A Bird's Eye View of the Newspaper Market

Between 2012 and 2020 there is projected to be a 16.2 percent drop in newspaper readership, said Steve Mattingly, senior vice president, Southern Lithoplate. “I have heard as much as a 20 percent drop in this time period.

Here’s why: in the 55 and over cohort, 73 percent read a newspaper; in the 35 and older group, 66 percent do, and among 18-34 year olds, that number drops to 50 percent.

“There are 70 million young adults, still in college—if they don’t improve their readership, the numbers tell me it will drop 15 percent,” said Mattingly. “However, this group are still in college, still building their income, still trying to figure out world out.”

Since there is a direct correlation between income and whether or not you read a newspaper—the higher the income, the more likely that individual will read a newspaper—the possibility is there that as this young adult cohort increases their income, they, too, will pick up a paper to read.

There is also the fact, proven by study after study, that printed newspapers are still the most effective way to market to the American population.

“Advertisers want the printed product, which continues to prove more effective as an advertising vehicle than the online component,” said Greg Norris, Goss International marketing manager. “Online may be cheaper, but it is not always effective. Newspaper publishers want the physical product that they can push to the reader. They don’t want to wait for the reader to come to the website.”

The Internet may be good for delivering breaking news, but print ads are still the breadwinner.

Despite the good news, newspapers’ health remains a concern. “Multiple media channels have fractured readership and there is an increasing competition for eyeballs,” said Bruce Richardson, national sales manager – Web Presses, KBA North America. “Due to slowing circulation, newspapers have had to cut costs through a decrease in its editorial staff and operation positions. Additional challenges include keeping newspaper content relevant with the advent of digital newsfeeds such as Twitter.”

Revenue for today’s newspapers has declined precipitously, to approximately $24 billion down from a high of $65 billion in 2000, On the other hand, circulation revenue, both for weekday and Sunday editions, has remained relatively steady over the past two decades, reported the Pew Research Center. In 2012, circulation revenue increased 4.6 percent for both weekday and Sunday editions.

Fifty years ago, 80 percent of KBA’s press manufacturing was sold to the newspaper industry. Today, that number has been reduced to 15 percent, despite the fact that the press manufacturer commands one of the highest market shares in the industry.

The Business Model Changes

In early 2013, the adage that newspapers had adopted over the past decade, that we will save our way to profitably, ended, said Mattingly. “The industry confidently started to move to ‘we have to create profitably. Just that mindset was a massive shift.”

Added Mattingly, “There’s a wonderful saying: ‘the rate of the leader determines the speed of the pack.’ If our leadership truly embraces that we have to create profitability, we are going to be a healthy segment. No company has ever saved their way to profitably anything. Product creation, talent creation—that’s what I am jazzed about. That’s how the industry starts to turn the corner.”

Southern Lithoplate is steadfast in its commitment to print, and to the newspaper segment, said Mattingly.

On the defensive for years, the newspaper sector is taking steps to reinvent itself, agree industry vendors.

Publishers are going beyond creating niche products; they are creating communities and movements behind the products, said Mattingly. They are creating trending events that have a following, so year after year, the local community looks forward to the event. They are not just a push marketing initiative—once these communities get behind the product, it pulls people in also.

An example is a bridal event. There is a printed product, an integrated online platform, and a social media component. The brides-to-be and their guests tweet or post about the event, keeping the interest level high.

Two trends continue: newspapers taking on printing of neighboring papers, to keep their presses busy, and commercial printers pursuing newspaper printing to fill up their unused press time. There is a significant increase in targeted specialty publications, giving advertisers the opportunity to tailor their message to a specific group, for printed products as well as the online product.

“Consolidation is the overarching trend that is occurring in the newspaper industry,” said Ron Sams, VP corporate accounts and newspaper sales, manroland Sheetfed. “This consolidation trend is driving newspaper publishers to pool their resources and form alliances and that lead to regional printing operations.  These regional printers leverage their printing assets and offer contract printing services for newspaper publishers in their area.”

Vendors Respond with New Offerings

Key to staying healthy, newspapers are looking to keep their operations cost effective.

“We are helping our customers extend the life of their printing assets through upgrades, extensions, and new equipment opportunities as required,” said Sams.  "The consolidation of newspaper operations is driving more printing into remaining/existing regional print sites. These regional printers are utilizing their equipment more and in need of tools to make their assets more flexible and reliable.  We are addressing these opportunities through our press.update brand and printservices product suites."

One part of the press.update family of upgrades and retrofit solutions is 3-Around, a solution for companies that want to continue using existing presses while converting from broadsheet to tabloid. The plate cylinder prints three sheets in a single revolution, rather than two. The sheets are exposed on a continuous printing plate based on the cylinder circumference.

The new format allows up to 50 percent more copies per hour in straight runs, said Sams. In collect production, it gives newspapers a new splash of color. “The 3-Around solution allows newspapers to save on resources such as paper, working hours, and maintenance costs—or even entire printing systems,” notes Sams.

Even as some press vendors, like KBA, TKS, and manroland, expand their portfolio with inkjet offerings for digital newspaper printing, experts say that high-performance offset presses will continue to dominate newspaper production in the next few years.

Christoph Müller, KBA executive vice president for the web press product division, reports that KBA has booked orders for the new modular automated Commander CL with 10 of these presses sold in Europe, the U.S., and China. In the high-end class, the compact KBA Commander CT boasts 27 installations, with a total of 124 printing towers and almost 1,000 printing couples.

In 2013, a Commander CL web press with four reelstands, four four-high towers, and two folders went on stream at the at the Times-Union in Albany, N.Y., allowing the publisher to print three other daily newspapers in its region, color comics, spadia folds for coupons and ads, and color on every page. The Times-Union is now able to accommodate multiple-format products—including sizes ranging from traditional broadsheet to tabloid, gatefold, and variable-sized specialty products. It now prints several specialty publications that they could not print before, thus bringing in additional revenue.

At Goss, we are seeing different press demands than 10 years ago, notes Norris. “Now we are predominantly seeing requests for single-width presses; the standard used to be double-width for metro operations. Even in large-scale operations, we are seeing more demand for flexible single-width presses.”

Newspaper publishers are looking for flexibility, as they consider not only what they are producing today, but what they may be printing five years down the line, especially as they seek out more semi commercial jobs, and targeted products and shorter runs.

Goss’ Magnum Compact press, unveiled in 2013, was developed to answer that need for flexibility. Its first order is expected at the end of the first-quarter 2014.  The press is loaded with automation, such as Autoplate, for a shorter makeready, and to meet current demands for more versioning and shorter print runs. Multi-shaftless press drives are standard, with the result that each cylinder level and inker module is driven totally independently, as is the infeed roller, providing maximum flexibility and control over changeover waste, said Norris.

These technologies make the Magnum Compact well-suited for producing run lengths as low as 500, up to more than 250,000. It eliminates the need for a digital press, said Goss.

Market for new presses is extremely slow in US said Goss. “There is more interest in enhancing or reconfiguring existing press platforms, eliminating inefficiencies of older presses, and upgrading with controls and automation to extend the competitive lifetime of exiting platforms,” said Norris.

“When installing a new control system on an older press, for relatively little investment the newspaper can make good gains in cost reductions, and the ROI has proven to be pretty quick,” adds Norris. A new Goss control system can include a new drive system, web cleaning devices and spraybar upgrades from Baldwin, as well as automated color and cut-off register systems with closed-loop fan-out control.

UV—Still Going Strong

“Our newspaper customers are now seeing their press as a source of income—they don’t want to run it for three or four hours to print their paper and then have it be idle,” noted Elinor Midlik, president, Prime UV. “They are not only printing special editions and inserts, but also all sorts of local brochures or special occasion editions.”

Running UV curing or coating on coldset presses allows newspaper publishers to print on coated or super-calendared substrates for commercial web quality.

“We’ve seen a big upsurge in the market over the last 14 years, not only in the US, but also around the world,” said Midlik. “UV is a modest capital investment compared to a heatset dryer. It’s an easy install, and then the newspaper is in the business of doing commercial work."

Prime UV is not just an advocate of UV, it also helped make the process workable, partnering with ink manufacturers to develop UV ink that could run on both newsprint and coated, so press operators could keep the presses going without having to change inks.

Inkjet—The New Opportunity

Newspaper printers are using digital printing to drive cross media activities that leverage print to support their web-based publications.

At manroland web systems, there are two approaches for ink jet printing being offered.  Option one is what the press manufacturer calls its integrated inkjet system, based on integrating a Kodak Prosper S30 into a NP offset printing press. The press’ vendor is integrating its press systems at German publisher Axel Springer AG with an additional 19 Integrated Inkjet systems—the Kodak Prosper S30 inkjet system. According to manroland, Integrated Inkjet, the application for variable-data printing. 

Imprinting in newspaper production, is on its way to becoming a true broad-based solution. With this latest installation, all of Axel Springer’s newspaper presses will be equipped with the inkjet system.

Option two is the finishing system for standalone ink jet printing that can be integrated with Canon/Océ, HP, or Kodak. The status of newspaper/inkjet printing is developing rapidly, says Sams. “Since drupa 2012, manroland-web has sold over 10 digital finishing systems for applications in newspaper and book printing,” he states. “This technology is allowing newspapers to capture critical customer data and build valuable customer profiles that help them leverage their print brand. “

KBA RotaJET, in combination with web offset presses, are viable for highly localized production scenarios (microzoning) in newspapers as well as the format-variable production of additional print products on diverse substrates for readers and ad customers, said Oliver Baar, KBA project manager for business development digital web presses. “Traditional business models in the newspaper industry can be expanded in this way and the process costs of small runs are significantly reduced. While in the offset sector predominantly newspaper, commercial web and sheetfed offset presses are used to produce newspapers, semi-commercials, books, magazines and commercial products, the KBA RotaJET addresses small print runs in all these market segments and opens up new business opportunities.”

Hawaii Hochi Ltd. is set to install the JETLEADER 1500, a complete system to produce inkjet products inline, from TKS (U.S.A.). Hawaii Hochi publishes newspapers in Honolulu City, including the only Japanese language newspaper in Hawaii, called Hawaii Hochi, as well as an English language newspaper, the Hawaii Herald.

The paper is looking to the JETLEADER 1500 as an economical means of producing its contract printing work, which includes community newspapers, posters, pamphlets, magazines, books. Revenues from commercial jobs are offsetting Hawaii Hochi’s slide in circulation, due to the decline in the number of Hawaiians of Japanese ancestry that can read Japanese.