/ordered.

Since much of the book publishers' profits were determined by their ability to manage print runs and inventory, digital book production was viewed as the holy grail by many publishers. These changes affect the print service provider, although it also creates opportunities for those who embrace on-demand digital printing technologies.

Book publishers were somewhat insulated from much of the Internet effect that impacted magazine and newspaper publishers until the introduction of smart phones, mobile and tablet reading devices. However, the introduction and adoption of these new devices and channels has accelerated the shift away from printed book production.

Book publishers are now in a similar place as magazine and newspaper publishers. They are looking for new ways to monetize their content, and partner with production resources that can allow them to increase their focus on that goal.

So, while there are many challenges for print service providers as a result of e-media and financial pressures, there are also many new opportunities for those willing to leverage their relationships with their publishing clients through re-defined roles utilizing existing and new skills. PI

About the Author

David Zwang travels around the globe helping companies increase their productivity, margins and market reach. With more than 40 years of industry experience, he specializes in process analysis and strategic development for firms in the fields of publishing, design, premedia and printing. E-mail him at david@zwang.com.