Newspapers Send Out, Take in Work

By: Jim Rosenberg When it works, outsourcing should benefit both parties, allowing each to focus on and invest in what it does best. It can even save one newspaper from making a major capital expenditure, while saving the same sort of investment made by another newspaper.

At upwards of $10 million, the Raleigh, N.C., News & Observer's post-press plant-and-equipment project ? completed two years ago to add "a lot of horsepower to go very late with our classified packaging," according to Operations Vice President Richard Rinehart ? is now at the service of a different revenue stream.

The paper's strong automotive category eventually followed the industry trend. Today, the classifieds have diminished sufficiently to fit into the main run, Rinehart says. But while the N&O can still handle its sister community paper's inserting more efficiently than that smaller paper, external opportunities are about to pick up the slack of the internal efficiencies.

The N&O will handle Sunday inserting for The State in Columbia, S.C., beginning with the Jan. 11 edition, and the Raleigh paper is talking with other, unnamed North and South Carolina papers about doing the same for them, says Rinehart.

At the same time that it takes in others' work, the N&O outsources some of its own: Chicago-based Affinity's offices in Asia make up its display ads, while Penske Logistics in Reading, Pa., trucks its copies to distribution centers and drop-off sites.

Some papers looking at daily inserting and TMC products, says Rinehart, may find efficiencies outsourcing to Raleigh, especially with its inkjet labeling. "For smaller papers," he adds, "it may make sense to take on all of their work."

Now with two 28:1 Harris 1472s, a new, 40:1 Muller Martini SLS3000 for Sunday work (where hopper loaders allow one person to manage two inserts), Burt Technologies scheduling software and a Cannon Equipment cart-loading system, the expansion resulted from the recognition that "inserting was still a huge growth area," Rinehart recalls.

Columbia's 130,000 color comics sections, which serve as insert jackets, and the inserts themselves (25-35 million per month) will be delivered directly to Raleigh from their printers. The State will truck inserted comic sections the 200-plus miles back to Columbia.

For Rinehart's counterpart in Columbia, "it was still a go even with the higher fuel charges" that prevailed when the arrangement was worked out last year. Whereas the State has relied on a pair of outdated Harris 1372s for inserting, Raleigh's new operation is extremely sophisticated and very well managed ? "and somewhat underutilized," says Phil Haggerty, who last May returned to the State as operations chief after spending 15 years in Fort Wayne, Ind.

"They can download our information," Haggerty adds. "It gives us sub-ZIP inserting for advertisers, should they require that."

Haggerty expects to see newspapers execute more such agreements. Echoing many others, Rinehart remarks, "I don't think people are going to be making any capital investments unless they're bringing in new work."

The Frederick (Md.) News-Post is bringing in new work. Like the N&O, it took a major project into production just as the industry's prospects were dimming. In fact, it was an even bigger project ? a new headquarters and production plant. But also like the N&O, it starts the new year with a new newspaper customer, taking on some of the printing of The Examiner's Washington edition. Like the State, the Clarity Media free paper found more capability in its partner than in its own older equipment.

Also this is the year, Montreal-based printer and publisher Transcontinental enters the U.S. newspaper market when it begins printing Hearst's San Francisco Chronicle on huge new heatset-equipped Colorman XXL presses in a new production facility.

But looking across the industry, outsourcing has reached into every department, including ad production, call centers, tech support and back-office operations.

Efforts to outsource ads in the 1990s were local operations, whereas today the work can be accomplished across the country or around the world. Gannett Co. now outsources "a little over 3,000 ads per month" to 2AdPro in India, with the goal of outsourcing all sites' ad production, according to U.S. Community Publishing Production Vice President J. Austin Ryan.

Newsrooms are outsourcing beyond the traditional wire services, syndicates and supplementals, looking, for example, to other publications for business sections. Large Canadian chain Canwest has taken even page layout and copyediting largely out of local hands and centralized the work at The Hamilton Spectator in Ontario.

Photo toning at Gannett and, to a less-centralized extent, the New York Regional Media Group represents a similar in-company outsourcing of what has traditionally been a local operation. The aim was to "consolidate the work and gain economies of scale" while marketing the capabilities to others and saving them money, adds Gannett's Ryan.

Though it won't always necessarily be desirable, Ryan adds, "anything that goes digitally, theoretically, can be done somewhere else."