Managing Production Expenses in the New Year

My prior feature in E&P presented some dire predictions as to where newspapers might be going and their relevance in the current year. It wasn’t a comfortable article for me to write, but I based my predictions in reality rather than simply an optimistic overview of a dramatic fairy tale recovery.

Although I remain concerned, I’m still hopeful that new ambition will turn things around. We’re a tough group of very smart people. I have always taken the high road; the road of never say die that I’ve been down throughout my career, and face our challenges with a bit more of a positive view, hopefully finding some solutions to the hand we’ve been dealt.

Yes, we are having our issues, but if your business survived 2020, you can tackle just about anything at this point.

I recently picked up a copy of a full-page ad from the News Media Alliance  in my local paper that had some encouraging news. The ad stated that eight in 10 Americans read newspaper digital media each month. Being a “print guy,” this didn’t thrill me very much; still, I’m happy to hear that readers of anything—digital media included—continue to trust in us to deliver the facts and cover local and national news. After burying our heads in the sands of denial when the internet first began to chew away at our revenue, just about every newspaper in the land has now developed an electronic news product, whether it’s a digital replica newspaper or a simple web page. We’ve found new and innovative ways to retain all the ad revenue possible, and I am sure once we come out of the pandemic, we’ll continue to find new revenue opportunities on the digital front.

The Alliance ad went on to say that newspaper digital content is over 50 percent more likely to be retweeted than all other local media, including local television, cable and radio. This statement continues to show the strength of our reporting. Newspapers have some of the strongest and most versatile news gathering teams available. As more media is accused of presenting “fake news,” the fact checkers in our industry continue to keep us true to the cause, presenting factual and relevant information to readers.

At this point in the ad, the Alliance shows its support in getting the word out on print. It states that seven in 10 adults took action after seeing a print newspaper ad in the last 30 days. That statement should stand out not only to you but to advertisers across the country. Simply put, it confirms that newspapers are still relevant. Seventy percent of adults after seeing a newspaper ad this month will take action tied in some manner to that advertisement.

The last statistic is that print and online newspaper media are used by 57 percent of adults weekly for shopping planning and purchase decisions. If you were an advertiser and wanted to get the word out for your business, why on earth would you not want to advertise in your local newspaper?

So, after reading about some good things going on in our industry, we all should go into 2021 with a renewed sense of accomplishment and work even harder to find new and better ways to capitalize on the strength of our industry.

Throughout last year, when it didn’t appear possible, we all tightened our belts once again. In areas we thought we had cut to the bone, we soon found that if we didn’t find more savings, we could all be out of a job. We went back into the necessary process of slicing and dicing, even more than pre-pandemic, and amazingly we found more efficiencies and survived 2020. It wasn’t always pretty, and it certainly wasn’t comfortable, but we did what we had to do to survive.

Pressing Forward

Now, with a new year, we need to continue to search for new ways to save and better ways to maintain profitability. I’ve shared quite a few suggestions on savings in the past; some were received with appreciation and positive feedback from readers, while others let me know it still just wasn’t enough.

In the fourth quarter of 2020, at least one newsprint supplier announced a $40 per metric ton increase implemented over January and February 2021, rolled in at a rate of $20 per metric ton/per month. In an already challenging time, many of us will once again be faced with increased costs to our largest consumable expense. All the more reason we need to continue to bear down on expenses.

I’ve outlined many of the following thoughts before. While they may be nothing new to some of you, they may present some good advice to others. They remain tried and true ways to review processes and hopefully help with reducing expenses.

Take another look at your circulation draws. This is one of the areas that may have more potential savings than you can imagine. Many of us continue to rely on the “insurance policy” of overruns rather than fixing the problem with our draws.

Re-examine your pre-runs. Like many of us do, we’ll run classified or a feature section (an advance run) for our Sunday edition and prepack inserts into it. Circulation directors will tell you how difficult it is to accurately predict the Sunday draw early in the week and so they come in with a high-draw and then production pads it again “just to be safe.” I don’t know what you’ve experienced, but most of the time a good number of prepacked papers never even get sent out into the field.

Reviewing single copy sales. Recently, I have heard of increases in rack sales and single copy in some properties. With the challenges we’re facing, any increase in this area would seem to defy logic. I personally think it makes perfect sense. As prices for subscriptions increase, many readers are becoming more selective. Many of our weekday papers—Monday and Friday in particular—tend to blow out of the driveway in a stiff breeze. Readers tend to go for a more economical approach of buying a single day when the urge hits them. As a result, accurately predicting rack sales has become more difficult than it used to be, and as a result, returns have followed suit. With all that said, it is more important than ever to evaluate each point of sale for single copy and adjust accordingly. With reduced staffing in circulation, I understand this may be easier said than done, but it remains a necessary evil we all should practice on a weekly basis.

Stop padding for runs for “insurance.” This is an area production needs to help in. It’s my experience that circulation does a fairly decent job of predicting draws on a daily basis. The time frame between press run order and actual pressrun is usually just a few hours, so normally circulation provides an accurate number…then production pads it for “safety.” Evaluate your insert/machine waste and improve your practices so that you keep waste to an absolute minimum. On days that you don’t have an insert, communicate with the pressroom to ensure that there is no overrun; obviously, there should be no waste if you’re going straight out the door. If you come up short, re-evaluate your processes and watch carriers for padding their runs. Keep your eyes on the process; a lot of papers grow legs and walk away when you take your eyes off the ball.

Reduce pressroom waste. Old standby processes like having all hands-on deck when the press starts. Focusing when locking up plates to ensure proper position on press, presets on ink and water, etc. can pay huge dividends. As a manager, review your waste percentages daily and monitor trends. Challenges with platemaking processes, fountain solution issues, hitting the web with excess water on start-up, lack of preventive maintenance, too many running web breaks, etc. can be costly. Most press related waste issues can be easily controlled by putting processes in place and continuous monitoring.

Small changes can mean big differences. We all have equipment in our plate operation that allows us to produce an image onto a plate, yet some of our CTP units automatically remove slip-sheets and others do not. Some of us remove slip-sheets the old fashion way (by hand) and others have automated slip-sheet removers to help with the process. Most plate vendors are currently offering or actively advancing to “leafless plates.” Explore this option with your plate vendor. The labor savings can be sizable.

Review TMCs. There are several areas to look at related to total market coverage publications. A couple of key areas to look at are preprints and delivery expense.

Preprints in most TMCs just are not as strong, i.e., frequent as they used to be. If your preprint volume has dwindled, it’s time to reevaluate the profitability of your TMC. In some cases, our TMCs act as a protective device to keep others out of the market. Both aspects should be investigated to make sure your TMC is still in your best interest. If you’re mailing your TMC and your preprints are down, it still may be costing you the same as always but with less advertising revenue. Explore options for mailing with your post office. Options like EDDM (every door direct mail) can save you on postage expense in many cases.

I encourage you to read the February 2020 operations feature published in E&P for several good ideas on what to look for as you evaluate the viability of your TMC.

Labor costs. Outside of consumables, the largest expense to any publication is labor. Most of us have an incredible workforce. Even through this brutal pandemic, production workers continued to show up and proved how essential they are to the overall operation. While many other areas were able to work from the safety of home, operations personnel stood together on the frontline and served readers throughout a time of heightened danger. We owe them all our thanks.

We’ve cut staff, and reduced supervisors, managers and line workers. Many of our comrades have suffered through furloughs, seen salary reductions, and lost their jobs. While all of this may seem unfair, we need to keep our foot firmly on the gas pedal. In these tough times, we’ve seen so many good people step up. Throughout operations, we’ve seen individuals doing the work of two, sometimes three people, and filling in wherever they need to in order to keep production flowing.

In 2021, several states will be increasing their minimum wage. While this increase most certainly puts additional strain on our businesses, let us not forget who got us to where we are in the first place. The frontline workers deserve to earn a livable wage, and it’s our job to figure out how to pay for that fairness through increased efficiencies.

The minimum wage increase will challenge many of us in our mailroom operations. We’re going to need to look for more productivity in our operations. We’re going to have to continue to ask for even more out of our good folks, and carefully, fairly and respectfully weed out anyone who can’t or won’t step up their game.

Our staffs need to be productive and lean so that we can continue to do more with less. Newspapers are no longer for the faint at heart; I’m not sure they ever were but now this applies more than ever. We’re in the fight of our lives, and if it were a battle I didn’t sincerely think we could win, I wouldn’t be writing this feature right now, and I’m sure none of you would be reading it unless you felt the same. Now is the time for us to mentor others, develop strong teams with a common goal, and do all we can to turn things around after a tough year. Challenges come with opportunities; opportunities are driven by challenges.

Jerry Simpkins has more than 30 years of experience in printing and operations in the newspaper industry. Contact him on LinkedIn.com or at simpkins@tds.net.