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We will try to present articles on the Future of Printing.

http://www.mondaynote.com/2009/02/22/the-future-of-print-could-be-digital-presses/

The Future of Print Could be… Digital Presses

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

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