Economics still stymie potential of digital printing

By Charlotte Janischewski
Special to Newspapers & Technology

The printed newspaper — most media experts agree — will be with us for many years to come.

However, it is not clear how it will look in 10 or 20 years’ time. The Internet and mobile-based offerings take serious consideration of the trend towards individualization among the population — surely the newspaper will adapt. In the future, will the general newspaper be replaced by a series of newspapers aimed at target audiences, oriented towards specific areas of interest, age groups or even smaller geographical units? Will free newspapers, e-paper editions and download possibilities further hurt print circulations? Developments such as these could benefit digital printing.

Jean-Luc Renaud, technical director of Republicain Lorrain in Metz, France, checks a copy of a newspaper printed on a Kodak digital press during last year’s IfraExpo.

Where do we stand today?

“At drupa 1995, KBA, together with Scitex, showed an inkjet imprinting unit as a component of a conventional newspaper rotary press. It was thought at that time that digital non-impact printing could someday take over parts of the newspaper as an integral component of newspaper production,” said Ifra Research Director Manfred Werfel.

Clearly, that hasn’t happened. Were the expectations of digital printing too great?

Productivity versus flexibility

Although the digital process has been implemented into the newspaper production environment, it was not specifically developed for newspaper applications and is (still) not optimized for it. In newspaper printing, the top priority was to produce a consistent print product on a mass scale and within the shortest possible time; therefore the focus was put on maximum speed. In contrast, with digital, which has its origins in the office sector, the aim was to produce many different single documents as efficiently as possible. Consequently, there are very different tasks and concepts concerned here. Simply exchanging the processes for these applications inevitably leads to disappointing results on both sides.

Among the most critical issues: speed.

The speed of the digital process has increased dramatically, but it is still much slower than offset printing.

If it is only the web speeds that are compared, offset printing, with about 50 feet per second, is six times faster than the fastest inkjet digital printer (which is why digital/offset combinations are not worthy of consideration at the present time).

On top of this, it should not be forgotten that an offset press prints not just on one web (as a digital press does) and one page on each side of the web (as a digital press does), but in a 4-by-2 configuration, it can print two times four pages, multiplied by the number of webs used.

Another issue: cost.

Cost considerations

Digital printing’s so-called click-charge model drives the cost digital production.

This use-dependent charge (per 1,000 copies) covers the maintenance costs and is, in a manner of speaking, calculated into the selling price of the system.

The click charge is a thorn in the side of the publishers, as it raises the per-item production costs. Fortunately, manufacturers, including Kodak and Oce, have now indicated their openness toward different price models that are appropriate to a commercial utilization of the systems.

Absent the click-charge, production costs now depend on the price of the printers themselves — which can range from $1.7 million for an Oce VarioStream 9230 to more than $5 million for a Kodak Versamark VX5000 — the costs for consumables, especially ink or toner (the latter considerably more expensive); the length of print run/system utilization, and the maintenance contract model.

Under the most favorable conditions, the costs will be about $1.30 per copy. With offset, production costs are estimated at 20 to 25 cents (depending on wage costs).

Today, three main business models are used:

•Decentralized production of small print runs to be able to offer the newspaper the same day — The advantages of so-called distribute and print (first distribute, then print digitally on location) lie in the time saved and economized transport costs, which are felt mostly only with small print runs and long distances.

Digital Newspaper Network, for example, produces 15 titles with thousands of copies each day at seven locations on four continents, according to Oce, which launched DNN in 2001.

SatelliteNewspapers, meantime, plans to use Kodak Versamark systems, among others, to launch its own network.

•Financial and business news as a service for business travelers in airplanes and trains.

•Print-on-demand, where single copies produced on automatic printing systems are distributed at hotels, public areas, or on cruise ships — Hundreds of newspaper titles are offered today worldwide as print-on-demand copies via partner companies, such as NewspaperDirect and SatelliteNewspapers. (Alternatively, there is the possibility to download PDFs from the Internet, an option that is becoming increasingly popular.) Even though many hundreds of thousands of copies are sold monthly worldwide in this way, the bottom line impact at the individual newspaper is almost negligible.

Instead, the main consideration here is customer service and image promotion.

The personal newspaper

Because digital printing is a plateless process, each page can be altered, giving rise to the notion of variable printing.

But how much sense would the individual newspaper make? On the one hand, it would allow a publisher to truly fulfill the personal interests of individual readers, but it would also filter information the reader may not want.

Is that what the newspaper reader really wants: no surprises?

A second aspect concerns costs: Would the reader be willing to pay for this service? Or what would it be worth to the advertiser to be able to address his target audience directly? One-to-one marketing in the newspaper — that would indeed be highly attractive for the advertising industry and lucrative for the publishing house.

Yet the idea is sufficiently appealing to give rise to various concepts, including one called PersonalNews, backed by German software firm Syntops.

According to Gregor Dorsch, Syntops’ director, “PersonalNews enables the customer to compile his own individual newspaper from the pages and sections of international newspaper titles. The product is then digitally printed and delivered to the customer by 7 a.m. on the same day via the regular newspaper delivery channels.”

A pilot test involving about 20 newspapers is scheduled to take place this summer, he said. Among the papers expressing a desire to participate: The Washington Post and Washington Times.

Blending of feeds

Another idea, dubbed Improo, is a “synthesis between the online and offline world,” according to backer Detlef Schoder, a professor at Cologne University.

Improo text will come from a wide range of sources, including newspapers, supplemented by blogs and RSS feeds. The concept will be tested later this year.

Finally, MyObserver, a digitally printed companion to The Charlotte (N.C.) Observer, is currently under development (see sidebar, page 46).

Also of interest is a new service provided by the Swiss Post Office (PostMail division), which now offers newspaper printing and distribution from a single source.

Since September, a part of the circulation of the business title L’Agefi for Tessin has been produced and distributed under the direction of PostMail. Before this development, the paper was not delivered on the day of publication in the respective region, which is thought to have motivated many readers to cancel their subscriptions.

Economic efficiency decides

In June 2005, The New York Times launched a digitally printed edition in London. According to Raymond Pearce, vice president of circulation fulfillment, this step did not represent a major venture from the strategy point of view. “It was simply cheaper and faster to print the small European circulation in London instead of flying the copies over from the United States.”

Financial Times — in addition to Borsen in Denmark, Borsenzeitung and Suddeutsche Zeitung in Germany and Neue Zurcher Zeitung in Switzerland — is one of the pioneers of newspaper digital printing.

In 2002, FT began printing several hundred digital copies for distribution in Johannesburg, South Africa.

However, in 2005, when the circulation rose to 2,500 copies, it went back to offset. “In a manner of speaking, digital printing was a victim of its own success,” said Operations Director Richard Boulton.

The experience in South Africa showed that digital printing is a viable way to enter and develop a market, and then to change to the lower-cost production process after a corresponding level of circulation has been reached.

My Observer: Charlotte’s Web

“Direct marketing on steroids,” is how Peter Vandevanter, former vice president of new ventures for The Charlotte (N.C.) Observer, describes the company’s My Observer personalized newspaper project (Vandevanter recently moved to MediaNews Group in Denver, where he will serve as vice president of targeted products).

The Charlotte Observer’s My Observer digital printing test involves two dozen subscribers who receive personalized editions wrapped around their home-delivered dailies.

Essentially, The Observer is testing the waters for personalized printing, sending the personalized publication to 24 of its subscribers as part of a test. Each day, the subscribers receive a one-page (two-sided) personalized edition that’s wrapped around their home-delivered daily paper. It features topics that they have pre-selected, as well as targeted ads.

Readers visit a Web site to answer a series of questions to determine their areas of interest. For each answer, an RSS feed is assigned, or users can create their own. Once that step is completed, software sends the feeds to a pagination app, where the are paginated and formatted before a PDF is generated.

The subsequent My Observer is then printed on a Xerox 6060 digital printer, and added to the subscriber’s paper.

It is considered a “premium service,” Vandevanter said, but will be free for subscribers. And it should be profitable, he said.

“It costs us about 25 cents to print that glossy page and 25 cents to deliver it, so if we get a dollar for an ad on the front and a dollar for an ad on the back, we’re profitable.”

Still, until The Observer gets at least 1,000 people receiving the specialized paper, advertising will remain on the back burner. “You need enough to make it worth people’s while.”

The goal is to sign up 5 percent of the paper’s circulation, or about 10,000 readers. More than that would create logistical delivery problems.

Ifra correspondents Caryl Holland and Martin and Cecilia Campbell contributed to this article, as did Dean Roper and Valérie Arnould from the newspaper techniques editorial team.

This article was first published in newspaper techniques, the monthly magazine of Ifra. If you have any comments or questions about these articles, please send them to ntreader@ifra.com.

If you’re interested to learn more about the training and consulting services available to newspapers through Ifra’s joint venture with the Newspaper Association of America, please contact Technical Solutions LLC at info@technical-solutions.org.