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Newspapers: Why Outsourcing Print Makes Sense—and Cents

The old European tradition of publishers reproducing their own works never totally migrated to the New World, with the exception of newspapers, of course. In America, there's been mostly a church-and-state-like separation of publishers and printing presses. Even Reuben H. Donnelley, a son of the founder of North America's now largest printing firm, had to break away and eventually form his own directory publishing business in the 1880s. The spin-off may have been a formality because, either way, his father and brother were printing the phone books he published independently.

Fast-forward to 21st century print outsourcing trends: The vast majority of US newspapers always have done their own printing. But modern day publishers increasingly recognize outsourcing's value as a management tool that makes profit sense, according to mega printer Transcontinental, Inc. By "jobbing out" print, newspapers can focus on their core business and still use technology to their advantage—without having the capital-intensive burden of investing in the latest multimillion-dollar printing presses, not to mention associated labor costs.

Among smaller newspaper publishers, outsourcing the print function is nothing new. A number of independent community newspapers have long contracted out their print needs to suppliers such as Montreal-based Transcontinental, which now produces more than 150 daily and weekly newspapers across North America. Family owned Times Publishing Co. moved its Erie Times-News printing operations last August to Eagle Printing Co., two hours away in Butler, PA. "Our major concern [was] the age of our printing and packaging equipment and the millions of dollars it would take to maintain or replace this equipment," said president and publisher Rosanne Cheeseman. Under the ownership of the Wise family, the Eagle Production Center is a nine-year-old facility featuring a Goss Uniliner press line as well as mailroom capability for daily insertion of preprinted packages.

"Although we have printed our own newspaper for nearly 90 years, with today's technologies we have decided to purchase printing and packaging services elsewhere. The world of communication is changing," Cheeseman said, "and more than 50 newspapers across the country have closed printing plants just since the beginning of 2009."

Layoffs are inevitable, of course. Cheeseman said Times Publishing offered separation packages to its 40 or so affected employees. Eastern Connecticut's largest newspaper, The Day, had been printed independently since 1881—until last March, when Day Publishing Co. cut 38 workers due, in part, to moving the printing of its flagship newspaper to the Providence (R.I.) Journal. Most of the layoffs occurred in the printing division, which had 151 employees. (The firm's weekly newspapers still are printed in its New London plant.)

While cost reductions may be top of mind, Transcontinental points out that an outsourcing decision often stems from the need to increase performance levels to the expectations of a rapidly changing marketplace. Outsourcing puts a function in the hands of experts committed to a particular area. The real question: Who can do the job faster and better? Still, with the present down economy, print outsourcing seems to be a global cost-cutting trend.

Several larger North American dailies, too, are taking a hard look at the resource burden of maintaining their own printing plants—an idea some big publishers deemed radical just a few years ago. Most union-related issues have been ironed out, as more newspapers realize the benefits. It has been more than two years since production of Hearst's San Francisco Chronicle went live at Transcontinental Printing's Fremont, CA, plant. Another example is La Presse, a Montreal daily that needed to invest in new equipment to meet long-range objectives and address the demands of advertisers and readers for more color, higher quality, and more targeted distribution. Transcon built a state-of-the-art facility that was up and running within 16 months after the start of construction. La Presse is profiting from the ability to run more inserts and gain more color ad revenue.

In San Francisco, the Chronicle's outsourcing success story has been well documented. It gained the benefits of ultra-modern hybrid heatset/coldset presses, advanced support technologies and highly skilled people through the 338,000-square-foot factory that Transcon constructed specifically for the newspaper in Fremont. A new format with higher quality, four-color printing and more flexibility for inserts are a few of the advantages. "Since Transcontinental of Northern California has begun producing the San Francisco Chronicle, the reproduction quality has been excellent," said publisher Frank Vega. "The clarity and contrast of color photographs and graphics has noticeably improved and has been confirmed by the positive and enthusiastic feedback from readers and advertisers."

(Excerpted from Editor & Publisher.)